{"id":1325,"date":"2019-01-23T21:28:10","date_gmt":"2019-01-23T21:28:10","guid":{"rendered":"http:\/\/www.16news.com.au\/?p=1325"},"modified":"2019-01-23T21:28:10","modified_gmt":"2019-01-23T21:28:10","slug":"nsw-not-safe-as-houses","status":"publish","type":"post","link":"http:\/\/www.16news.com.au\/index.php\/2019\/01\/23\/nsw-not-safe-as-houses\/","title":{"rendered":"NSW NOT SAFE AS HOUSES"},"content":{"rendered":"

The Coalition government is due to return Australia to surplus from next financial year.
\nDespite the improving financial standing of the nation, the Labor Party proposes to hit the economy with $200 billion in new taxes.
\nLabor 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.
\nSmall businesses, typical \u201cmum and dad\u201d investors and the economy at large will suffer from this swag of unnecessary taxes.
\nOne of the worst new taxes is Labor\u2019s housing tax.
\nThe 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.
\nThis 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.
\nThere are three significant problems with this new tax.
\nFirstly, this will do nothing to boost housing affordability \u2013 indeed it will likely increase rents.
\nLabor\u2019s attack focuses on the evils of negative gearing exercised by \u201cproperty barons\u201d and have promised to improve housing affordability.
\nLabor says: \u201cthis 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\u201d
\nAny link between banning negative gearing and increasing affordability is totally confused.
\nHow would increasing housing taxes which reduces investment in housing create more homes?
\nWith 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.
\nCadence Economics\u2019 study for the Master Builders Association shows the housing tax will reduce supply of housing in Australia:
\n\u201cChanges 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.\u201d
\nMeanwhile according to housing market experts Corelogic Data, the prospect of misguided tax policies are already impacting the supply of new homes:
\n\u201cPotentially investor sentiment is being weighed down by the potential for changes to taxation policies related to housing should there be a change of government.\u201d
\nSecondly, Labor\u2019s housing tax is poorly targeted.
\nAustralians 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.
\n70 per cent of people using negative gearing have one property and have a net rental loss of less than $10,000.
\nTreasury 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.
\nBig wig investors will be able to use income derived from non-wage income such as investments in other houses or complicated investment schemes.
\nProperty tycoons win out whilst the nurses, teachers and police investors miss out.
\nThe Centre for Independent Studies has said: \u201cthe 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.\u201d
\nThirdly, it is unclear what the purpose of this policy is; and when it starts.
\nOn 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.
\nEven one of Labor\u2019s key budgetary advisers Bob Officer says \u201cWhat 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.\u201d
\nWhy would any political party want to reduce investment in housing?
\nIn reality, it is a populist exercise which has the illusion of smashing rich people when it simply reduces opportunities available to all working Australians.
\nSurely 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.
\nOn timing, Labor\u2019s official website says: \u00a0\u201cLabor will limit negative gearing to new housing from a yet-to-be-determined date after the next election.\u201d
\nNewspaper reports claim the Opposition Leader is \u201cunsure\u201d when the policy would start. Sound good? Only if you don\u2019t want to buy a house, rent a house or invest for the future.
\nAustralia is soon to be back in surplus and cannot afford amateur hour economic management.
\nAndrew Bragg is the Liberal Senate camdidate for NSW<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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 … Continue reading “NSW NOT SAFE AS HOUSES”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1325","post","type-post","status-publish","format-standard","hentry","category-nswnews"],"_links":{"self":[{"href":"http:\/\/www.16news.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.16news.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.16news.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.16news.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.16news.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=1325"}],"version-history":[{"count":0,"href":"http:\/\/www.16news.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1325\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.16news.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=1325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.16news.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=1325"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.16news.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=1325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}