Negative gearing quarrels in the lead up to the federal election distracts from more important housing policy reforms, a leading housing industry association has warned.
“Negative gearing is a sideshow to addressing the housing affordability and home ownership challenge facing younger and future generations of Australians,” Housing Industry Association (HIA) chief executive of industry policy and media, Graham Wolfe said.
“Political ping pong over negative gearing is distracting from the policy reform focus that is required to address rising regulatory costs and highly inefficient taxation of the housing industry, especially new home construction.”
According to Wolfe, the argument that housing is a state-based issue is “old and tired” and it needs to be properly and thoroughly tackled at a federal level.
The most pressing issue, he said, is that new housing is the second most heavily taxed large sector of the Australian economy, yet more than 50% of these taxes are “inefficient”.
Moreover, Wolfe argues, most of the burden of taxation on housing falls on home buyers. An analysis by the HIA shows the price young couples pay in terms of financing the extra cost of a home due to taxes can amount to around 33% of their after tax incomes.
“Given the importance of the industry to Australia’s future growth and prosperity, the housing industry deserves a comprehensive policy agenda from all federal political parties – something that is still to be fully outlined in the current election campaign,” Wolfe said.