Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Prime Minister and refers to his previous answer. Does the Prime Minister rule out announcing any changes to capital gains tax?

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

The government will make a full tax proposal. We will do so after we have considered all of the considerations—all of the matters—and I can say to the honourable member opposite that increasing capital gains tax is no part of our thinking whatsoever. I could also say to the honourable member, who said I was a liar when I suggested that his negative-gearing proposal would result in a decline in property prices—the very eloquent member there, who is so happy to use strong arguments; let me put this to the honourable member—in December, 34.7 per cent of all new housing loans were made to investors. So what the Labor Party proposes to do is, from 1 July 2017, remove from the buyers for established property over one-third of the demand. And these economic geniuses want us to believe that is not going to have any effect on prices. They believe you can take one-third of all of the buyers out and prices will remain the same. What sort of fantasy world is that? Let me say for the benefit of the honourable member, who, like me, lives in Sydney: that 34.7 per cent is a national average. The percentage of investors in terms of homebuyers' residential purchases in Sydney or, indeed, in Melbourne would be, as we know, considerably higher.

We know that there would be nothing more damaging to confidence and growth than smashing housing prices. Every single Australian recognises that the bulk of most families' assets is in their home. It is well over 65 per cent across the board, so you knock that price down; you knock that value down. That is what Labor is proposing to do—cut out over a third of the demand and knock that price down. And what does that do for consumer confidence? Are people going to go out and buy a new appliance? Are they going to borrow money to start a small business? Are they going to hire somebody if they see their greatest asset shrinking before their eyes, at the hands of the Labor Party? Every measure they propose is calculated to drive our economy into the ground.

Mr Fitzgibbon interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Hunter will cease interjecting.

Ann Sudmalis (Gilmore, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. How is the government ensuring that companies operating in Australia pay their fair share of tax? Will the Treasurer update the House on the new requirements on foreign investment that will ensure foreign companies investing in Australia pay all their taxes?

Mr Conroy interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Charlton is warned.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Gilmore for her question. When it comes to ensuring multinationals pay all the tax that they should be paying in Australia, you have got to use every single lever that you have available to you. Every single opportunity that the government has to ensure that multinationals pay their fair share of tax in this country has to be deployed. That is why, today, I have put in place a new condition that will be placed on all foreign investment approvals in this country that they must pay their tax here on what they earn in Australia. That requires compliance with Australian law and it requires compliance with Australian tax office directions to provide information in relation to their investment and to advise the ATO if investors enter into any transactions with nonresidents to which transfer pricing or anti-avoidance measures of Australian tax law may potentially apply.

Amongst many of these new controls, there is also that additional conditions may also be applied where a significant tax risk is identified in a particular case. These may include requiring the investor to enter into advance pricing arrangements with or to seek rulings from the ATO or comply with other directions that the ATO may apply to their specific circumstances. If the investor who would have been given a foreign investment approval fails to meet those conditions, they will be faced with divestment of that investment.

This is a serious lever that this government has chosen to apply in these cases. It was not one that those opposite used to apply. In the six years they had to address multinational tax avoidance, what did they do?

They did nothing. When this government put multinational anti-avoidance laws into this parliament, what did those opposite do? They all voted against it. Every single one of them voted against laws that would ensure multinationals would pay their fair share of tax in this country. Digital services legislation which we have brought into this parliament will also ensure that multinationals pay their fair share of tax at the point of sale, and of course there are the low-value threshold changes that we will also be bringing forward. When it comes to ensuring that multinationals pay their fair share of tax, whether it is with the legislation we have introduced or whether it is the foreign investment approvals that we provide, we will ensure that the conditions are there to ensure that they pay that tax.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister rule out making any retrospective changes to negative gearing—yes or no?

Mr Ewen Jones interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Herbert will cease interjecting.

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

I am glad the honourable member has asked me about negative gearing, and I can repeat again for his information that the government will set out its tax policies in the lead-up to the election—

Opposition Members:

Opposition members interjecting—

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

In the lead-up to the budget and in the budget, in the normal way. And we will do so in a considered way, taking into account all the relevant factors, which the honourable member's side plainly has not.

They have on the Labor benches the member for Fraser, a distinguished former professor of economics, and he was asked today on Sky News about negative gearing by Kieran Gilbert. Kieran Gilbert said, 'Have you done the modelling to show that house prices won't be brought down?'—a fair question. The professor of economics says, 'Kieran, I'm not sure precisely by what you mean by, "Have you done the modelling?"' Kieran Gilbert, anxious to reassure the rather confused professor, said, 'Have you done economic modelling to suggest that existing house prices won't fall as a result of your policy?'—a straight, simple question. 'So if your question is,' says the professor, 'have we looked carefully at what all the studies suggest about the impacts on supply and demand, yes, absolutely.' 'So,' says Kieran Gilbert, 'no, you haven't done the modelling specifically on house prices,' to which the professor replies, 'Kieran, I think we're having a debate about what constitutes economic modelling.' I do not think we are having a debate about it at all. It is perfectly clear: you take more than one-third of the buyers out of the residential market, and prices will come down. How can that be otherwise? In the fantasy land of the Labor Party, you cut the buyers pool by one-third and prices remain unaltered. Perhaps they are hankering for a centrally planned economy where house prices are set by the government and cannot be deviated from.

But the fact is their changes to negative gearing have been very, very poorly thought through. They will cause house prices to fall. Every Australian who thinks about it for a moment knows that. They know yet again the Labor Party has shown it cannot manage the economy, it does not understand markets, it is a threat to residential housing values and it is a threat to the economy.

Ms Butler interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Griffith will cease interjecting.