Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

My question is to the Prime Minister, and I refer to his earlier answers. Is it now the Prime Minister's position that, under Labor's reforms to negative gearing, housing prices will go up, housing prices will also go down and Australians are meant to be afraid of both?

Mr Dutton interjecting—

Mrs McNamara interjecting—

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

The Minister for Immigration and Border Protection will cease interjecting. The member for Dobell will cease interjecting.

Mr Husic interjecting—

The member for Chifley can now leave under 94(a). He had his final warning before.

The member for Chifley then left the chamber.

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

The Labor Party's policy, as I said earlier, is confused, chaotic and contradictory. What it seeks to do is to make existing housing—established houses, which are obviously the vast bulk of the housing stock—less valuable by removing from the demand, from the buyers, in excess of one-third of buyers. From 1 July 2017, no investor could safely buy residential property in Australia if the Labor government introduces its policy, because, as I said, even if the level of interest or the level of debt that they have incurred to purchase that property is relatively modest—

Mr Watts interjecting—

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

The member for Gellibrand is warned!

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

and the interest bill in the ordinary course of events is less than the rent—

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Not even Abbott would have tried that!

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

The member for Rankin is warned!

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

they run the risk that if, for whatever reason—the absence of the tenant, a big bill for repairs or some other misfortune—that property returns a loss in any given year, that loss will not be able to be offset against their other income. That is the consequence of Labor's policy.

Ms Henderson interjecting—

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

The member for Corangamite will cease interjecting.

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

It does not simply drive highly-leveraged investors out of the market.

Ms Chesters interjecting—

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

The member for Bendigo has been warned.

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

It drives all investors out of the market, other than those who are prepared to take the risk that a loss on the property cannot be offset against their other income, which would hardly be rational. That is calculated, it is designed, to reduce the value of every single home in Australia.

I ask honourable members to contemplate this. Let us contemplate a family whose mortgage is 70 per cent of the value of their home today. They look at the market. They see it is subdued. Yes, it has had a big run-up in Sydney, for example, but now it is jogging along a little bit below the rate of inflation. Labor comes along with this policy. Let us say house prices come down by 10 per cent. The honourable member for McMahon should well remember this, because in south-west Sydney prices came down, around the time of the GFC, by quite a bit more than that. But, if they come down by 10 per cent, that family have lost one-third of their net worth. And the honourable members opposite ask us to believe that that is not going to have any impact on their investment, on what they will spend.

Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

No-one believes you.

Ms O'Neil interjecting—

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

The Manager of Opposition Business and the member for Hotham!

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

We all know what will happen. The honourable member opposite, the member for Watson, who interrupts so frequently, owns two investment properties, both of which are geared. I do not know whether they are negatively geared or not. But he is very well aware of the economics of this matter. (Time expired)

Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of clarification. I thought I was the member for Watson in this chamber, so I do not know who he is talking about. It is completely wrong and made up.

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

The member for Watson has other forms of the House available.

Honourable members interjecting—

Ms O'Neil interjecting—

Mr Pasin interjecting—

Members will cease interjecting. The level of noise is getting far too high. It was too high yesterday. The member for Hotham and the member for Barker are now both warned.