Government under pressure to consider negative gearing changes

LIBERAL backbenchers have indicated support for Labor’s plan to wind back negative gearing, in an effort to make property prices cheaper.

Anthony Albanese has criticised the government over its refusal to consider winding back negative gearing Picture: Today/Channel 9

LABOR MP Anthony Albanese has railed against Coalition members who are refusing to consider changes to negative gearing, saying their refusal to adjust the tax concessions for property owners is pricing young Australians out of the market.

Treasurer Scott Morrison is facing dissent within the Liberal Party over the issue, with vocal backbench MPs calling for the government to consider winding back negative gearing ahead of the May budget.

In a heated discussion on Nine’s Today, Mr Albanese suggested the government’s tough policy was contributing to the housing affordability crisis rather than addressing it.

“The government itself this time last year was speaking about getting rid of the excesses of negative gearing. They know that they’re there, they know that young people are going to an auction and competing with investors for the same house that is pricing them out of the market,” he said.

“We run a risk in this city of Sydney and other cities of simply saying to the younger generation ‘you will never own your own home’.”

The crisis over the cost of housing has prompted some Liberal backbenchers to push for a change of Government policy. #9Today pic.twitter.com/eLgERMAYf7

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Mr Albanese suggested the government had prioritised politics over policy, saying it had only ruled out reining in the generous tax concessions because Labor had advocated for it.

“The government knew that last year, and they’ve got this rhetoric simply because Labor came up with the solution. It’s about time they put politics aside and came up with finding a solution, and part of that has to be the tax regime,” he said.

In response, assistant treasurer Kelly O’Dwyer said Labor’s proposal to “smash negative gearing” was “the worst thing that could be done”.

“The worst thing that could be done is Labor’s proposal to smash negative gearing, to take people out of the market who currently use negative gearing. I’m talking about teachers, policemen, emergency services, defence personnel, all who utilise negative gearing in order to be able to purchase a property,” she said.

The government is facing pressure from its backbench to reconsider its tough stance on the controversial tax concessions.

Assistant treasurer Kelly O’Dwyer says getting rid of negative gearing is the ‘worst thing that could be done’.

Sydney MP John Alexander told The Australian there needed to be a debate on negative gearing and other strategies, and suggested the controversial tax concession could be reined in.

He criticised the government’s refusal to consider changes.

“I think this is where politics has got in the way of developing better policy; because Labor said ‘we are going to get rid of it’, we said ‘we are not going to touch it’,” he said.

“That was pre-election and we have now passed the election, we have had the hearing completed into housing affordability and the findings have been tabled. We are looking at the situation and we should now be free to make the best policy based on the facts that we have discovered.”

A number of other government backbenchers spoke out against Mr Morrison and Prime Minister Malcolm Turnbull’s refusal to consider changes.

West Australian MP Andrew Hastie suggested tax deductions on mortgage repayments should be available to “everyday Australians” rather than only investors.