News National Row erupts between parties over BIS Shrapnel
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Row erupts between parties over BIS Shrapnel

Mr Shorten said the report didn't model Labor's policies.
Mr Shorten's
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Opposition Leader Bill Shorten has dismissed a new report on the impact of curbing negative gearing.

The BIS Shrapnel report issued on Thursday found cutting the tax break would drive up rental prices and push down house values.

BIS Shrapnel has refused to say who commissioned the research but said the modelling was done over several months and was not focussed on any particular policy.

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The report examined the effect of limiting negative gearing, assuming that:

• Established homes would be excluded from negative gearing in favour of new homes only;

• The policy would be grandfathered and not effect established homes bought before July 2016.

It found that if these measures were to be put in place, rents would rise by up to 10 per cent a year and new home building would shrink by around 4 per cent – or 7,200 dwellings – annually.

Scott Morrison claims that the vast majority of Australians who use negative gearing earn "modest" incomes.
Scott Morrison claims that the vast majority of Australians who use negative gearing earn “modest” incomes. Photo: AAP

It further stated that GDP would shrink as a result – by around $19 billion per annum on average – and 175,000 fewer jobs would be created over the coming decade.

Last month, Labor announced plans to limit negative gearing to new properties from mid-2017 if it wins the next election.

But Mr Shorten told reporters on Thursday the report was completed before Labor unveiled its policy.

He dismissed it as “a joke”.

“The report was done and researched before Labor released its policies,” he said.

“The report doesn’t model Labor’s policies, it models a set of fantasy assumptions and then draws its own conclusions.”

Shadow Treasurer Chris Bowen also dismissed its findings, saying it “should be treated with all the credibility of an email from Godwin Grech”.

But Treasurer Scott Morrison has leapt on the report as evidence Labor’s policy is flawed.

Mr Morrison told the ABC he did not know who commissioned the report, stating: “We didn’t do this modelling”.

“It is a credible report and it shows what we said what would happen with Labor’s policy,” he said.

“It would have a significant impact on property values, it’s going to push many people into housing stress. It’s going to require compensation of hundreds of millions of dollars, more than is actually raised by the policy itself.”

But Kim Hawtrey from BIS Shrapnel told the ABC the report was done over the last few months, “before Labor even announced its policy”.

“We weren’t thinking of any particular policy from any side of politics,” he said.

“We were really trying to consider as set of likely assumptions that somebody might propose.”

Mr Hawtrey said the paper was not making recommendations.

The Property Council and the Real Estate Institute of Australia have both confirmed that they did not commission the modelling from BIS Shrapnel.

ABC

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