The SMH argues in its recent editorial that Malcolm Turnbull has resorted to cheap politics, instead of engaging in a constructive debate about taxation.
Last week, Australians have endured a scare campaign using invisible data and exaggeration to claim that Labor's plans to reduce negative gearing and the capital gains tax discount would "smash" house prices.
Labor plans to end negative gearing for investors in established property from 2017, while halving from 50 to 25 per cent the capital gains tax discount on all property sales.
Stunned by such courageous policy, the Coalition first claimed that negative gearing helped average households more than the rich. It does not. Higher income households use the tax break to reduce their taxable incomes.
Then Mr Turnbull made assumptions about how investors would react to Labor's plan. Without any evidence - and, in fact, contrary to Treasury's view - he asserted 30 per cent of investors would stop buying existing houses and that reduction in demand would cut prices.
The government is none the wiser about whether the evidence exists.
Labor's proposal is not perfect.
Potential problems can be tackled by adjusting Labor's plan. Both sides should adjust the policies to find the best outcome with least risk.
The sad thing is that Mr Turnbull could have facilitated constructive policy development by releasing a tax white paper, holding a tax summit and being open with the public about the evidence for competing options. Instead, he has taken options off the table and resorted to cheap politics.
