BEN FORDHAM:
Treasurer, good afternoon.
JOSH FRYDENBERG:
Nice to be with you.
BEN FORDHAM:
From Labor’s point of view, it seemed like a good idea at the time because the property market was booming, but times have changed.
JOSH FRYDENBERG:
They certainly have. Prices have come down in the last 12 months across capital cities. In Sydney, they’ve come down about eight per cent and the loans have been tightened by the banks.
Now, Labor’s policy will make sure that people who own their home will see the value of their home be less, and fall, and if they rent their home, their rent will go up as a result of Labor’s policy. So, it’s exactly the worst time to smash the housing market.
BEN FORDHAM:
Just on this tax office data that shows that Labor seats in several states have the highest concentration of people who negatively gear their properties, well your opposite number, Chris Bowen is saying today, well it’s wrong to suggest that these voters would lose their ability to negatively gear because under their policy, people currently doing so won’t be affected.
JOSH FRYDENBERG:
Well, everybody who sells their home into the future, negative geared or not will be worse off because there will be less buyers in the market because the Labor Party is going to take away some of the tax incentives that they currently get.
But they’re not only abolishing negative gearing as we know it, they’re also doubling the capital gains tax that applies and that’s also going to hurt investments in new housing, which they say they will allow.
BEN FORDHAM:
Do you get the feeling they’re going to dump this or tweak it between now and the next election?
JOSH FRYDENBERG:
Well, they certainly should and that’s the advice of the economists. The rating agencies are concerned about a slump in investor demand in the housing market and we heard from the Master Builders Association that Labor’s policy will cost 32,000 jobs and see 42,000 fewer homes being built.
But Chris Bowen, just the other day, doubled down by saying the policy won’t change between now and the next election and he thinks now is the best time to implement it.
But I have to say to you, the Labor Party can’t get their lines right because Chris Bowen and Bill Shorten say that under their policy house prices will fall. Jim Chalmers, their Shadow Finance Minister, says under Labor’s policy, prices will rise and then you have Joel Fitzgibbon saying that prices won’t go up or down, they’ll stay the same. So it’s a complete shambles.
BEN FORDHAM:
Treasurer, thank you for your time.
JOSH FRYDENBERG:
Good to be with you.