Bill Shorten (Maribyrnong, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. Today the Treasurer has continually staked his credibility on the credibility of the BIS Shrapnel report. Is the Prime Minister aware that respected economist John Daley of the Grattan Institute has rejected that same report, saying:

Voters should be asking themselves whether a responsible government would rely on this sort of nonsense in a public policy debate.

Is this morning's farcical performance from the Treasurer what the Prime Minister meant when he promised to respect the intelligence of the Australian people?

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

I thank the opposition leader for his question. As honourable members are aware, more than 65 per cent of Australian households' net worth is in residential real estate. The family home is the largest single asset class in Australia. It is about $5.6 trillion, nearly three times the size of the total amount held in superannuation. ABS data shows that investors account for about 37 per cent of new lending for housing. Labor's policy would mean that a significant number of these investors would withdraw from the market for existing houses. It would push down existing house prices. It would result in a reduction of the amount of property available for tenants to rent.

The honourable members opposite have gone much further than simply dealing with housing affordability. They have a policy document, which I have a copy of here, which says, 'Positive plan to help housing affordability'. There has been a lot of discussion about negative gearing as it relates to existing residential properties. What honourable members may not be aware of is that the opposition proposes to eliminate negative gearing in respect of shares and any other assets. They will limit negative gearing only to new residential properties.

That would mean that if a wage earner decided to go into partnership with a friend and buy a truck, borrowed money to pay for that truck, operated that trucking business and that trucking business ran at a loss, they would not be able to offset those losses against their ordinary income. It means that if a person set out to borrow money to buy shares—it might be shares in a private company that is operating a business—and if that did not generate the returns they expected and their investment lost money, they would not be able to offset that against their wage or salary income.

In addition to that, of course, the Labor policy reduces the discount for capital gains tax. It adds 50 per cent to capital gains tax. The honourable members opposite are right that the BIS Shrapnel report did not take into account those matters. The Labor policy is so much more extreme, so much worse than that contemplated by BIS Shrapnel. No-one could have imagined such a reckless assault on Australians' economic freedom as this. (Time expired)

Ms Plibersek interjecting—

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

The member for Sydney will cease interjecting.