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

My question is to the Treasurer. The Productivity Commission has found that the government's interventions into the housing sector deliver a windfall gain for the banks and that up to half of this gain is paid for by taxpayers because of negative gearing. Why should Australians, including young Australians who are struggling to buy their first home, pay for an annual bonus of $½ billion to the banks because this government refuses to reform negative gearing?

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

I thank the member for the question. He perhaps should have given it to the member for Lilley, because this is what the member for Lilley said about negative gearing. He was asked by Jon Faine—my good friend and our good friend:

Why not adopt the measure to quarantine negative gearing losses offset against income from just that investment?

Treasurer Swan—that's the transcript:

Well, I've never accepted that view, and I think it would be disastrous in the current environment.

Mr Faine said:

Politically disastrous or economically disastrous?

Treasurer Swan said:

No, economically disastrous to do anything on negative gearing and indeed, that's what the—

Henry—

Review says.

The problem with the Labor Party is that they can never hold to one position on the economy at any time.

Opposition Members:

Opposition members interjecting—

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

They are saying it was nine years ago. Apparently housing affordability wasn't a problem nine years ago, Mr Speaker. I can tell you, anyone who sought to buy a house in Sydney in the last 50 years has known something about housing affordability. The Labor Party have held out this measure as something of a panacea. This government took action through the regulator over several years, but particularly last year, and that saw the growth in house prices in Sydney decelerate from 17 per cent to one per cent. That is the approach we took. The approach proposed by the shadow Treasurer is now, on top of that, to bring about negative gearing's abolition, and not only that but to increase capital gains tax by 50 per cent. He wants to do that on a house price now growing in Sydney at only one per cent. How far does the shadow Treasurer want the property prices of mum and dad homes to fall in this country as a result of their reckless policies?

But it goes further. He knows that his capital gains tax policy doesn't just apply to housing. They are going to increase the capital gains tax by 50 per cent on retail shops, on factories and on share transactions. At a time like this, when superannuants are worried about the impact of global share markets, the Labor Party is out there saying, 'I want to whack up a big, fat tax on people's share earnings.'

Mr Bowen interjecting—

Now, he blinks and he blusters. All I know about this shadow Treasurer and this Leader of the Opposition is that they couldn't find an economic compass between them.