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You can find the current article at its original source at https://www.theguardian.com/australia-news/2018/jan/08/labor-says-treasury-document-shows-negative-gearing-claims-outright-lies
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Labor says Treasury document shows negative gearing claims ‘outright lies’ | Labor says Treasury document shows negative gearing claims ‘outright lies’ |
(about 3 hours later) | |
Labor has released a Treasury document that states its negative gearing policies could cut house prices in the short term but, over time, the impact will be “relatively modest”. | Labor has released a Treasury document that states its negative gearing policies could cut house prices in the short term but, over time, the impact will be “relatively modest”. |
The opposition has seized on the advice to government, released under freedom of information, as proof the Coalition exaggerated claims that changing the tax treatment of property would be a “sledgehammer” to the economy. | |
Before the 2016 election Labor promised to restrict negative gearing to new homes and reduce the capital gains concessions from 50% to 25%. | Before the 2016 election Labor promised to restrict negative gearing to new homes and reduce the capital gains concessions from 50% to 25%. |
The Treasury analysis from 2016 contains a table showing the expected impact of Labor’s policy on various asset types. It concludes that, for residential investment properties and owner-occupied housing, the policy “could introduce some downward pressure on property prices in the short term”. | The Treasury analysis from 2016 contains a table showing the expected impact of Labor’s policy on various asset types. It concludes that, for residential investment properties and owner-occupied housing, the policy “could introduce some downward pressure on property prices in the short term”. |
“In the long term, increases in taxation on rental property could have a relatively modest downward impact on property prices,” it said. | “In the long term, increases in taxation on rental property could have a relatively modest downward impact on property prices,” it said. |
The document notes that “returns for Australian investors will fall under the policy” but owner-occupiers would be unaffected, limiting the impact on property prices. | The document notes that “returns for Australian investors will fall under the policy” but owner-occupiers would be unaffected, limiting the impact on property prices. |
It said that changes to negative gearing from 1985 to 1987 and the introduction of the CGT discount in 1999 “had little discernible impact on the market”. | It said that changes to negative gearing from 1985 to 1987 and the introduction of the CGT discount in 1999 “had little discernible impact on the market”. |
“Overall, price changes are likely to be small, though the composition of ownership may shift away from domestic investors.” | “Overall, price changes are likely to be small, though the composition of ownership may shift away from domestic investors.” |
The document, which is heavily redacted, states the table was created after a “request for information” and includes talking points to describe the impact of Labor’s policy on a police officer earning $90,000. | |
The document also confirms distributional modelling of Labor’s policies stating that more than 50% of the benefits of negative gearing go to the top 20% of income earners, while the top 10% of income earners receive nearly 75% of the benefit of the capital gains tax discount. | The document also confirms distributional modelling of Labor’s policies stating that more than 50% of the benefits of negative gearing go to the top 20% of income earners, while the top 10% of income earners receive nearly 75% of the benefit of the capital gains tax discount. |
The treasurer, Scott Morrison, responded to Labor’s policies with claims the package would “crash” confidence in the economy, while Malcolm Turnbull said it amounted to taking a “sledgehammer” to the property market. | |
The shadow treasurer, Chris Bowen, said the document, which the Australian information commissioner ordered be released, “directly refutes” the Liberals’ “overblown attack on Labor’s housing affordability policies”. | The shadow treasurer, Chris Bowen, said the document, which the Australian information commissioner ordered be released, “directly refutes” the Liberals’ “overblown attack on Labor’s housing affordability policies”. |
He said it was clear the criticisms were “little more than outright lies”. | He said it was clear the criticisms were “little more than outright lies”. |
“Scott Morrison loves to selectively leak Treasury advice when it suits him and yet this critical advice was withheld for almost two years.” | “Scott Morrison loves to selectively leak Treasury advice when it suits him and yet this critical advice was withheld for almost two years.” |
Bowen noted that cabinet had considered changes to rein in the “excesses” of negative gearing but Turnbull ruled them out after Labor released its policy, a commitment he renewed in 2017. | Bowen noted that cabinet had considered changes to rein in the “excesses” of negative gearing but Turnbull ruled them out after Labor released its policy, a commitment he renewed in 2017. |
“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,” Bowen said. | “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,” Bowen said. |