Chalmers splits hairs on negative gearing to back up Albanese

Opposition Leader Peter Dutton has accused Anthony Albanese of having a secret plan to overhaul negative gearing after the prime minister claimed the government had never commissioned modelling on limiting the property incentive, despite this masthead revealing last year that Treasury had looked into changing it.

As Treasurer Jim Chalmers sought to split linguistic hairs between modelling and advice on the issue, the Greens released independent advice showing real estate tax rules would deliver a $180 billion advantage to property owners over a decade and Dutton went on the offensive to reverse his slide in polls.

Treasurer Jim Chalmers denied any inconsistency between his stance and Anthony Albanese’s on negative gearing.Credit: Alex Ellinghausen

Both parties used their campaign launches at the weekend to spruik policies aimed at addressing the soaring cost of housing, including a plan from the Coalition to make mortgage interest tax-deductible for many first home buyers and a Labor commitment to effectively reduce the deposit for all first-time purchasers to 5 per cent.

Neither touched on changing negative gearing or the concessional rate of capital gains tax, which many experts, including the Reserve Bank, have concluded puts upward pressure on prices.

During Wednesday’s leaders’ debate, Albanese said the government had not commissioned modelling into negative gearing reforms. This masthead revealed in September last year that Treasury had provided advice on the system that enables landlords to offset their taxable income by claiming deductions such as mortgage interest, although the government ruled out implementing any change after days of vague messaging.

On Thursday, both Albanese and Chalmers said they were not implementing negative gearing changes, but Dutton accused the prime minister of misleading the voting public.

Dutton, campaigning in the key marginal NSW seat of Hunter, said Chalmers was at “war” with Albanese while accusing the government of “coming after your rental property”.

“Now they’re coming after your rental property, which is just going to make it impossible to invest in the housing market, which is something the prime minister should be open and honest about instead of being tricky and devious,” he said.

“If they abolish negative gearing, which is their secret plan, if they go to the election without Jim Chalmers or Anthony Albanese telling the truth on their real tax policy, why would Australians trust this prime minister?”

Labor went to the 2016 and 2019 elections with proposed changes to negative gearing and the capital gains tax concession. In 2019, the Coalition linked the tax concessions with other Labor proposals to accuse the then-opposition of attacking mum and dad investors.

Opposition Leader Peter Dutton visited a trade college in the Hunter on Thursday. Credit: James Brickwood

Three years earlier, then-Liberal treasurer Scott Morrison had noted there were problems with the use of negative gearing concessions, but in the face of Labor’s plan, he and the government dropped any suggestion of reform.

Chalmers maintained the government had not commissioned modelling, instead saying his own department had considered issues that were in “the public domain” around September last year.

“I’ve said on a number of occasions now that I sought a view. Now that’s different to commissioning modelling. The prime minister was asked about commissioning modelling. I sought a view,” Chalmers said.

“It is normal practice to seek or receive advice on these issues from time to time. We didn’t commission modelling. The view from the Treasury is that a change to negative gearing wouldn’t get the sort of improvement that we desperately need to see in our economy when it comes to supply.”

Albanese, who campaigned in the Greens-held seat of Brisbane on Thursday, ruled out changes to negative gearing and negotiating with the Greens, who are demanding changes to the tax concession.

“When it comes to negative gearing, we have made it very clear that that’s not something that we are proposing. We have got a housing policy. It’s not in that. We’ve got a tax policy. It’s not in that,” he said.

Greens leader Adam Bandt said it appeared both major parties were opposed to reforming tax concessions that over the next decade would cost $180 billion in forgone revenue.

He released Parliamentary Budget Office analysis that showed that in 2025-26, negative gearing would cost $7.4 billion in revenue, with $4.1 billion of that benefit being accrued by the top 20 per cent of taxpayers.

“With Liberal and Labor making the housing crisis worse, you can’t keep voting for the same two parties and expecting a different result,” he said.

“The Greens are the party of renters and first home buyers, and we will make reforming negative gearing and the capital gains tax discount a priority in the next parliament, including when there’s a minority government.”

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