Bill Shorten has predicted Labor’s $35 billion negative gearing reforms will have “no appreciable impact on house prices” despite marketing the policy as a measure to improve affordability.
In an interview with ABC’s 7.30, he also flagged the goal of extending tax cuts to more workers earning over $130,000 in the future, if he is elected, but offered no firm timeframe or quantum.
As the Labor leader attempts to navigate the downturn in the housing market since the negative gearing policy was announced, Mr Shorten insisted that it would not prompt further falls in house prices.
ABC broadcaster Leigh Sales asked Mr Shorten on Wednesday night: “Will your negative gearing policy make houses cheaper?”
“It won’t have an appreciable impact on the price of housing,” Mr Shorten replied.
“What we’ve wanted to do is create a level playing field, first of all.
“Why should a pair of first-home buyers, supported by their parents, they could be in their late 20s, early 30s … they’re bidding against someone in the crowd who is getting a taxpayer subsidy in the form of negative gearing. It’s not fair.
“The other thing is this. This nation can’t keep giving away money to property investors to make losses on property. We are grandfathering it, though. No one will be affected who is currently invested under these laws.”
Treasurer Josh Frydenberg seized on the remarks, telling The New Daily it was another example of Labor’s “shiftiness”.
“Bill Shorten’s remarks on 7.30 are yet another example of him changing his tune,” Mr Frydenberg said.
“This goes against everything Labor has said in the past about their plans to abolish negative gearing as we know it and increase capital gains tax by 50 per cent, with Chris Bowen saying it was ‘a policy designed to put downward pressure on prices’, Bill Shorten himself saying it would ‘help reduce’ prices and of course Wayne Swan saying it was ‘economically disastrous to do anything on negative gearing’.
“This shiftiness on tax is a pattern of behaviour from Bill Shorten, after he forgot about his $34 billion of new super taxes, misled a worker on Labor’s plan for higher income taxes and substantial portions of Labor’s housing tax policy went missing from their website.”
"When you get an income tax credit, when you haven't paid income tax – you're already on the public purse." @BillShortenMP defends @AustralianLabor's #frankingcredits policy. #abc730 #auspol #Ausvotes2019 pic.twitter.com/aVeouEzKQ3
— abc730 (@abc730) May 1, 2019
Asked whether the policy could see house prices go down, Mr Shorten said that had already occurred under the Morrison government.
“Well, that’s all happened under the current government. That’s at the heart of this election. This government loves to talk about a strong economy, but strong for who?” Mr Shorten said.
“Corporate profits are up 39 per cent, but wages are only up 5 per cent. First-home buyers find it hard to get in the market, but if you’re a property investor buying your sixth or seventh property, this government gives you a subsidy. Is that really fair?”
- Read more about Day 21 on the campaign diary
As the ACTU leader Sally McManus also raises concerns that the Morrison government is keeping its workplace relations policy under wraps, Mr Shorten said wage growth was a real concern.
“Wages are stagnating, cost of living is going up. What we have is capital in this country is taxed very lightly. Income is taxed very heavily. It’s not fair on our young people and not fair on our pensioners. It’s not fair on people on fixed incomes,” he said.
Asked where Labor would draw the line on income tax – given the effective top marginal tax rate will be close to 50 per cent – Mr Shorten said tax cuts for high-income earners too would need to be considered down the track.
“You know there’s no plans for 60 per cent – or indeed 50 per cent. But I agree that what we need to do is eventually lighten the burden of income tax across all the levels,” he said.
Meanwhile, some viewers were questioning whether the ABC’s promotional video for the segment, and interviews which followed, were actually satire.
— Ryan Sheales (@RyanSheales) May 1, 2019
My satire detector is off because apparently this isn’t satire https://t.co/Ow2ckAlOUJ
— Alison Croggon (@alisoncroggon) May 1, 2019
What is Labor’s plan for housing affordability?
Labor said it has a comprehensive plan to improve housing affordability and support housing construction. A Shorten Labor government will:
- Limit negative gearing to new housing from January 1, 2020. All investments made before this date will not be affected by the changes and will be fully grandfathered
- Halve the capital-gains tax discount for all assets purchased after January 1, 2020. This will reduce the capital-gains tax discount from assets held longer than 12 months from 50 per cent to 25 per cent. All investments made before January 1, 2020, will be fully grandfathered
- Put negative gearing to work by limiting it to new investment properties to help boost housing supply and jobs.