Doorstop interview

CHRIS BOWEN, SHADOW TREASURER: Good morning.

Two years ago, Labor announced our comprehensive negative gearing and capital gains tax policies. The Government went into an almost immediate scare campaign about those policies.

 

The Prime Minister and the Treasurer talked about a ‘sledgehammer’ on house prices, a ‘housing crash’ and a sledge hammer impact on the economy.

 

Now we knew that that scare campaign was shrill; we knew that that scare campaign was unfounded, and; we now know beyond a doubt that it was fundamentally dishonest.

 

Documents released today under Freedom of Information laws show that the Treasury told the Government in March 2016, almost two years ago, that those claims were unfounded.

 

The Labor Party said that our negative gearing and capital gains tax policies would put downward pressure on prices, housing prices, but not cause a housing market crash because we carefully designed those policies. We grandfathered all existing investments. We made sure, after a lot of policy work, that our policy would be applicable and relevant for a whole range of market conditions in the housing market.

 

The Prime Minister personally claimed that investment in partnerships and businesses would be ground to a halt. The Treasury document shows that that is just untrue, that those would be unaffected by our policy changes.

 

Now, the Liberal Party could have engaged in serious policy work on negative gearing and capital against tax. We have the most generous property tax concessions in the world. We have a housing affordability crisis.

 

Our reforms, Labor’s reforms, are good for housing affordability, good for the Budget, and good for financial stability.

 

Instead, Malcolm Turnbull and Scott Morrison engaged in a cheap and dishonest scare campaign.

 

Now Scott Morrison in particular has serious questions to answer. Scott Morrison is very quick to release alleged Treasury analysis of Labor’s policies, selectively, when it suits him. He likes to concoct Treasury analysis about Labor’s tax policies. Well, he had this advice sitting on his desk for two years. He refused to release it. Only after a concerted campaign by the ABC has this document been released, ordered by the FOI Commissioner. So Scott Morrison has a personal case to answer here as to not only why he ignored this Treasury advice, but suppressed it, and then continued with the dishonest scare campaign.

 

I am disappointed today to see the acting Treasurer continue the lies, saying that there was other Treasury advice, or saying that somehow or other market conditions had changed. This was clear Treasury advice, two years ago.

 

Labor’s policy that we took to the last election we will take to the next election. It’s a perfectly designed and calibrated policy. It’s good for housing affordability as confirmed by this Treasury document, good for the Budget bottomline as confirmed by this document, and good for financial stability.

 

Today we see again, concerns about household debt in Australia, which of course continues to grow, in part, fueled by negative gearing – the most generous property tax concessions in the world. The Labor Party says enough is enough, this is not sustainable, policy has to change. The Government continues with their scare campaign, will have some serious questions to answer today – Malcolm Turnbull and Scott Morrison – about why they suppressed this advice which showed that they were lying.

 

Happy to take some questions.

 

JOURNALIST: It’s been a few years since this advice was given, since then we have seen some softening of the property market. Do you think that that still stands that there will be significant impacts if it were to change?

 

BOWEN: Well what we said consistently was that this was a policy designed to put downward pressure on prices, to take the heat out of price rises, and that it was unsustainable, what we were seeing.

 

We also said at the time that this was a generational reform. By that I mean we don't change negative gearing very often, the last change was in 1985, last serious change was in 1985. If we implement this change I would imagine it's not going to be changed for a very long time after that. So you make these changes based on the right policy settings for a whole range of market conditions. The market is going to go up and down over decades in different places at different times. Of course Australia does not an homogeneous housing market.

 

The other point I would make is this: that the Government can claim mission accomplished on housing affordability if they wish to. If the Government wants to go out and say to young people still struggling to get into the housing market in capital cities in particular but not exclusively that the problem is solved, that it's all fixed, that there is nothing more to be done. Well they can tell that to Australia's young people but we take a different view.

 

JOURNALIST: So you still think that the changes, the policy change will still take the heat out of the market?

 

BOWEN: Well the policy is still the right one because it was the right one for a range of market conditions then. And you will always see Sydney responding differently to Perth for example, not all the housing markets respond differently at different times, that's always the case. Our policy is the right one for different times and for different market conditions because it has to be. Because you make these changes to apply for a long period of time and the market is going to change substantially but the fact of the matter is that we do have a housing affordability crisis in Australia, not a term I use lightly. It continues despite Scott Morrison putting his feet up and saying there is no problem here, nothing more to be done, mission accomplished. We take a different view.

 

JOURNALIST: In that Treasury document that you’re referring to it says the impact on the housing market, the impact on property prices particularly in the long term, it says (inaudible) Labor’s policy on negative gearing and CGT discounts?

 

BOWEN: Well because it is the right policy. It's good for housing affordability as this document confirms. The document also says it will change the mix of property press purchases so not just property prices but will change the mix which means less investors and more first home buyers but it is also very good for the Budget, raises billions of dollars over the decade and importantly it is good for financial stability. I mean we have household debt amongst the highest in the OECD and while I'm always careful about my public comments and never alarmist: that is a concern. That is a concern and the fact of the matter is that it's fuelled by the tax concessions in Australia and the current situation is unsustainable.

 

So that is why we will go to the next election with the same policy as the last election on negative gearing and CGT.

 

JOURNALIST: Do you think it’s the right time to do so given that housing markets are softening and there are investors out there who have invested a lot of money and could not be facing financial situation disrupting quite significantly if you were to introduce this change.

 

BOWEN: Well, of course, our changes will be grandfathered so that nobody who has invested in good faith is affected, it's about future investments. That has been the case since the policy was announced, it will continue. You always get people saying this isn't the right time, what they are really saying is they don't like the policy. When you say this is not the right time for this policy you are really saying I don't want to see it implemented.

 

All policies you get somebody saying "alright this is not the right time" well it is the right time when you have got a housing affordability crisis. It is the right time when you have continuing budget deficits. It is the right time when you have got household debt at record levels, amongst the highest in the OECD. It is the right time for that reform, that is why we will implement it in Government. I mean I wish the Government would implement it today. Say "Yep, our scare campaign was a bunch of lies, we get it, we will implement the policy". They are not going to do that so it will fall to us to implement it if we win the next election.

 

JOURNALIST: You said it took you a couple of years to get this information, you also mention Mr Morrison releases different bits of information when it suits. If you were to become Treasurer (inaudible) consistency in the release of information (inaudible)?

 

BOWEN: Yes I have been very concerned about the current Treasurer’s politicisation of the Treasury. The Treasury is a fine institution which have served Governments of both persuasions very well. I get concerned when I see the Treasurer commissioning advice from the Treasury, selectively releasing it to some journalists and not others and that is always about Labor policies. So that is a politicisation of the Treasury and I get very concerned about that. And in some occasions he has claimed that there is Treasury modelling or Treasury analysis and it turns out it has actually been done in his office not by the Treasury so he has been dishonest about that. That is an even worse politicisation of the Treasury.

 

So of course the Treasurer will undertake modelling analysis from time to time but as Treasurer I would always insist that if that were to be released it would be released fairly and consistently and openly and there have been occasions when the Government and the Treasurer has referred to Treasury analysis most recently about inequality and said that it existed. When I've FOI'd it, it has taken me a long time to get it. You would think that if he refers tomodelling or analysis in a speech he would be happy to release it. I mean this is the Treasurer himself referring to so called Treasury analysis in a speech and then not releasing it even when I FOI it. It took us some time to get that. So I am concerned that this Treasurer has reached new lows when it comes to politicising the Treasury and I think it should stop. It shouldn’t wait for a change of Government. He should stop it now.

 JOURNALIST: Will Labor be seeking Susan Lamb’s resignation before Parliament returning in February?

BOWEN: No, not at all. Let’s be very clear. There was a motion to refer Susan Lamb to the High Court. I voted for it. As did every Labor MP. As did every non Government MP. The independents voted for that referral because that was the right thing to do. But also, not just Susan Lamb. Those MPs who could not provide the relevant documentation when they were meant to under the Government’s disclose regime. Including Liberal MPs such as Julia Banks.

 

Now if there’s going to be referrals to the High Court, it should be done on that basis. That everyone who’s got questions to answer should be referred to the High Court. Now in Susan’s particular case, she clearly took reasonable steps unlike Barnaby Joyce and Fiona Nash and the rest who did nothing. She contacted the Home Office, sought to renounce her citizenship, the Home Office questioned whether she even was a citizen, that took some time to resolve. There were some personal circumstances there which made the parents marriage certificate difficult to exercise which I won’t go through here, but those matters could be traversed in court if necessary. Susan was happy to see that happen.

 

That’s why she voted, which every Labor MP to see that referral. The Government voted against it because they didn’t want their MPs brought before the High Court. What have they got to hide? If they’ve got nothing to hide, nothing to fear, they should refer their MPs to the High Court. They voted against it, running a protection racket. Now if the Government propses to in a partisan fashion, use their numbers in the House of Representatives to change the precedent that MPs are only referred on a bipartisan basis, that says more about them than it does about Susan Lamb who is a very good MP. A very good MP who has worked very hard for her community, and this Government just continues to play cheap political point scoring.

 

JOURNALIST: There has been some constitutional advice suggesting there may be some issues there, shouldn’t this be determined by the Court?

BOWEN: That’s why I voted and every Labor MP voted to refer her and other MPs including Liberal MPs like Julia Banks to the High Court, because there are real questions about all of them on the Government’s side. The documentation was meant to be produced. Now David Feeney, for example, could not produce documentation. He referred himself. The Labor Party referred him at his request. Now we’ve got Liberal MPs who have not been able to produce their documentation. They sit unreferred because the Government refuses to see the High Court deal with it. So we are not going to agree to one MP being singled out when a whole range of MPs. I mean this saga has been going on for months. For months.

 

The Government should just agree to sort it by referring those MPs who are in the referral motion, including some Labor MPs. We weren’t saying it should only be Liberal MPs and National Party MPs referred. We said refer those who have questions to answer, or there have been issues raised. The Government did not want that to happen. What are they hiding? I think it was 8 Liberal MPs who didn’t produce all their documentation. But what are they hiding for those MPs who did not produce all the documentation. What have they got to hide? Why are they concerned? Why are they singling out one Labor MP, what is the protection racket that they are undertaking for their own MPs?

 

JOURNALIST: So ultimately is it sort of (inaudible)?

 

BOWEN: Well we will see what happens when the Parliament returns, we are very confident in Susan Lamb’s case in particular. We were happy to see her referred. The Government chose not to refer her. Christopher Pyne in his normal political cheap partisan way chooses to raise this today. Susan will be getting on with the job and representing the people of Longman I’m sure.

 

Okay? Thanks.