MASTER BUILDERS NEGATIVE GEARING

Some Australians reading the front page of today’s The Australian would be forgiven for thinking the Master Builders Association has modelled Labor’s reforms to negative gearing and the capital gains tax discount.

It does NOT. 

This research does NOT model Labor’s reforms to negative gearing – the Master Builders admit themselves that they fail to account for the fact Labor’s policy fully ‘grandfathers’ existing property investments meaning any investment purchases before the start-date are protected.

 

The Master Builders ‘modelling’ assumes that on Day 1 of Labor’s policy, all property investors who are currently negative gearing immediately lose access to negative gearing.

 

That is a major flaw in the modelling – that does not represent Labor’s negative gearing reforms.

 

To be fair to the Master Builders Association, they did meet with the Shadow Treasurer to present their report back in June this year. In that very meeting they were told that their modelling had that flaw in it. Four months later and the modelling has not changed.

 

The chief executive of Stocklands, Mark Steinert, one of Australia’s largest property developers, said on Labor’s policy and its focus on new properties “our business will rip”.

 

Earlier this year, Scott Morrison was caught out sitting on Treasury advice that showed modest impacts as a result of Labor’s negative gearing reforms.

 

Labor is not ‘ending negative gearing’ – it’s reforming it to ensure it works best for the economy and jobs by retaining it for new properties only. Any property investments made before the policy start-date will still be able to access negative gearing.

 

And we are retaining negative gearing for new properties, so if property investors want to access negative gearing, they’ll need to buy a new property and that generates all of the construction and jobs that goes along with it.

 

Labor is the only major political party with housing affordability policies that put first home buyers on a level playing field with investors, return revenue to the Budget bottom-line, and promote financial stability.