2016-02-22
Senator LUDLAM (Western Australia—Co-Deputy Leader of the Australian Greens) (16:47): Sometimes it is good to go third in these debates so that you can hear the views of the opposition and the views of government senators. I thank Senator Moore for bringing this motion forward for consideration today. When Prime Minister Turnbull had rolled Mr Abbott out of the Prime Minister's office, his pitch to his own party room and to the people of Australia was really twofold. It was, 'We're doing very badly in the polls, and I will improve your standing in the news polls. Prime Minister Abbott cannot sell the economic message and that is something I will do.'
It is interesting, only a few short months later, to see how that is working out. The polls are not looking all that great, but—of much greater consequence—the government's economic message is just incoherent. With greatest respect to Senator Back, who I quite like personally, he did not shed a great deal of light on the government's economic message just then. Senator Bilyk, in her own way, has just put a proposition. We do not believe that the opposition's proposals on negative gearing go anywhere near far enough. I will explain why in a moment.
But it is, nonetheless, a recognition of the revenue that is available. Having bailed out and gone a bit weak at the knees at the idea of taxing every Australian on every purchase of every item through the GST—you have gone a bit cold on that idea—there are revenue measures available through things like negative gearing and, particularly, capital gains tax exemptions. For Senator Back, it appeared to have just gone completely over his head that that is what is on the table.
It is very interesting because I can recall through six years of the Rudd-Gillard governments that we could not get a peep out of the Labor Party on negative gearing. We could not find a pulse. We went after the Treasury department: 'No, we've not been asked to model it.' It was this extraordinary tight-lipped exchange at the time, where negative gearing was considered too politically dangerous to handle. Labor will say one thing in opposition and in government another, but credit where it is due: it is out in the open now and the debate is joint. They at least—
Senator Cameron: You'll never be in government with that.
Senator LUDLAM: Do not be so sure of that, Senator Cameron, because that smug attitude is what is costing you votes. Now that it is at least out in the open, I do want to acknowledge that the Labor Party has at least bitten the bullet—there is a negative gearing policy out there; there is a capital gains tax policy out there—which is more than we can say for the government. They are screaming about the loss of revenue and yet they are not interested in actually taking it on where it is available.
In the middle of last year, we had the Parliamentary Budget Office model what negative gearing concessions to wealthy property investors actually cost the economy. It is—in combination with capital gains tax exemptions, which is the sixth largest tax expenditure in our economy—$22 billion over the forward estimates. That is an incredible transfer of wealth; that is a subsidy to property investors.
I have been kind of amused to see the Property Council, one of the few voices left in the debate still hanging on to the idea that this intervention in the housing market is in the public interest, saying, 'It's all people on $80,000 a year or less.' It is remarkable. Yes, you can do that. When you have negatively geared a whole heap of your income out of existence so that it is invisible to the Australian Tax Office, you can actually get your taxable income down below $80,000 a year—you can get it to zero.
The Property Council does not mention that in their press release: all these people who negatively gear rental properties who have no income at all. What a remarkable miracle! Are these homeless people who are negatively gearing? No, it is not. It is people who have managed to take their taxable income down below these thresholds, and then the Property Council can go on in their press release about how it is doctors, teachers, plumbers and presumably homeless people who are all negatively gearing their seven investment properties. That is how ridiculous the debate has gotten. It is costing the economy $22 billion over the forward estimates. The debate should have been over when Malcolm Turnbull stood up the other day—
The ACTING DEPUTY PRESIDENT: Order! Senator Ludlam, it is 'Mr Turnbull' or 'the Prime Minister'.
Senator LUDLAM: Quite correct, Acting Deputy President. When Mr Turnbull, the Prime Minister of the Commonwealth of Australia, brazenly stood up the other day and said, 'It'll crash property prices if you take away these negative gearing and capital gains tax reforms.' I would have thought that, if you strip away the hysterical language, that should have been the end of the debate. When this so-called liberal said that this $22 billion intervention in the property market is there to help push prices up, he basically acknowledged that negative gearing and capital gains tax exemptions increase property prices. What kind of intervention in the market is that supposed to be, where these incentives are being subsidised by low-income taxpayers? That should have been the end of the debate, but at least it has started.