New economic modelling showed Labor’s negative gearing policy would have shrunk the economy by $1.5 billion while a survey of marginal seat voters found itwas a key reason for its defeat at the federal election.
The Property Council commissioned Deloitte Access Economics to undertake a comprehensive analysis of the impact of the ALP’s negative gearing and capital gains tax policy and test it against key assumptions about the impact on new housing construction, housing affordability, and rents.
Separately, the Property Council also commissioned a survey of 1600 voters across 16 marginal electorates to understand the impact of the ALP’s policy on the election outcome.
Property Council Chief Executive Ken Morrison said the post-election survey and results of economic modelling provided a clear verdict on Labor’s negative gearing and capital gains tax policy.
“Together these studies conclusively show this was the wrong policy, at the wrong time, and the voters knew it,” Mr Morrison said
“The Deloitte study shows that Labor’s policy would not have achieved the key objectives Labor set out for it.
“It would have delivered a $766 million hit to construction, cost 7,800 construction jobs, made almost no difference to housing affordability by 2030, and shaved $1.5 billion off GDP at a time we can least afford it,” Mr Morrison said
A survey of 1600 voters in 16 marginal seats in in NSW, Victoria, Queensland, WA and Tasmania suggests this policy was also a key factor in Labor’s electoral loss.
Almost two-thirds of non-Labor voters in these marginal seats said Labor’s plan to restrict negative gearing and increase capital gains tax was among several reasons why they didn’t vote for Labor. For 34 per cent of non-Labor voters, it was ‘very important’ reason why they didn’t vote for Labor.
Among non-Labor voters, 6 per cent of those surveyed said they would have voted for Labor, while a further 22 per cent said they would have considered voting for Labor, if they weren’t proposing changes to property tax laws. (All of the 16 marginal seats surveyed now sit with a margin of less than 6 per cent.)
When asked whether Labor should retain this policy, 62 per cent of those surveyed thought Labor should get rid of its negative gearing and capital gains tax policy.
68 per cent of previous Labor voters also agreed that the policy should be dropped.
55 per cent of those surveyed thought that governments should encourage people to save for their future by investing in property, and 44 per cent wanted to own an investment property in the future.
Voters aged between 18-39 were among the strongest supporters of property investment, with 59 per cent agreeing government should encourage people to save for their future, and 65 per cent of this group interested in owning an investment property in future.
A summary of the outcomes of the Deloitte Access Economics analysis and the separate survey of marginal seat voters are attached .