This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/australia-news/2016/may/23/labors-negative-gearing-policy-would-push-up-rents-leaked-modelling-shows
The article has changed 9 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Labor's negative gearing policy would push up rents, leaked modelling shows | Labor's negative gearing policy would push up rents, leaked modelling shows |
| (35 minutes later) | |
| Another private economic consultancy is planning to release modelling of Labor’s negative gearing policies, warning the ALP’s proposals will “create market chaos” and be “difficult to police.” | Another private economic consultancy is planning to release modelling of Labor’s negative gearing policies, warning the ALP’s proposals will “create market chaos” and be “difficult to police.” |
| A leaked copy of the modelling – which is still in initial draft form – shows Labor’s plan to limit negative gearing to new properties and cut the capital gains discount from 50% to 25% could see established house prices fall by 3% to 4%. | A leaked copy of the modelling – which is still in initial draft form – shows Labor’s plan to limit negative gearing to new properties and cut the capital gains discount from 50% to 25% could see established house prices fall by 3% to 4%. |
| It also criticises recent modelling by the Grattan Institute, saying the institute has sought to “ostracise” high-income individuals by using tax office data to show that high-income earners are direct beneficiaries of the capital gains tax (CGT) discount. | It also criticises recent modelling by the Grattan Institute, saying the institute has sought to “ostracise” high-income individuals by using tax office data to show that high-income earners are direct beneficiaries of the capital gains tax (CGT) discount. |
| Related: Today's campaign: Turnbull slumps in polls as Labor maintains strong start | Related: Today's campaign: Turnbull slumps in polls as Labor maintains strong start |
| It says the Grattan Institute’s modelling should have analysed the housing benefits of the CGT and negative gearing to low-income renters, rather than focusing on the tax benefits alone. | It says the Grattan Institute’s modelling should have analysed the housing benefits of the CGT and negative gearing to low-income renters, rather than focusing on the tax benefits alone. |
| “[Their] findings that most of the tax benefit [of CGT] accrued to high-income individuals was to be expected because of their wealth and access to capital,” the modelling says. “The broader spectrum of lower-income individuals negatively gearing and utilising the CGT discount was the real news.” | “[Their] findings that most of the tax benefit [of CGT] accrued to high-income individuals was to be expected because of their wealth and access to capital,” the modelling says. “The broader spectrum of lower-income individuals negatively gearing and utilising the CGT discount was the real news.” |
| The modelling has been produced by the consultancy firm MacroPlanDimasi. | The modelling has been produced by the consultancy firm MacroPlanDimasi. |
| It was prepared by Brian Haratsis, MacroPlanDimasi’s executive chairman and a member of the Property Council of Australia. An initial draft, dated April 16, is titled “Short Memory”, but it suggests an alternative title could be “Shortened Memory.” | |
| When contacted on Monday, Haratsis told Guardian Australia it was not commissioned by any politician or political party, or any private individual. | When contacted on Monday, Haratsis told Guardian Australia it was not commissioned by any politician or political party, or any private individual. |
| He said he has been modelling Labor’s policies, as well as recent work by the Grattan Institute and the Australian Council of Social Service because he wanted to know what effect they would have on low-income renters. | He said he has been modelling Labor’s policies, as well as recent work by the Grattan Institute and the Australian Council of Social Service because he wanted to know what effect they would have on low-income renters. |
| “I tried to pull together all of the policies that are out there at the moment and put them together in the context of the Henry tax review,” he said. | “I tried to pull together all of the policies that are out there at the moment and put them together in the context of the Henry tax review,” he said. |
| “The Henry review said you shouldn’t touch capital gains tax unless you’ve fixed the broader policy context, which is stamp duty and capital gains tax, at the same time. The Reserve Bank says the same thing. | “The Henry review said you shouldn’t touch capital gains tax unless you’ve fixed the broader policy context, which is stamp duty and capital gains tax, at the same time. The Reserve Bank says the same thing. |
| Related: Campaign catchup: flagging polls and frayed ministers | Related: Campaign catchup: flagging polls and frayed ministers |
| “I’ve been trying to look at the effects [of Labor’s policies] on low-income rental displacement, which is probably the biggest issue ... because no one’s tackled that.” | “I’ve been trying to look at the effects [of Labor’s policies] on low-income rental displacement, which is probably the biggest issue ... because no one’s tackled that.” |
| The modelling – which Haratsis says is not complete – shows Labor’s policies will generate no net revenue for the government because they will cost $3.3bn to administer each year but only raise $3.2bn in revenue. | The modelling – which Haratsis says is not complete – shows Labor’s policies will generate no net revenue for the government because they will cost $3.3bn to administer each year but only raise $3.2bn in revenue. |
| It also shows Labor’s policies will cost Australia’s renters $1.7bn a year in extra rental costs. | It also shows Labor’s policies will cost Australia’s renters $1.7bn a year in extra rental costs. |
| It then predicts three dramatic impacts on the economy. | It then predicts three dramatic impacts on the economy. |
| Firstly, it says Labor’s policies will reduce the number of negative gearing landlords by 1m over the next decade, with direct consequences for 45% of the country’s 2.25m renting households. This will increase rents by 8.8% for these negatively geared dwellings, it says. | Firstly, it says Labor’s policies will reduce the number of negative gearing landlords by 1m over the next decade, with direct consequences for 45% of the country’s 2.25m renting households. This will increase rents by 8.8% for these negatively geared dwellings, it says. |
| Secondly, they will remove 205,000 dwellings from the rental housing supply stock, requiring an immediate increase in social housing to replace the fall in low-income rental stock. | Secondly, they will remove 205,000 dwellings from the rental housing supply stock, requiring an immediate increase in social housing to replace the fall in low-income rental stock. |
| Thirdly, they will create a “resale price cliff” for apartments that have been purchased off the plan. It says this “price cliff” will be driven by the inability of first home owners to resell their properties to a negative gearing landlord. | Thirdly, they will create a “resale price cliff” for apartments that have been purchased off the plan. It says this “price cliff” will be driven by the inability of first home owners to resell their properties to a negative gearing landlord. |
| It also warns Labor’s policies will force low-income rental households out of established areas with jobs, facilities and public transport into “outer fringe areas” in new dwellings with no jobs, public transport or facilities. | It also warns Labor’s policies will force low-income rental households out of established areas with jobs, facilities and public transport into “outer fringe areas” in new dwellings with no jobs, public transport or facilities. |
| Related: NBN raids: how independent are the federal police? – Behind the Lines podcast with Kristina Keneally | Related: NBN raids: how independent are the federal police? – Behind the Lines podcast with Kristina Keneally |
| It says the policies will also lead to “increased levels of social dysfunction on the urban fringe” as well as an “increased carbon footprint” for low-income renters as affordable private rental stock in established areas shifts to the urban fringe. | It says the policies will also lead to “increased levels of social dysfunction on the urban fringe” as well as an “increased carbon footprint” for low-income renters as affordable private rental stock in established areas shifts to the urban fringe. |
| The draft modelling has emerged as the treasurer, Scott Morrison, has sought to reframe the debate on negative gearing in the third week of the election campaign. | The draft modelling has emerged as the treasurer, Scott Morrison, has sought to reframe the debate on negative gearing in the third week of the election campaign. |
| On Monday he released an analysis of Tax Office data – produced by the tax policy unit in his office – showing Labor’s negative gearing policies will actually hurt low and middle-income households more than high-income households, contrary to Labor’s claims. | On Monday he released an analysis of Tax Office data – produced by the tax policy unit in his office – showing Labor’s negative gearing policies will actually hurt low and middle-income households more than high-income households, contrary to Labor’s claims. |
| The focus on the “unfairness” of Labor’s policy is very different from the government’s focus of previous weeks. | The focus on the “unfairness” of Labor’s policy is very different from the government’s focus of previous weeks. |
| Until now, Morrison and Turnbull have emphasising how Labor’s policies will lead to property price crashes and soaring rents. | Until now, Morrison and Turnbull have emphasising how Labor’s policies will lead to property price crashes and soaring rents. |
| This modelling comes two months after BIS Shrapnel released modelling showing plans to restrict negative gearing to new homes would see rents jump by up to 10% in capital cities, and property prices fall 6% within 10 years. | This modelling comes two months after BIS Shrapnel released modelling showing plans to restrict negative gearing to new homes would see rents jump by up to 10% in capital cities, and property prices fall 6% within 10 years. |
| Morrison seized on the BIS modelling at the time, describing it as “an indictment on Labor’s policy”. | Morrison seized on the BIS modelling at the time, describing it as “an indictment on Labor’s policy”. |
| “What it shows is [that] they just haven’t done their homework on this,” Morrison said. | “What it shows is [that] they just haven’t done their homework on this,” Morrison said. |
| He later came under fire after BIS Shrapnel clarified that its modelling was prepared before Labor’s policy was announced. | He later came under fire after BIS Shrapnel clarified that its modelling was prepared before Labor’s policy was announced. |