Parliament’s lower house economics committee made no recommendations in a 55-page report released last Friday—despite receiving 65 submissions, hearing evidence from 68 witnesses, and holding seven public hearings since the inquiry was launched in April 2015.
The committee found that many parts of Australia, aside from Sydney and Melbourne, have relatively weak housing markets, and that policy should focus primarily on boosting supply in under-supplied markets.
Moreover, the committee ruled out support for any tax rises aimed at property investors, including Labor’s proposal to limit negative gearing and discounts on capital gains tax.
“Increasing rates of tax on property investment would have a negative impact on the economy,” said Liberal chair David Coleman. He noted that APRA had already moved to limit the rate of borrowing by investors and had the ability to take further action if needed.
The Labor party said it was “incredible” that the committee’s report contained no policy suggestions. “The government’s [members’] report perfectly reflects the Turnbull government’s economic plan - there isn’t one,” shadow treasurer Chris Bowen said in an official statement.
In a dissenting report, Labor once again pushed for negative gearing to be limited to new housing from 1 July 2017 onwards. The opposition also recommended that the capital gains discount for all properties bought after that date be halved from 50% to 25%.
The opposition claims the policy will initiate a boost in new housing, provide young families with the chance to purchase homes, and take pressure off inner-city housing markets that are predominantly made up of existing dwellings.
Meanwhile, the Greens propose phasing out the discount on capital gains tax entirely by 2020, as well as the removal of negative gearing for all non-business assets purchased on or after 1 July next year.
“Young people are getting screwed,” Greens MP Adam Bandt said in a statement. “The government refuses to admit there’s a problem, let alone take any steps to make housing more affordable.”
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