The Greens’ proposal to scrap negative gearing is dangerous and would only worsen housing affordability for ordinary Australians, says Property Council of Australia Chief Executive Ken Morrison.
The Greens initiative seeks to remove negative gearing for new investment properties with the savings of nearly $3 billion over four years going towards housing for the less well-off.
Negative gearing allows investors to claim expenses for rental properties to reduce their overall taxable income and is used by over 1.3 million Australian landlords.
“Removing negative gearing would put the brakes on the supply of new housing and any interruption to supply would only drive prices higher for both renters and home owners,” Mr Morrison said in a statement.
“It would mean less rental accommodation and less newly constructed housing, which our major cities desperately need”.
He said the solution to the problem needed to improve the supply of housing, and reform the most economically harmful taxes like stamp duty and make drastic improvements to planning frameworks.
“If politicians want to solve housing affordability we need to focus on the planning blockages and the housing taxes which make the supply of new housing lower, slower and more expensive than what it should be”.
Figures released by the Parliamentary Budget Office showed the proposed removal of negative gearing could save $2.9bn over the forward estimates and increase revenue by $42.5bn by 2024-25.
However, Mr Morrison said the figures “are based on the abolition of negative gearing across all asset classes – not just residential property”.
"It is simply untrue to say that more than half of people with negatively geared rental housing investments are in the top 10 per cent of taxpayers".
"We would encourage the Greens to take a look at the actual ATO data, which clearly shows that at least two thirds of Australians who declare a net rental loss earn around $80,000 p.a. or less".
“That includes 42,000 nurses, midwives and aged care workers, 62,000 teachers and child carers, 12,300 emergency service workers and 83,000 clerical staff, all earning around or below this amount".
