Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Hansard source

I want to thank the member for Fairfax for his question. What the honourable member is canvassing, as I understand it, is this proposition: at the moment, as we know, home interest payments on your own home are not tax deductible but the profit on the sale of a home is free of capital gains tax. What the honourable member is suggesting is that there should be an alternative whereby interest payments were tax deductible but the sale on the house would be assessable to CGT in the normal way as though it were any other asset.

While the honourable member did not mention it, others who have canvassed this type of alternative have said that the householder, the resident, would bring to account as income notional rent—so they would be treated for tax purposes as though they were renting that house so they would have notional rental income against which they would offset their interest payments, and so it would be treated in the same way as an investment property.

That proposition, which has been made before by others—but eloquently here in the House of Representatives by the member for Fairfax—is one that stands in stark contrast to anything that has come from the Labor Party. This is actually a suggestion.

I am not in a position to say that the government would accept it or favours it, but it is an idea. It has been made before. It is something that should be considered, and so there you have a party with only one representative in the House of Representatives actually making suggestions about tax reform and tax change, and whole ranks of the Labor Party are unable to do anything. So I say thank you to the member for Fairfax. He has shown at least that he wants to play a constructive role in this important debate.

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