Treasurer Joe Hockey has reinforced that there will be no changes to negative gearing, saying any changes will have “significant flow-on consequences”.
Hockey’s comments came after shadow treasurer Chris Bowen raised the issue last week during an address at the National Press Club. Bowen suggested that the Labour party will head into the election with a policy of winding back negative gearing – perhaps restricting it to new property or just one investment property.
However, Hockey says any changes to negative gearing may result in unaffordable rents and a lack of financial security in the future.
“We’ve seen numerous policy failures in relation to taxation. If you change negative gearing, then there are significant flow-on consequences from people that rent homes, and that needs to be properly considered,” he said in Sydney.
“A lot of Australians have invested their hard earned money in real estate, and in doing so, they have offset the losses of that real estate against their primary income, in order to give themselves and their children some financial security.
“At the same time, there is a very strong argument that if you were to abolish negative gearing, you would see a significant increase in rents. For a lot of people, a massive increase in rents is so unaffordable.”