Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Brandis. I refer to comments this morning by his senior cabinet colleague, Ms O'Dwyer, who says that Labor's negative gearing reforms 'will increase the cost of housing for all Australians, for those people who own a home and for those who would like to get into the housing market.' Is Ms O'Dwyer correct?

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

Thank you, Senator Wong, for giving me the opportunity to address that issue. I am aware of Ms O'Dwyer's remarks during the course of an interview this morning. What Senator Wong has not referred to, and what I would like to acquaint the Senate with, is a statement subsequently issued by Ms O'Dwyer, in which she says:

I would like to explain my comments on Sunrise this morning about Labor’s reckless negative gearing policy.

The point I was making is that under Labor’s policy there will be increased demand for new property, pushing up prices for new property.

It is clear from Labor’s ill-considered policy that existing house prices will decline.

If opposition senators cared to look at the context of the questions Ms O'Dwyer was asked on Sunrise, it is as clear as day that Ms O'Dwyer was referring to new housing. She made that observation in the context of that reference to new housing. It is equally clear, and there has never been any doubt—you will not find an economist in this country who will gainsay the fact—that overall, as a result of Labor's negative gearing policy, the value of existing houses will fall sharply—as one would expect, if one takes up to one-third of investment out of the market.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I refer to the minister's assertion that it is 'as clear as day' that Ms O'Dwyer is referring to new housing. Can he explain, then, why she said that these reforms 'will increase the cost of housing for all Australians, for those people who own a home and for those who would like to get into the housing market.' Can the minister explain how 'those people who own a home' can possibly be a reference to new housing? (Time expired)

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

Senator Wong, because from the context of the discussion Ms O'Dwyer had with the journalist interviewing her it is plain that that is what she was talking about.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I also refer the minister to the Prime Minister's statement last week that Labor's negative gearing reforms will cause a decline in property prices. If the government's message is so incoherent that even cabinet ministers cannot follow it, how can the Australian people have any confidence in any economic plan the government pretends to have?

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

The only people who do not seem to be able to follow a very straightforward proposition are Labor Party shadow ministers and senators and Labor members of parliament. The fact is, as Senator Wong knows, that approximately one-third of the housing market represents investment, almost all of which is constituted by people engaging in the perfectly respectable practice of negative gearing—not people from the top end of town, by the way, but nurses and policemen and teachers; ordinary middle-class Australians who simply want to get ahead so they have taken advantage of the opportunity to acquire an asset and in doing so contribute that asset to the rental market. If you take out one-third of the market, of course existing property values will collapse. If you want to have an argument at the forthcoming election about whether the Labor Party will cut the baggage out of Australia's housing stock, bring it on. (Time expired)