2015-06-10
Senator Scott Ludlam
Treasurer Joe Hockey's attempts to contribute to the debate on tax reform and housing affordability are… well. Let's just say we encourage him to continue offering free advice to people struggling to stay afloat in Australia's overheated housing market.
In bringing forward our proposal to abolish Negative Gearing, the Greens have sought to highlight the unfairness of tax concessions flowing to property investors at the expense of renters and first home buyers.
While most people have been willing to engage on the merits of the argument, Treasurer Hockey demonstrates the brazen sense of entitlement and elitist detachment from reality that makes the case for reform better than we ever could.
From the vantage point of a $350,000 a year taxpayer funded job and an impressive property portfolio, fresh from cutting half a billion dollars from Commonwealth housing affordability programs, who better than Joe Hockey to make the case for the status quo.
The only thing that could have improved the performance would have been a cigar.
When you take a closer look at Joe Hockey's budget cuts to affordable housing programs, worth $589.2 million, the real picture is less amusing:
- First Home Saver Accounts scheme saving $134 million over five years axed, making it harder for young people to save for their first home
- National Rental Affordability Scheme (NRAS) program including the remaining 12,000 new rental homes, worth $235.2 million
- $44 million capital funding from the National Partnership on Homeless to build new homelessness shelters and emergency accommodation
- $3 million homelessness research strategy funding
- A new program to sell off "surplus" commonwealth property with no criteria for affordable housing introduced
- Housing Help for Seniors pilot program worth $173 million axed — this program assisted seniors to downsize, which would have freed up larger family homes for young families to move into.
In addition, also axed have been:
- National Housing Supply Council
- Major Cities unit
- COAG Housing Reform Council (in charge of monitoring government's effectiveness in achieving housing affordability goals)
- Prime Minister's Council on Homelessness
- $21 million grants program for housing affordability solutions axed three days before Christmas
- National Peak bodies National Shelter, Homelessness Australia and Community Housing Federation of Australia axed three days before Christmas — leaving no voice or policy advice to government on housing affordability
DISCONNECTED
The Abbott Government's cruelty raised its head again in the 2015 budget, as they continue with efforts to deny income support to young jobseekers and make harmful university reforms. They also consolidated the cruel cuts they made in 2014, including $590 million in cuts to homelessness and housing affordability.
This inaction directly contradicted the recommendation of the Senate Inquiry into housing affordability, which reported in May and recommended for the reinstatement of a range of programs and measures cut in the 2014 budget.
This report was significant in that it clearly set out the fact that we have the tools at hand to deal with the housing affordability crisis.
This included a range of support mechanisms and an increased focus on the innovation potential of the prefabricated construction industry, which could support the affordable housing, construction, manufacturing and sustainable timber sectors.
Significantly, the committee also recommended that the government examine the costs and impacts of negative gearing, particularly on renters — another step the Government has blatantly ruled out.
This inaction, in the face of a clear crisis, shows how disconnected Tony Abbott and Joe Hockey are from the challenges being faced by people across the country when it comes to finding secure accommodation.
While the government ignores the problems and the ALP remains uncommitted to meaningful action, the Greens have set the agenda by launching a new initiative to reform negative gearing.
Our proposal will save the budget $2.9 billion over the forward estimates and direct much-needed funding to housing affordability and homelessness. Our plan will also open the property market up to new home buyers and low to middle income earners who are currently priced out of contention.
Property investment can be a secure financial option for many Australians, however we do not feel that investors who run properties at a loss should be subsidised by the tax-payer, which is currently costing us billions of dollars every year.
The biggest winners from negative gearing are the nation's highest income earners. More than half of individual taxpayers with negatively geared rental housing investments are in the top 10% of personal taxpayers, with 30% earning over $500,000. The tax benefit of negative gearing is 10 times more for the highest income earners than for the lowest.
The Parliamentary Budget Office (PBO) has provided costing for removing negative gearing for all asset classes, for assets purchased on or after 1 July 2015, with grandfathering arrangements for existing investments. The PBO estimated this proposal would be expected to increase revenue by almost $2.9 billion over the 2014-15 forward estimates.
Our plan will directly fund construction of 7000 new homes for the homeless by 2020 — enough to house every person currently sleeping rough or without adequate shelter. We will directly fund construction of 7500 new social housing dwellings over the forward estimates, taking more than 15,000 people off the waiting list in just the next four years.
With a deep budget deficit and critical problems in housing affordability and social housing, now is the time to be talking about negative gearing, but the government is refusing point-blank to even speak about this issue.
A wide range of groups from economists to the community sector have advocated for negative gearing reform, and now the Greens are taking action to drive this issue along.