It is no secret that a rump of Labor MPs and senior Treasury officials are champions of overhauling housing tax breaks.
Jim Chalmers, who was Bill Shorten’s finance spokesman when Labor devised its unpopular 2019 election policies targeting negative gearing and the capital gains tax discount, is under constant pressure from Treasury boffins to raise revenue by clamping down on tax breaks.
Facing pressure from social services groups, the Greens and Labor backbenchers last year, Chalmers “sought a view” from Treasury on the impacts of changes to negative gearing.
Despite claims by Anthony Albanese in the second election debate on Wednesday night that Treasury modelling “certainly wasn’t commissioned by us”, Chalmers did formally request the analysis from his department.
The Prime Minister and Treasurer are splitting hairs to suggest the government didn’t commission the Treasury analysis or that the advice was not modelling.
With the Shorten disaster imprinted in his mind, Albanese has told his Treasurer that changes to negative gearing and CGT are off the table … for now.
If the Albanese government wins the May 3 election, as the polls suggest, there is every chance Labor could circle back to considering a shake-up of housing tax breaks over a three-year term.
Before the 2022 election, Albanese said he wouldn’t touch Scott Morrison’s stage three tax cuts. As support for Labor plunged following the doomed October 2023 Indigenous voice referendum, Chalmers convinced Albanese to change his mind.
Albanese and Chalmers, who promised before the last election they wouldn’t change the tax treatment of superannuation, also announced a doubling of the tax rate on super accounts valued over $3m. The super tax hit remains a Labor priority after the government failed to push it through the 47th parliament.
The Greens party, which Labor relies on to pass legislation in the Senate, last week warned Albanese that negative gearing and CGT tax breaks must be axed in return for their support in a hung parliament.
Adam Bandt’s ransom note was an ambit claim because he has already ruled out ever supporting Peter Dutton and the Coalition. Albanese, who has fought the Greens for decades in his inner-Sydney seat of Grayndler, called Bandt’s bluff on Thursday.
“I rule out negotiating with the Greens. I’m not negotiating with the Greens,” Albanese said.
The statement plays to Albanese’s hopes of forming a majority government and claiming a mandate. But the reality is, not only will Labor rely on Greens’ preferences to win the election, a second-term Albanese government will need to negotiate with the Greens to pass legislation in the Upper House.
Dutton, who has fallen further behind in the polls, has jumped all over the negative gearing stoush. He linked Albanese’s “lie” to the Labor leader’s bizarre declaration that he didn’t fall off a stage at a union campaign rally in the NSW Hunter region earlier this month.
“Instead of telling fibs and having problems with the truth, be upfront and honest with the Australian people. If you’re going to abolish negative gearing, you’re doing the planning for it now, be upfront with the Australian people before they vote on the 3rd of May,” Dutton said.
To date, Labor’s scare campaign tactics have trounced the Coalition. With just over two weeks of campaigning left and pre-polling centres opening on Tuesday, expect Dutton to ratchet up negative attacks as he scrambles to turn the tables on Albanese.
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