NSW minister challenges federal government on negative gearing

The debate over negative gearing has flared up again, with a senior New South Wales Liberal party politician breaking ranks with the federal government by suggesting the policy should be revisited.

NSW minister challenges federal government on negative gearingNSW minister challenges federal government on negative gearing

NSW minister challenges federal government on negative gearing

The policy debate over how to solve the housing affordability crisis is again heating up, with the latest salvo fired by someone on the government's own side.

In a speech to the Committee for Economic Development in Sydney, New South Wales Planning Minister Rob Stokes contradicted the federal government's line on negative gearing.

"Surely the focus of our tax system should be directed towards the type of housing we need. Why should you get a tax deduction on the ownership of a multimillion-dollar holiday home that does nothing to improve supply where it's needed?"

Labor's treasury spokesman Chris Bowen applauded the comments, which are in line with the Labor party's policy to limit negative gearing.

"Well I welcome his contribution and it's a commonsense contribution. Some of the comments in Mr Stokes' speech could have been given by me .... and have been given by us, saying that the time has come to stop the tax concessions for buying 5th, 6th and 7th houses when people can't afford their first house."

The Government ruled out changes to negative gearing during the election campaign this year.

And speaking on Melbourne radio 3AW, Prime Minister Malcolm Turnbull did so again.

"Well we haven't got any plans to review the policy we took to the election on that. Can I just say to you that the issue of housing supply and housing affordability is overwhelmingly a question of supply. What we need to do, and what we're working with state governments now to do that, is zone for more density for more housing - for more affordable housing. The critical thing is to build more dwellings - that's what you need to do."

Nowhere is housing affordability a bigger issue than in New South Wales.

Next year, the housing shortfall in the state is tipped to hit a record 100,000 dwellings.

Nationally, an extra 250,000 homes are required.

Last weekend, the New South Wales government announced almost 200,000 more homes were expected to be built over the next five years, with a record $20 billion of residential construction underway.

Federal Treasurer Scott Morrison says the policy platform put forward by Rob Stokes is one that is very focused on Sydney.

"As commonwealth treasurer, I need to look at policies and how they impact right across the country, so what might help in Pittwater might not help in Tasmania. In fact, it could actually have a negative impact because there's no one single housing market. Issues on negative gearing have been demonstrated in the past to drive up rents."

Glenn Byres, from the New South Wales Property Council, says negative gearing would only deliver a 0.5 per cent change to house prices, and argues there are more efficient ways to make an impact.

"Stamp duty receipts in the New South Wales have doubled in the last four years from around $4 billion to around $8 billion - so if Rob Stokes wants to do something for affordability, he can walk down the corridor, knock on Mike Baird's door and tell him to slash or abolish stamp duty."

Federal opposition leader Bill Shorten says the Prime Minister's only policy on housing affordability has been to advise first homebuyers to get rich parents.

"Malcolm Turnbull is truly out of touch with the lives that most Australians lead. We need to do something about sensible, prospective reform of the taxation system so we're not favouring investors buying their tenth house over young people in their 20s and 30s who just want to live the Australian dream of buying their own home."

Housing affordability will be on the agenda of a state and federal treasurers' meeting next Friday, although Rob Stokes has now shed doubt on whether consensus can be reached.

"Earlier this year the New South Wales government was ready, willing and able to have discussion about tax. Disappointingly, our leaderhip on this issue fell victim to 'Canberra culture' which promotes opposition over consensus."

 






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