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The Coalition government is due to return Australia to surplus from next financial year.
Despite the improving financial standing of the nation, the Labor Party proposes to hit the economy with $200 billion in new taxes.
Labor will turn Australia into a high tax paradise. There will be brand new taxes on houses, shares, superannuation funds, trusts and there will be higher personal income taxes for millions.
Small businesses, typical “mum and dad” investors and the economy at large will suffer from this swag of unnecessary taxes.
One of the worst new taxes is Labor’s housing tax.
The housing tax has two elements: (1) a ban on negative gearing on existing homes and (2) a reduction on the capital gains discount for assets held for more than one year from 50 to 25 per cent.
This proposal will end the practice of deducting investment costs (such as loan interest) against wage and salary income unless the investment is a new house. This overturns a fundamental principle that expenses are deductable for tax purposes.
There are three significant problems with this new tax.
Firstly, this will do nothing to boost housing affordability – indeed it will likely increase rents.
Labor’s attack focuses on the evils of negative gearing exercised by “property barons” and have promised to improve housing affordability.
Labor says: “this policy will see a boost in new housing and will provide young families with the chance to find a home, and will take pressure off inner city housing markets that are predominantly made up of existing dwellings”
Any link between banning negative gearing and increasing affordability is totally confused.
How would increasing housing taxes which reduces investment in housing create more homes?
With studies showing the policy will dry up investment into both new and existing houses, it is more likely we will end up with fewer houses which are worth less with higher rents.
Cadence Economics’ study for the Master Builders Association shows the housing tax will reduce supply of housing in Australia:
“Changes to limit negative gearing to new dwellings and reduce the CGT discount to 25% are estimated over the next five years to reduce new dwelling starts by between 10,000 and 42,000.”
Meanwhile according to housing market experts Corelogic Data, the prospect of misguided tax policies are already impacting the supply of new homes:
“Potentially investor sentiment is being weighed down by the potential for changes to taxation policies related to housing should there be a change of government.”
Secondly, Labor’s housing tax is poorly targeted.
Australians with more modest assets will suffer the worst consequences. The policy cancels the ability to deduct investment expenses against wages but not against non-wage income.
70 per cent of people using negative gearing have one property and have a net rental loss of less than $10,000.
Treasury says people earning less than $100,000 will be able to claim on average 28 per cent of their investment costs (unless they invest in new housing). Whereas people earning more than $109,000 will be able to keep claiming 86% of their investment costs in existing housing.
Big wig investors will be able to use income derived from non-wage income such as investments in other houses or complicated investment schemes.
Property tycoons win out whilst the nurses, teachers and police investors miss out.
The Centre for Independent Studies has said: “the proportional benefit of negative gearing is substantial at low income levels. This could include non-working spouses holding negatively geared property. Abolishing negative gearing will disproportionately hurt the lower income earners.”
Thirdly, it is unclear what the purpose of this policy is; and when it starts.
On purpose, despite the policy being likely to reduce housing supply and therefore affordability, its confused stated aim is to improve housing affordability by reducing investment.
Even one of Labor’s key budgetary advisers Bob Officer says “What is the social cost associated with home ownership or investment in housing? As a generality there is none. In fact, one could argue for a social benefit in that providing housing encourages better citizenship and social cohesion.”
Why would any political party want to reduce investment in housing?
In reality, it is a populist exercise which has the illusion of smashing rich people when it simply reduces opportunities available to all working Australians.
Surely now that Sydney and Melbourne house prices are falling by 9 and 6 per cent respectively, even Labor will not maintain the lie this policy will increase affordability.
On timing, Labor’s official website says:  “Labor will limit negative gearing to new housing from a yet-to-be-determined date after the next election.”
Newspaper reports claim the Opposition Leader is “unsure” when the policy would start. Sound good? Only if you don’t want to buy a house, rent a house or invest for the future.
Australia is soon to be back in surplus and cannot afford amateur hour economic management.
Andrew Bragg is the Liberal Senate camdidate for NSW

Beachgoers will be safer across the state, thanks to a major funding increase for Surf Life Saving NSW from the NSW Liberals & Nationals Government.
Premier Gladys Berejiklian and Minister for Emergency Services Troy Grant said Surf Life Saving NSW will receive an extra $16 million over four years for new jet skis and vehicles, additional emergency response beacons, community engagement officers and an innovative new beach wi-fi project to educate tourists.

“This investment is another major boost for Surf Life Saving NSW,” Ms Berejiklian said.

“Surf Life Saving NSW’s volunteers and staff do an amazing job keeping our beaches safe and this latest increase to their funding will enable them to save more lives.
“We have invested heavily to ensure that Surf Life Saving NSW and our volunteers have got all the tools and technology they need to do their jobs.”
Mr Grant said, “Our lifesavers do an outstanding job across our coastline each year, and the NSW Liberals & Nationals Government has been a very proud supporter of their efforts.”
“This funding would strengthen that support, and lead to new staff across a number of areas including East Ballina, Warriewood, Nowra, Tathra and Tighes Hill in the Hunter region.”
Community engagement staff work in the community and run programs to help educate people about beach safety.
Mr Grant said the investment announced today will also enable Surf Life Saving to improve safety at more remote locations.
“As part of the package, 10 new Emergency Response Beacons (ERBs) will be installed at coastal black spots to better protect swimmers,” Mr Grant said.
“This new technology has already been a great success, and allows beachgoers to access help in secluded, unpatrolled areas, with the beacon sending a quick alert to have support dispatched during emergencies when any time saved could mean a life saved too.”
Mr Grant said funds will also be allocated for an exciting beach wi-fi trial to better communicate with and educate swimmers, particularly international visitors.
“This will involve real-time safety alerts being issued to beachgoers’ digital devices within the red and yellow flags, translated into seven different languages,” Mr Grant said.
“These crucial updates could prevent drownings, especially for people who may not speak English and aren’t as familiar with the conditions.”
Surf Life Saving NSW CEO Steve Pearce welcomed the Government’s pledge and said it will also provide major operational support across the organisation’s 129 clubs.
“This would allow us to purchase more jet skis and the wetsuits, lifejackets and helmets needed to operate them safely, while also increasing our training efforts,” Mr Pearce said.
“More jet skis in the water, more emergency vehicles on the land, and more training for staff all equals better outcomes for coastal communities, and ultimately more lives saved.”
Today’s investment comes on top of strong support for Surf Life Saving NSW and water safety initiatives:

• Over the 3 years from 2016/17, the NSW Government has committed more than $9 million in water safety funding including:
  • $4 million over three years to enhance rescue capabilities, $220,000 of which ensured all Surf Life Saving branches had a new jet ski;
  • $1.7 million annually to provide essential lifesaving services; and,
  • $202,000 over three years for a pilot program to install emergency markers at key risk areas along the NSW coastline.
• $4 million to upgrade and build new Surf Life Saving Clubs – a doubling of the previous funding.
• Investments in new technology, such as drones, to assist lifeguards and prevent drownings.

Communities across Greater Sydney will benefit from having extra police on the beat, with 100 high visibility officers set to join the ranks as part of the NSW Government’s historic investment in frontline policing.
The NSW Liberals & Nationals Government is investing a record $583 million to deliver 1,500 extra police – the biggest single increase for the NSW Police Force in more than 30 years.
Premier Gladys Berejiklian, Minister for Police Troy Grant and NSW Acting Police Commissioner Gary Worboys announced today that 100 of these new officers will be deployed to high visibility foot patrols across NSW – including many in Sydney – ensuring that communities are even safer places to live and work.

“These new high visibility street teams will provide a reassuring presence right across our suburbs and play a vital role in disrupting and preventing crime and anti-social behaviour,” Ms Berejiklian said.

“The NSW Government is delivering record breaking frontline services for schools, hospitals and our emergency services. Our careful economic management is allowing us to deliver the improvements that will make a real difference for everyone in NSW.”
Along with providing high visibility foot patrols, the new officers announced today will also be deployed to major events, transport hubs and busy areas.
Mr Grant said the boost in resources would also give police greater capacity for ongoing local community and business engagement.
“They call it the thin blue line – but that’s hardly the case with more and more officers on our streets serving the community and proactively targeting crime,” Mr Grant said.
“Having this highly-visible deployment means police can gather more intelligence to tackle emerging crime trends head-on, and increase community confidence in local policing by addressing any concerns from retail owners, residents or other community members.
“The presence of more men and women in blue will also make criminals think twice before breaking the law. With more eyes on them, there’s more chance of being caught and charged by police.”
Acting Commissioner Worboys said modern policing is not just about making people safe, it’s also about making people feel safe.
“That’s why a highly-visible presence in our major city is so important,” Acting Commissioner Worboys said.
“We know New York, Paris and London have moved towards a highly-visible presence. It’s only natural the largest city and biggest economy in Australia would follow.”
The high visibility street teams will operate across five  NSW Police Force regions, with a large contingent of 40 extra police set to be deployed across the Central Metropolitan Region.
The officers will be specifically trained in intelligence gathering so they can proactively identify conflicts ranging from local level issues to the most serious indicators of violent extremism.
They will work closely with Police Area Commands and Districts across their respective regions while also complementing the work of specialist officers across the Force.
Along with today’s announcement, all 58 Police Area Commands and Police Districts will receive an Elder Abuse Prevention Officer and a Child Protection Register Officer.
A further 91 officers will be deployed to Region Enforcement Squads and Raptor Units to fight serious and organised crime.

More than 1000 medical graduates this week start their hospital ward rounds across NSW – the largest intake ever – as part of the Government’s internship program.
Premier Gladys Berejiklian and Health Minister Brad Hazzard said $107 million has been invested in the internship program to support 1021 junior medical positions.

“The new crop of interns is the next generation of talented professionals at the frontline of our health care system which is one of the best in the world,” Ms Berejiklian said.

“Thanks to this Government’s strong financial management, we can deliver record investment into to new hospitals as well as hospital staff. I am incredibly proud that the Liberals & Nationals Government has invested close to three-quarters of a billion dollars since 2011 to boost the internship program in NSW.
“Under Labor, the investment in the program was just $63 million in 2010. This year we will invest $107 million and offer 251 more places to interns than under Labor.
“Our health credentials are unmatched and this builds on the additional 16,000 frontline health workers we have already employed since coming to government , an increase of 23 per cent.”
Mr Hazzard said NSW offers more funding and internships than any other state or territory, and leads the nation in efforts to improve the wellbeing of young doctors.
“A lot of work has been done over the past 18 months since we held the JMO forum about how we can better support our junior medical officers,” Mr Hazzard said.
“Change will take time as we are turning around a cultural way of thinking prevalent in the profession worldwide but we are committed to supporting those who support us.
During their first year, graduates will complete compulsory terms in the specialties of medicine, surgery and emergency. The second year focuses on consolidating professional practice and experience in different clinical settings. The interns will rotate through a network of metropolitan, regional or rural hospitals, as well as GP practices.