Cut negative gearing to help poor: ACOSS

13 Aug 2012, 6:28 pm   -   Source: AAP
Tax breaks for home loan borrowers need to be cut to tackle homelessness, a welfare group says. (AAP)

Tax breaks for home loan borrowers need to be cut to tackle homelessness, a welfare group says. (AAP)

The Australian Council of Social Services wants negative gearing cut in a bid to tackle homelessness and inflated housing prices.

Tax breaks for home loan borrowers need to be cut to tackle homelessness, Australia's peak welfare group says.

In a bid to combat soaring house prices, the Australian Council of Social Service (ACOSS) says the federal government needs to cut negative gearing, a tax break for mortgaged landlords.

"We do need the political parties to be having a stronger focus on what needs to be done to address poverty and inequality in Australia," ACOSS chief executive Cassandra Goldie told reporters on Monday.

"The experts tell us, we also know, that negative gearing does need to be addressed."

Dr Goldie said while ACOSS understood the concerns of investors, federal government policy needed to alleviate Australia's inflated housing costs through a "staged process".

"We've got one of the most expensive housing markets in the OECD."

The Hawke government scrapped negative gearing in the mid-1980s but the policy was reinstated after investors fled the housing market, leading to a shortfall in rental accommodation.

Dr Goldie made the recommendation to cut negative gearing following the release of an ACOSS report, which showed 81 per cent of emergency housing providers are struggling.

After homelessness, mental health was the next most sought after service cited in the ACOSS survey of 665 welfare agencies, with 57 per cent of providers saying they were asked to deal with mental health problems.

Domestic violence and sexual assault support services were also stretched, with 52 per cent unable to meet demand.

The annual ACOSS report also found that 73 per cent of agencies that offered legal services were struggling to help everyone in need.

Almost 11,700 people - about 14 per cent - who asked for help had to be turned away in 2010/11.

Like business groups, ACOSS also wants the Newstart unemployment benefit raised, with Dr Goldie advocating a $50 a week increase to the existing $245 a week benefit for singles.

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