The Coalition government rolled out Yellow Brick Road founder Mark Bouris and the heads of several real estate lobby groups in an attempt to keep pressure on Labor’s negative gearing policy.
Treasurer Josh Frydenberg, senator Zed Seselja, and Prime Minister Scott Morrison attended the meeting where concerns were raised chiefly about the timing of Labor’s policy.
“When you converge the royal commission and APRA regulation with a big fiscal policy change you are asking for trouble,” Mark Bouris said.
“Its not whether the policy is good or bad, it’s about the timing of it and as the third largest aggregator in Australia I can tell you there is market anxiety out there.”
Mr Bouris said that the royal commission and APRA caps had been lifted there was now more of a concern around “big new fiscal policies”.
About 66,549 teachers, 47,200 nurses and midwives and 8,106 emergency services personnel negatively gear. Of the 1.3 million Australians who declared a net rental loss, 588,169 were female.
The treasurer attacked Labor’s idea of fairness.
“More than six in 10 of those tax filers making a capital gain have a taxable income under $80,000. Labor’s idea of fairness is not only to discourage those hard working Australians who save, but to punish those who do.”
‘Labor’s plans are fair and progressive’
Opposition Treasurer Chris Bowen said the 1.3 million people receiving tax benefits from negative gearing would continue to under Labor.
‘Whether franking refunds or negative gearing concessions, the biggest beneficiaries are wealthier Australians which goes to show Labor’s plans are fair and progressive”.
The biggest lobby group in real estate, the Property Council of Australia, said the tax would curtail property as an investment option because new stock was only a small proportion of overall housing that investors can buy.
The Labor policy allows for only new stock to be newly negatively geared against overall income.
“It’s not the time to be making changes to negative gearing or capital gains tax that undermine investor confidence in new or established housing which helps meet the housing needs of the one-third of Australian households who rent,” Mr Morrison said.
One of the top house price forecasters SQM’s Louis Christopher told the roundtable that if Labor’s negative gearing changes were implemented yields on investment properties would have to rise and and that would mean rents would have to increase.
Other participants in the roundtable included director of hedge fund VGI Partners Global Investments Noel Whittaker, RiskWise Property Research chief executive Doron Peleg, Property Investment Professionals of Australia chairman Peter Koulizos and Real Estate Institute of Australia acting chief Jock Kreitals.
Matthew Cranston, Financial Review, 18 February 2019