A property investment group has demanded Federal Labor “come clean” on plans for negative gearing.
The Property Investors Council of Australia (PICA) said recent media reports indicate the opposition may be “flip-flopping” on its controversial policy.
Labor’s proposal has been to limit negative gearing to new housing, saying the tax subsidies are unaffordable.
But according to some reports this month, Labor had suggested rethinking the proposals. PICA chairman Ben Kingsley said it was “no doubt due to falling property prices”.
Kingsley is calling on the party to come clean on when it intends to implement the policy, calling it “ridiculous” and “absurd”.
He said, “Restricting negative gearing to new property was always a ridiculous so-called ‘solution’ to Sydney’s strong price growth, which has now well and truly dissipated because it was merely a sign of the peak of a market cycle.
“If the policy was absurd back then, it’s even more so now, with the national economy flat-lining due to a number of poor indicators including significant property price falls in our two biggest cities.”
Kingsley said a timeline was needed because there was too much at stake to keep the public in the dark about the changes.
“The majority of every Australian’s wealth is in their property so having the threat of their home’s value falling even further is no doubt part of the reason why our economy is in the doldrums,” he said.
“It’s clear that people are fearful about these dangerous changes, both property owners and investors alike, so if Federal Labor is thinking about introducing these measures as early as July this year buyers need to have enough time to organise their finances and come to the market in the next few months to meet this deadline.
“With Labor tipped to win the Federal Election, the uncertainty is affecting the Australian property market and the broader economy, which is why Bill Shorten should announce the party’s intentions today. There is no reason not to tell us their plans as the policy was formulated years ago.”