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

My question is to the Assistant Treasurer. Does the Assistant Treasurer stand by her remarks this morning, and I quote, about Labor's negative gearing reforms:

They have got a policy that is going to increase the cost of housing for all Australians, …

Really? All Australians?

Kelly O'Dwyer (Higgins, Liberal Party, Minister for Small Business) Share this | Link to this | Hansard source

Thank you very much for that question. I really relish the opportunity to have the chance to talk about Labor's policy to scrap negative gearing for established homes and, instead, limit it only to new housing, which will have very serious ramifications for homeowners, for small businesses, for renters and for the broader Australian economy.

It is a policy that has not been thought through, which is why the Australian Labor Party has resorted to these childish games—to try to distract the Australian people from properly examining what it is that they propose to do and its impacts. It is very clear that from July 2017, those opposite would remove around one-third of all buyers of established property. This would have a very significant impact on demand, and we know that in the property market when you reduce the demand prices fall.

Under the same policy, those buyers who are looking to invest and to negatively gear will be forced into new property. This has the impact of increasing demand for new property, and when you increase demand for new property you will push up prices.

It seems that those opposite find it very difficult to understand these pretty obvious concepts. They have a chaotic policy. It is one that will damage confidence, it is one that will damage growth and it will send shockwaves through the property market—a market worth over $5.6 trillion.

What those opposite forget is that Australians have their wealth tied up in that market. What they also forget is that so many small businesses will be affected. We have more than two million small businesses in Australia, and they employ more than 4.5 million Australians. Many of these small business owners and operators rely on their homes for their finance. Of the small businesses holding lending products, around 14 per cent have a mortgage over their property and these mortgages will be affected if housing prices fall.

What happens to those small businesses that employ people? What happens to the broader Australian economy if they cannot invest in their businesses? These are all questions that those opposite do not have the answer to. They would rather play childish games—word games—than look at and examine the policy that they are putting to the Australian people, one that will punish the Australian people, decrease their overall wealth and hurt the Australian economy.