Jim Chalmers addresses concerns over negative gearing changes

Treasurer Jim Chalmers has again been grilled about who initiated the request for advice about changing negative gearing rules.

Treasurer Jim Chalmers has been grilled again about who made the request for advice on policy ideas about changing negative gearing.

While speaking in Beijing on Friday, Mr Chalmers reiterated the stance that the Labor party was not seeking to change the rules regarding negative gearing.

“It is not unusual at all for governments or for treasurers to get advice on contentious issues which are in the public domain,” he said.

“It is not unusual for treasurers to do that, but we have made it very clear through the course of this week that we have a broad and ambitious housing policy already, and those changes aren’t part of it.”

Treasurer Jim Chalmers has admitted he asked the Treasury to look into negative gearing. Picture: NewsWire/Tertius Pickard

Earlier this week when asked if he had directed his officials to produce the advice, Mr Chalmers said public servants routinely “look at all kinds of policy options all of the time”.

“Our housing policy … is to build more homes for Australians,” he said.

‘NO PLANS’: ALBO IN FIERY INTERVIEW ON NEGATIVE GEARING

Anthony Albanese insists the government has no plans to change negative gearing amid speculation the government was looking into changing the tax breaks.

After refusing to rule out a revamp of negative gearing and capital gains tax exemptions on Wednesday, Mr Albanese was again pressed about the issue on Thursday morning.

“We have no plans to change or touch negative gearing,” Mr Albanese told Sky News’ First Edition.

Program host Peter Stefanovic raised changes to stage three tax cuts as a previous example of the government walking back on a promise.

“You’ve said this before and then changed course, might you do it again?” Stefanovic asked.

Mr Albanese shot back: “No Pete, what we did with our income tax changes was deliver a tax cut for every Australian.”

Stefanovic replied: “Yeah, but you lied doing that, you lied, you were deceptive doing that.”

previous analysis showed changes to negative gearing “won’t assist housing supply and that’s the problem here”.

“Guess what Pete, if I did then so did Peter Dutton because they (the Coalition) voted for it,” Mr Albanese said.

After being accused of possibly “lying again” on negative gearing, the prime minister said: “No and I don’t accept the premise of your question Peter.

He continued: “What happened, very clearly, was that there was a massive change in circumstances.

“We had a cost-of-living crisis – which hopefully you’ve noticed – and we needed to deal with that by putting that downward pressure on inflation.”

Stefanovic then brought the conversation back to the “current issue” of negative gearing.

“It’s not a current issue,” Mr Albanese shot back.

Stefanovic replied: “Well it certainly is.”

After Mr Albanese reiterated his claim negative gearing was “not a current issue”, Stefanovic replied that the topic was on the “front page of every paper at the moment”.

“That doesn’t mean it’s real,” the prime minister said.

After some back and forth the prime minister shut down the subject.

“I have said why we have a problem with changing (negative gearing),” Mr Albanese said.

“It’s about supply and all of the analysis shows that a change to negative gearing will not assist supply and my government is focused on more supply of housing.”

LABOR MPS DIVIDED OVER NEGATIVE GEARING

Anthony Albanese’s refusal to rule out future changes to negative gearing has exposed Labor to damaging voter backlash, as the Coalition warns tax changes would “smash” the housing market.

The prospect of resurrecting the same housing tax policies that doomed Labor at two elections — including the “unlosable” 2019 campaign — has divided government MPs, with some privately raring for a “bold” policy fight, while others fear it would lead to electoral defeat.

The Prime Minister was evasive when repeatedly grilled about whether he was considering changes to negative gearing on Wednesday, saying it was “not our policy” and that he had “no plans” to do so.

The Coalition seized on Mr Albanese technically leaving the door open to future reforms, claiming Labor was poised to hurt renters, buyers and mum-and-dad investors.

The Greens rushed to claim credit for Labor’s apparent willingness to consider negative gearing and capital gains changes, two demands the minor party has used to hold the government’s signature Help to Buy and Build to Rent policies hostage in the Senate.

Opposition leader Peter Dutton says negative gearing changes would “smash” the housing market. Picture: NewsWire/Gaye Gerard

Opposition leader Peter Dutton claimed the Greens were “driving Labor’s economic policy agenda” and said changing the tax concessions would “further smash the housing market”.

“Rents will go through the roof if the government starts playing with negative gearing,” he said.

“If you’ve bought a house in the last couple of years and have a big mortgage, the last thing you want is Mr Albanese changing the tax settings — something he promised he would not do”.

The negative gearing debate, which was sparked by reports Labor had tasked treasury officials with providing advice on possible reforms, derailed the government’s plans to highlight new figures released Wednesday showing headline inflation dropped to 2.7 per cent in the year to August.

“The real story today is inflation,” Treasurer Jim Chalmers said.

Asked if he had directed his officials to produce the advice, Mr Chalmers said public servants routinely “look at all kinds of policy options all of the time”.

“Our housing policy … is to build more homes for Australians,” he said.

Prime Minister Anthony Albanese says he did not personally direct treasury officials to look at negative gearing. Picture: NewsWire/Martin Ollman

Later in the day Mr Albanese gave a definitive “no” when asked again if he or Mr Chalmers had directed treasury.

Pushed to answer if the public service did it themselves, the PM said: “I assume so”.

More than 90 per cent of the 4000 News Corp readers responding to an online poll on Wednesday said they were against the Albanese Government making any changes to negative gearing.

Backbench Labor MPs are split over fighting the next federal election, due by May 2025, on negative gearing, though all agreed the priority should be getting existing housing policies through the Senate.

Labor MP Josh Burns says he wants the Greens to back Labor’s existing housing policies. Picture: NewsWire/Martin Ollman

Macnamara MP Josh Burns, who is facing a challenge from the Greens in his inner Melbourne seat, said he was “open to solutions if it helps my community”.

“We will always look for ways to make this easier and better,” he said.

“There’s policies on the table right now that will help thousands of renters, and help people enter the housing market.”

McEwan MP Rob Mitchell said any change would be “met with the usual smear and fear campaign by the opposition”.

“But a good government should look at all options that help address big issues for our nation,” he said.

Labor MP Rob Mitchell says housing concerns have been brewing since 2017. Picture: Liam Beatty

Labor MP Susan Templeman says she has already experienced two elections fought on negative gearing. Picture: NewsWire/Damian Shaw

“I am one of those people who are twice bitten three times shy of a policy that has some people thinking is the Holy Grail, others think will do absolutely nothing,” she said.

One MP said voters wanted Labor to be “bold” if it made it fairer to buy a house, while another said there was no appetite for change in the suburbs where aspirational Australians wanted housing investment opportunities to remain.

Those open to negative gearing changes broadly agreed the policy would have to increase housing supply, be grandfathered and put limits on the number or types of properties.

Analysis of 2021-22 Australian Taxation Office data based on the 2022 electorate boundaries shows key marginal Labor seats like Chisholm and Aston in Victoria, Ryan and Moreton in Queensland, Boothby in South Australia, and Bennelong and Reid in NSW have some of the highest number of voters with a negatively geared property.

Redbridge pollster Kos Samaras says Labor will be criticised if it puts too many guardrails on negative gearing changes, but can’t risk angering the tens of thousands of voters with investment properties. Picture: NewsWire/Aaron Francis

More than 950,000 individuals negatively gear at least one house, meaning the property is rented at a loss they then claim as an income tax break.

Redbridge pollster Kos Samaras warned there was mostly all downside for Labor if it pursued negative gearing reforms, as to avoid extreme voter backlash the government would have to make so many carve outs the policy would end up criticised as a mere “band aid” fix for the housing crisis.

“There’s a view among Australians that we need to do something with regards to the way we treat policies as investments,” Mr Samaras said.

“But it’s like the egg is already scrambled, there’s just too many Australians that are actually in this space as investors and will push back against reforms.”

Originally published as Jim Chalmers addresses concerns over negative gearing changes