Frydenberg warns of house price drop under Labor’s negative gearing plan
JOSH Frydenberg insists SA house prices will fall 6 per cent under a Labor plan to tackle negative gearing as the Opposition prepares to take its bold plan to the election.
SOUTH Australia’s median house price could fall 6 per cent if Labor’s bid to change negative gearing proceeds, Treasurer Josh Frydenberg says.
The warning shots that this will be a key Federal Election issue have been fired, with the Treasurer launching a new national offensive on Labor’s contentious policy.
Fresh modelling released by the Government, based on Australian Tax Office statistics, show
Labor-held seats in SA have almost 50,000 of the state’s 90,000 voters who are negative gearing investment properties.
On day two of a national assault on the plan, which saw similar results released along the eastern seaboard, Mr Frydenberg told The Advertiser every one of these South Australians would lose under Labor’s plan.
He said his assertion was backed by economists including RiskWise, who have warned the median house price in SA could fall about six per cent if the changes went through, weakening the housing market.
But Labor’s Treasury spokesman Chris Bowen dismissed the claims, arguing Australians who already had properties negative geared would still be able to do so.
He said a key point continuously overlooked in the Liberals’ campaigning was the fact the changes would not apply to existing investment or new properties.
The changes would aim at “increasing house supply and generating the jobs and construction that goes along with that,” Mr Bowen said.
The war of words is an escalation of the Coalition’s attack on the policy — one of the boldest Labor will take to the poll.
Mr Frydenberg pointed to economic modelling commissioned by Master Builders Australia, which found raising taxes on housing over five years could result in up to 42,000 fewer new dwellings being built, 32,000 less full time jobs and an $11.8 billion drop in building activity across the country.
However, Mr Bowen said many economists and independent commentators argued now was the best time for reform.
He pointed to HSBC chief economist Paul Bloxham, who last month said “investor interest is already cooling” and “if there was a time to make things change, it would be when this activity is already cooling”.
Statistics from the Government show Labor MP Kate Ellis’ electorate of Adelaide has the most taxpayers that negative gear with 9696 followed by Boothby, held by Liberal MP Nicole Flint (9167).
