‘We have to do more’: Ministers hope negative gearing debate will win over young voters

Reforms to negative gearing and capital gains tax concessions could help persuade voters the Albanese government is serious about tackling Australia’s housing crisis, according to senior Labor MPs.

Prime Minister Anthony Albanese repeatedly insisted on Thursday the government had “no plans” to alter the pair of tax concessions and warned doing so could slow the supply of new houses into the market, but he repeatedly refused to rule out a change in the future.

“At war”: Peter Dutton says Anthony Albanese and Jim Chalmers are at odds over Labor’s thoughts on negative gearing.Credit: Marija Ercegovac

Opposition Leader Peter Dutton claimed Albanese and his treasurer, Jim Chalmers, were at war after Albanese distanced himself from revelations in this masthead that Treasury had been asked to model the impact of the tax changes. Dutton vowed to oppose any changes.

Greens housing spokesman Max Chandler-Mather MP said Labor had opened the door to changes after years of pressure and that his party was willing to negotiate in good faith, realising “we won’t get everything we want”.

A pair of Labor ministers, who asked not to be named so they could detail internal discussions, backed the case to examine changes to negative gearing or capital gains tax because it would send a signal to younger voters that Labor was taking the housing crisis seriously and tackling responsible economic reform, though some MPs remain nervous given the party took a similar policy to the 2016 and 2019 elections and narrowly lost both.

“Albo hasn’t buckled in the first 24 hours which is a good sign,” one minister said, noting the prime minister had not yet categorically ruled out changes to the tax rule.

That minister confirmed changes to capital gains tax were also being examined, that Treasury was looking at capping the number of investment properties that could be negatively geared and that the focus would be on sending a signal to voters, rather than on raising tax revenue.

A second minister said Labor had done a lot of good work on housing policy but “it’s not enough”.

“We have to do more so we are looking at options. Housing is such a pivotal issue in people’s lives, we have to go bigger but the question is how,” they said.

The 2023 Intergenerational Report showed that between 1976 and 2021, the rate of home ownership among younger Australians has plunged dramatically. Among 25- to 29-year-olds, it has fallen from about 55 per cent to about 35 per cent, while for 30- to 34-year-olds it has fallen from nearly 70 per cent to 50 per cent.

According to the Tax Office, about 1.1 million people had a negatively geared property in 2020-21 which provided a tax benefit of $2.7 billion to those taxpayers.

Albanese played down the call from eight Labor MPs in this masthead for the government to consider a fresh approach to tackle the housing crisis and reiterated his focus was on bolstering supply and pointed out some Liberal MPs had called for the same thing.

“Our plans are out there about supply and my concern with the proposals that have been put forward from time to time about negative gearing is that they won’t have a positive impact on supply, we need more homes,” he told Nine’s Today show on Thursday.

He refused to say if his government was poised to break a promise, given the similarities with the government’s insistence to alter the stage three tax cuts until it changed course at the start of 2024.

“See if you can find someone who says that what we did on income tax was the wrong thing,” he said.

“I know there was some controversy when we did it, but it was the right thing, done for the right reasons and that might be a courageous decision.”

Dutton branded any change to the tax concessions “just a new tax” and promised “we will take a very strong stance against any changes to negative gearing because it will disrupt the housing market, it’ll drive up rents”.

He claimed there was a growing divide between the treasurer and the prime minister “and those two seem to be at war with each other”.

Chandler-Mather said the Greens’ ideal outcome was for a policy shift in the remaining months of the current parliament “to give hope to the millions of renters and prospective home buyers who, up until now, have thought they could never own a home”.

However, he acknowledged this was a more likely prospect after the next federal election if the Greens secured a share of the balance of power in a hung parliament, while flagging the Queensland election next month could significantly increase the Greens’ presence because of federal inaction.

“The Queensland election could be a powerful warning to Labor about the consequences of ignoring the material concerns of millions of renters,” he said.

with Hamish Hastie

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.