Treasurer Scott Morrison
has again defended his focus on supply, calling the push to regulate negative gearing a “red herring” which distracts from the issue at hand.
In a doorstop interview in London, Morrison said his time in the UK had reinforced his views that improving property supply was the right approach to tackling affordability especially since the UK had never had negative gearing at the same levels as in Australia.
“[It doesn’t] happen here but yet they have the same housing affordability problems. I think that underscores the fact that that is a bit of a red herring argument.”
While governments could bring in macro prudential controls to properly limit the effects of investments, the primary issue for housing affordability was increasing supply, he said.
Morrison said that one of the key takeaways of his visit to the UK was putting an onus on developers to supply affordable housing for all areas in the market. This already occurs at a small scale in certain regions in Australia and is increasing elsewhere around the country, he added.
“What is interesting [in the UK] is that was a pre-existing condition. [Take] the example over in Southwark – it is 25 per cent that needs to be affordable.”
When asked about Liberal backbenchers who have called for a debate including negative gearing
, Morrison said that any overheating of investor sentiment had already been dealt with by macro prudential changes.
He rejected the call for change and asked people to look at the outcomes instead.
“I don’t get as fixated on wearing around a t-shirt for particular policy prescriptions. I am about the outcomes and if the outcome means you can cool investor sentiment without crashing the property market in Australia by using those more subtle measures then that is a much better way to do it.”
The negative gearing measures proposed by Labor would do nothing except push rents up Australia-wide, he said.
“I think what Labor have done on negative gearing has become jingoistic on housing affordability policy. They believe in silver bullets. It is foolish and it is reckless and it doesn’t help anybody.”
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