Andrew Laming (Bowman, Liberal Party) Share this | Hansard source

I know this does evoke some emotion from the other side, but look: you cannot simply rule out 90 per cent of sales from the negative gearing option and force 40 per cent of your investors into the remaining 10 per cent: new properties. It will cause extraordinary distortions, whether a bubble in the apartment market, or a drying up of rental opportunities; it is very hard to model the first-round and second-round effects. The first-round effects are that investors go and chase where they can get a reasonable deduction—that is, new properties. But do councils release land for new properties? Potentially, no faster than they currently do. Then you have the second-round effect that people know that it is just like the car that you drive out of the car yard: the minute the keys go in the ignition the value falls. Here the value falls because you know the next person will not get the negative gearing benefit from it.

I urge the Labor Party one more time: you are in a world of pain; this will hang around your neck at the next election; please reconsider your policy for negative gearing, because right now, around this nation, you are walking around with a massive target on your back.

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