Focus on housing affordability, not negative gearing: NSW planning minister

by AB28 Nov 2016
NSW planning minister Rob Stokes says a shift in focus is needed, away from negative gearing to housing policies that “focus on equality of opportunity" and ease Sydney’s affordability crisis, according to The ABC. 

Stokes made clear in a speech to the Committee for Economic Development last week, that he was focussed on enabling Sydney families to get a foot-hold on the housing ladder. 

He said more was needed than supply alone to ease Sydney’s affordability crisis. 

"Earlier this year the NSW Government was ready, willing and able to have a discussion about tax. Disappointingly our leadership on this issue fell victim to the Canberra culture that promotes opposition over consensus," he said.

"It's a major concern to me as Planning Minister of the most populous state, but also frankly as a dad of three young children, of increasing reports that without parental support the dream of home ownership is becoming harder and harder to obtain.

"Surely the focus of the tax system should be directed towards the type of housing we need. Why should you get a tax deduction on the ownership of a multi-million-dollar holiday home that does nothing to improve supply where it's needed?

The ABC reported that Tim Williams, chief executive for the Committee for Sydney, had called the housing affordability issue a "national emergency".

"We've doubled housing in Sydney in the last three to four years, and the price has gone up 30 per cent ... housing supply won't solve this problem, so something else is causing this problem," he said.

"It's entirely because of the tax incentives for home owners who have multiple homes that are squeezing poorer people out at auction.
"The Minister is absolutely on the button and he's very brave to raise this discussion."

The Housing Industry Association (HIA) also responded, stressing that taxes charged on housing cripple affordability. 

“Housing affordability will not be addressed by political point scoring around negative gearing or capital gains tax,” said HIA’s chief executive, industry policy and media, Graham Wolfe. 

“It’s a distracting and lazy debate and one where all three levels of government point a finger at each other, when it’s a fact that around 40 per cent of the cost of a new home is taxation.
 
“Increasing the supply of new housing is an obvious key to improving housing affordability,” said. “But retaining the enormous taxation burden on the cost of new homes is an anathema to addressing the problem.

“It’s the taxes and levies that are charged on every new home that overwhelmingly defeat all attempts to reduce housing costs,” said Wolfe. “Yet housing, a basic requirement that all Australians should be able to access, is taxed more heavily than other parts of the economy.”
 

COMMENTS

  • by Tom 28/11/2016 10:37:35 AM

    Surely this has to be mischievous reporting and a distortion of the quote made by Rob Stokes.

    If true, how can our politicians be so poorly advised that they do not understand the requirements of Negative Gearing?

    Mr Stokes is quoted as saying "Why should you get a tax deduction on the ownership of a multi-million-dollar holiday home that does nothing to improve supply where it's needed?". However the error is that a Holiday Home does not qualify for a tax deduction UNLESS it is Rented out and earns an income.

    You cannot claim Negative Gearing against a property that does not generate income. If our politicians do not understand the basics of Negative Gearing, perhaps they need to get an understanding from somewhere other than the Anti-Negative Gearing media.

    Perhaps they should seek the guidance of a Practicing Tax Accountant and not an academic one. Or perhaps a briefing form the Tax Commissioner may not be out of place either.