Liberal MPs break ranks over negative gearing

by Miklos Bolza30 Jan 2017
While Treasurer Scott Morrison is overseas seeking solutions to Australia’s housing crisis, a number of Liberal MPs have spoken out about the party’s stance on negative gearing.
 
In an interview with The Australian, Sydney MP John Alexander said that there needed to be a “contest of ideas” responding to the housing affordability problem that included a debate on negative gearing.
 
He proposed that the tax concession could be wound back, altering the rate of deductibility for new investors in response to market conditions.
 
“It is not saying negative gearing is in or out, it is saying that it’s a very dynamic tool that could be very finely calibrated … in response to the market.”
 
The government should rethink its position opposing any change to negative gearing, he said.
 
“I think this is where politics has got in the way of developing better policy; because Labor said ‘we are going to get rid of it’, we said ‘we are not going to touch it’,” he said.
 
“That was pre-election and we have now passed the election, we have had the hearing completed into housing affordability and the findings have been tabled. We are looking at the situation and we should now be free to make the best policy based on the facts that we have discovered.”
 
Andrew Hastie, member for Canning, told The Australian that housing affordability was a “moral issue” and said that “everything should be on the table” as the government prepared its response.
 
“We need to be doing a full diagnosis of what is driving unaffordability, and until we have consensus around the drivers of the unaffordability crisis, we aren’t going to come up with the right policy solutions,” he said.
 
“Once we work out the problem, we need to get to work on the response, and if that includes negative gearing then we should make changes.”
 
The government should also consider giving “everyday Australians” access to tax deductions on mortgage repayments, Hastie said, instead of the current regulations which solely offer this privilege to investors.
 
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Low interest rates, not negative gearing to blame for unaffordability?
 
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