The treasurer has brushed off suggestions the government may scrap the controversial negative gearing scheme after proving willing to break its promise not to touch tax cuts due to take effect in July.
Key points:
- Jim Chalmers says the government is not considering changes to negative gearing
- Labor took a policy to wind back negative gearing to the 2019 election
- A housing coalition says the government could fund half a million affordable homes by scrapping tax concessions for property investors
The federal government last week announced it would attempt to amend the stage 3 tax cuts to provide larger tax cuts to lower and middle-income earners by halving the benefit the nation’s highest earners were due to receive.
The decision broke a promise made before the federal election not to touch the tax cuts — an issue the government was challenged on near-weekly in press conferences and meetings with business, union and community groups.
Having proven willing to take the political risk of breaking that promise, the government has now faced questions on whether it will move against other policies deeply loathed within some corners of Labor, but which the party committed to keeping at the federal election.
Former Labor leader Bill Shorten campaigned and lost on a promise to significantly wind back negative gearing at the 2019 election, after which Labor formally dumped its plan to limit the tax concession to new properties.
Fielding questions from the press gallery this morning, Treasurer Jim Chalmers repeated a line used many times to suggest the stage 3 tax cuts would not be changed: “That’s not something we have considered or are considering.”
Mr Chalmers said the government had explained its decision to amend the legislated tax cuts after reviewing them over the summer and determining there was a clear and affordable pathway to provide more cost of living relief to more Australians by changing the stage 3 cuts.
“The history is relatively well established,” Mr Chalmers said.
“When these were first proposed to the parliament we tried to alter them.
“We didn’t want to vote against the whole package in the final vote because we didn’t want people on low and middle incomes to miss out.
“When we came to office we ran a ruler over the whole budget … but what we were talking about then, we weren’t considering then the sorts of changes we announced last week.”
But on housing policy, the government had come up with alternatives to try to address the crisis, including tax breaks on build-to-rent developments.
Housing coalition Everybody’s Home said last week the government could fund half a million affordable homes by scrapping tax concessions for property investors, including negative gearing.
The group estimated the government would forego $86.3 billion in tax revenue over the coming decade from negative gearing deductions.
Mr Chalmers said the government would continue to consider further relief to people as it approached the May federal budget.