Business Daily Media

Men's Weekly

.

Housing affordability is at the centre of this election, yet two major reforms seem all but off-limits

  • Written by Matt Garrow, Editorial Web Developer

This federal election, both major parties have offered a “grab bag[1]” of policy fixes for Australia’s stubborn housing affordability crisis. But there are still two big policy elephants in the room, which neither side wants to touch.

The first is negative gearing[2]. This can apply to business losses relating to any investment. But in the context of housing, it allows property investors to claim annual losses incurred renting out an investment property as deductions against their taxable income.

Proponents argue this boosts the supply of rental housing by encouraging investment. Critics say it’s an unfair tax break that disproportionately benefits the wealthy while driving up house prices.

This situation has been controversial for a long time. The Hawke government tried to implement major reforms[3] in the 1980s but these were reversed soon afterwards.

The second “elephant”, which some economists argue “put a rocket under[4]” housing prices, is the 50% capital gains tax discount[5] for assets held for longer than a year. This was introduced by the Howard government at the turn of the millennium.

In 2019, the then Labor leader Bill Shorten learned the hard way[6] what can happen when you bring negative gearing and capital gains tax reform to an election as part of a “big target” platform. Yet these tax concessions remain highly contentious.

Whom do they benefit most? Are they behind the housing crisis? Is keeping them fair on the rest of us? We invited four experts to unpack this debate. Here are the elements they told us are most crucial:

References

  1. ^ grab bag (theconversation.com)
  2. ^ negative gearing (treasury.gov.au)
  3. ^ implement major reforms (theconversation.com)
  4. ^ put a rocket under (www.abc.net.au)
  5. ^ 50% capital gains tax discount (www.ato.gov.au)
  6. ^ learned the hard way (theconversation.com)

Authors: Matt Garrow, Editorial Web Developer

Read more https://theconversation.com/housing-affordability-is-at-the-centre-of-this-election-yet-two-major-reforms-seem-all-but-off-limits-241262

Minns Labor Government shutting down the Business Connect program

The NSW Opposition is concerned that the Labor government will shut down a support program that has assisted New South Wales businesses. In a media ...

Samsara Eco appoints Dr. Lars Kissau as General Manager for Asia

Australian biotech innovator Samsara Eco has announced the appointment of Dr Lars Kissau as its first General Manager of Asia. Based in Singapore...

From the first bounce to the final siren - small business lessons from the AFL Grand Final

The AFL Grand Final is one of the most anticipated days on the sporting calendar. This Saturday, the Geelong Cats and Brisbane Lions will battle i...

Australia’s top finance leaders recognised as CFO role expands

Amid surging regulatory demands and rapidly evolving industry, Australia’s most influential Chief Financial Officers will be honoured at the inaug...

Why outdated security leaves small businesses exposed to crime

Small and medium businesses in Australia are under increasing pressure to address security gaps that criminals readily exploit. An unlocked door, an...

Why it’s time telcos rethink location and put customer experience first

Maurice Zicman, Vice President - CX Strategy at TP in Australia unpacks why the telco industry must rethink old assumptions and focus on digital-f...