The Prime Minister and Treasurer must come clean today on why they spent the best part of two years trying to stop the release of a Treasury document which directly contradicts their repeated claims that Labor’s reforms to negative gearing and the capital gains tax discount would be a “sledgehammer” to the housing market, would “block innovation and entrepreneurship” and see the economy “come to a shuddering halt”.
The Australian Information Commissioner has forced the release of a Treasury document which exposes – and directly refutes – Malcolm Turnbull, Scott Morrison’s and the Liberal Party’s overblown attack on Labor’s housing affordability policies as little more than outright lies.
The Treasury analysis says about the impacts of the policies on residential investment properties that:
“In the long term, increases in taxation on rental property could have a relatively modest downward impact on property prices. …
“Owner occupiers who are unaffected by the changes are likely to limit the extent to which there is an impact on prices.”
And while price impacts would be small, as Labor has long argued, there would be a shift in the housing market between property investors and first home buyers/owner occupiers:
“Overall, price changes are likely to be small, though the composition of ownership may shift away from domestic investors.”
The Treasury analysis was produced in early 2016, just after the release of Labor’s policy reforms to negative gearing and the capital gains tax discount.
The document also confirms distributional modelling of Labor’s policies stating that over 50 per cent of the benefits of negative gearing go to the top 20 per cent of incomes, while the top 10 per cent of incomes receiving nearly 75 per cent of the benefit of the capital gains tax discount.
Despite this clear advice about the moderate and positive impacts of Labor’s housing affordability policies, the likes of Malcolm Turnbull, Scott Morrison and Peter Dutton still chose to dial up the political rhetoric in a poor attempt at a scare campaign.
“What Labor is proposing is a huge reckless shock to the market. This is not fine-tuning. This is a big sledgehammer they are taking to the property market.”
TURNBULL, DOORSTOP, 24 APRIL 2016
“I think the economy will come to a shuddering halt and I think the stock market will crash.”
DUTTON, INTERVIEW WITH JOHN LAWS 2SM, 9 MARCH 2016
So not only do we know through multiple reports and earlier Freedom of Information requests that the Turnbull Cabinet was actively considering their own changes to curb the “excesses” of negative gearing, but it has been making public attacks on Labor’s policy it knows from its own Treasury advice are untrue.
Scott Morrison loves to selectively leak Treasury advice when it suits him and yet this critical advice was withheld for almost two years. Mr Morrison has serious questions to answer on this matter.
Labor is the only major party with a set of housing affordability policies which will help level the playing field between first home buyers and property investors.