Federal election 2019: states demand GST compo over Labor’s tax, negative gearing plan
State treasurers warn Bill Shorten’s negative gearing and tax changes will put a dent in GST revenues.
Liberal state treasurers have demanded Bill Shorten provide compensation for any loss of GST revenue as a result of his negative gearing and capital gains tax overhaul, arguing they stand to lose up to $1.4bn a year.
The letter — signed by NSW Treasurer Dominic Perrottet, Tasmanian Treasurer Peter Gutwein and South Australian Treasurer Rob Lucas — warns that Mr Shorten’s tax policies will have “significant implications for our constituents and also our local economies.”
The treasurers push the Opposition Leader to set-out the “economic and fiscal impact” on their states of his proposed negative gearing and capital gains tax overhaul, warning the shake-up will undermine living standards and reduce property values.
“We are concerned that these changes have the potential to further slow the housing
market, which will have significant implications for our constituents and also our local economies,” the letter says.
“The RBA has observed that the substantial softening of the housing market appears to have already had a negative economic effect on consumer spending, hampering economic growth and reducing revenue forecasts at the state and federal levels.”
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The three treasurers say that Mr Shorten’s housing policies will directly affect home owners and construction workers “while also giving rise to broader negative economic consequences that threaten to undermine the jobs and living standards of all Australians.”
“We are aware that your policies are likely to place further downward pressure on property values,” the letter says.
“As you would be aware a number of research houses have modelled a range of outcomes that would have significant negative consequences for the States and Territories.”
“We write to seek your urgent advice on the impact of your policies on home values, rents, the construction industry, the economy, wages and jobs.”
The letter, sent today, also seeks an assurance from Mr Shorten that he “give a firm commitment to compensate our states for any loss of GST revenue as a result of your tax policies”.
“Independent analysis of Labor’s changes to capital gains tax policy by the Centre for International Economics estimate that states will lose over $1.4 billion a year — over $1 billion a year in state revenue and over $400 million a year in lost GST revenue,” the letter says.
“Further analysis by SQM forecast Labor’s change to negative gearing policy as resulting in a $2.3 billion fall in stamp-duty in one year alone.”
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