Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

In rising to speak on the Tax Laws Amendment (Norfolk Island CGT Exemption) Bill 2016, I move:

That all the words after 'That' be omitted with a view to substituting the following words:

'while not declining to give the bill a second reading, the House calls on the Government to make Australia’s capital gains tax regime fairer and more sustainable.'

Labor supports the measures in this bill, in the same spirit with which we supported the initial suite of legislative changes in the Norfolk Island Legislation Amendment Bill 2015, passed by this parliament with bipartisan support last May.

This bill goes to the particular issue of capital gains taxation, providing the same protection against retrospectivity as for assets held by Norfolk Islanders, as was put in place when the capital gains tax was introduced in Australia in 1985. This is, indeed, an exciting time to be talking about capital gains tax. It is interesting, however, to note that the government has not shown the same passion and interest in economic reform for the mainland of Australia that it has shown for Norfolk Island. The Prime Minister, this week, ruled out changes to the capital gains tax discount, choosing the sort of scare campaign that he promised he would not engage in over a sensible economic conversation with the Australian people.

The government's own financial systems inquiry describes the combination of negative gearing and capital gains tax discount as a major tax distortion. We saw, in his last speech to the parliament, the former Treasurer, Joe Hockey, saying that negative gearing should be restricted to new-built homes. We have had former Liberal Premier of Victoria Jeff Kennett saying that Labor's reforms in this space were sensible policy and urging his own side of politics not to engage in the sort of fearmongering that Australians were promised had been removed when Tony Abbott was deposed from the prime ministership.

These unfair and unsustainable tax concessions are among the fastest-growing tax concessions in the budget, and they are contributing to house prices massively outstripping wages growth. On the latest figures, wage growth is running at around two per cent—an 18-year low. It has been nearly two decades since wages grew this slowly, and yet, in recent years, we have house prices growing at around 10 per cent a year, so you can understand why young Australians are frustrated when they see house prices growing five times as fast as pay packets. Young couples in my electorate come to me and say, 'The deposit always seems to be slipping out of our grasp. We just can't get a foothold in the housing market.'

Over the last generation, the chances of young Australians owning their own home has halved. The home ownership rate for 25- to 34-year-olds was around six in 10 in the early 1980s. Today, it is around three in 10. But you do not hear the Prime Minister and the Treasurer talking about how tough it is for young Australians to buy their first home; instead, you hear them busy defending the rights of those who are tax deducting their 10th home. They will have you believe that it is teachers, nurses, police and cleaners who are the principal beneficiaries of negative gearing but, in fact, the average tax benefits to surgeons and anaesthetists are multiples of what they are for teachers and cleaners. It might be true that there are more teachers than anaesthetists in Australia. If you add up anything that teachers have—

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