NATALIE BARR:
Morning to you.
JOSH FRYDENBERG:
Good morning, Natalie.
NATALIE BARR:
Now, the tax office analysis shows it’s not just Coalition voters who would be affected by changes to negative gearing, a lot of Labor voters would be affected by this.
JOSH FRYDENBERG:
Well, that’s exactly right. Over 1.3 million people currently negative gear, they’ll all be affected, because when they sell their property, they will be selling their property into a market with fewer buyers.
Anybody who rents their home today will pay higher rents as a result of Labor’s policy and anyone who owns their home will see their property worth less.
And it’s not rich people who take advantage of the negative gearing rules that we currently have in place, but it is 58,000 teachers, 41,000 nurses, 20,000 police offices and emergency services personnel. These are people who may have one property and get the benefits from negative gearing and the capital gains tax discount.
NATALIE BARR:
So, there is a lot of dispute over this, it depends who you listen to, because property groups say changing negative gearing could trigger a recession, but senior economists say that’s just fearmongering.
JOSH FRYDENBERG:
Well, that’s not right. Actually, senior economists, whether it’s at Citigroup or Riskwise or CoreLogic or others, have all warned about the dangers of Labor’s policies and we have also seen the world’s leading credit rating agencies say that the Australian economy does depend on a stable property market and a major decrease in investor demand could hit the property market hard.
We have already seen, Natalie, prices come down over the last twelve months in major capital cities, whether it’s Brisbane, Sydney or Melbourne. And that’s a result of the prudential regulator taking action that is measured to ensure a smooth landing in the property sector.
But what Labor is going to do is take a sledgehammer to people’s housing prices, housing values. It is not good news at a time when the Australian economy is strong and it’s not good news at a time when the housing market is coming off its peaks to a more sustainable level.
NATALIE BARR:
Well, it does sound like there is a bit of a dispute because you’ve got the Master Builders Association saying there would be massive job losses and then you’ve got the head of Deutsche Bank saying there is no evidence that there’d be a drop in construction.
JOSH FRYDENBERG:
What the Deutsche Bank analysis was showing was the impact that it is currently having that people are expecting in terms of Labor’s policy to come. What the Master Builders have shown is that there is actually 42,000 fewer dwellings that will be built and 32,000 jobs that will be lost and it will be a $12 billion hit to the economy.
But again, it’s not just the Master Builders who are saying it’s problematic, you’ve also had the Property Council, you’ve also had some of these other leading economic groups say that Labor’s policy is designed to drive housing prices down.
That is what Bill Shorten tells you, that’s what Chris Bowen tells you. Unfortunately, his own frontbenchers can’t get on the same page because the Shadow Finance Minister says prices will go up as a result of the Labor Party’s policy. And Joel Fitzgibbon, another Labor frontbencher, says prices will neither go up nor down as a result of their policy.
So, Natalie, it’s a real shambles and it is going to hit every Australian household.
NATALIE BARR:
Okay, Josh Frydenberg, thanks for your time this morning.
JOSH FRYDENBERG:
Good to be with you.