Young people see the housing market as being stacked against them, Australia’s housing minister says, as the Greens call for drastic changes to property tax concessions.
Clare O’Neil continues to play a straight bat to suggestions the government is considering scaling back the capital gains discount and negative gearing arrangements for property, but says there is a lot more work to do to address the housing challenge.
Official data released on Tuesday showed dwelling approvals fell for a second straight month in January, further setting back the government’s national housing accord target of 1.2 million new homes in five years.
Getting more homes built was the government’s main focus to alleviate affordability, but when asked whether scaling back tax concessions would help, Ms O’Neil wouldn’t shut the door.
It was absolutely clear that the housing burden was falling unfairly on younger Australians, she said.
“Our tax policies haven’t changed and nor have our housing policies,” Ms O’Neil told reporters in Canberra.
“Our government absolutely sees housing as a core part of the generational challenge that faces our country.”
Treasury is reportedly leaning towards slashing the 50 per cent capital gains tax discount, which economists, think tanks and crossbench MPs argue is overly generous and turbocharging house prices, to 33 per cent on investment properties.
With the coalition already ruling themselves out of negotiations, Labor will need the Greens on board to get any changes through parliament.
Greens economics spokesman Nick McKim, who is leading a Senate inquiry into the impact of the capital gains tax discount of housing prices, said the government should use its large parliamentary majority to go even further.
“The capital gains discount … should be removed entirely and it should not be grandfathered in,” he said, citing comments by former Reserve Bank governor Bernie Fraser.
Senator McKim said there was a “very strong consensus across economists and experts” that the government should not exempt existing properties.
Opposition housing spokesman Andrew Bragg said the government was toying with changes to the discount and negative gearing to fix its broken budget.
“Higher taxes on housing will not lead to more houses – it makes no sense,” he said.
“If anything, it will cut supply and push up rents.”
Labor was only making the housing crisis worse, Senator Bragg said, pointing to falling dwelling approval figures.
Dwelling approvals fell 7.2 per cent in January, according to the Australian Bureau of Statistics, driven by a 25 per cent dip in apartments and townhouses.
The result was below economist expectations for a five per cent rise, but the dataset is notoriously volatile.
Economists tend to focus more on the trend rate, which has risen moderately over the past year but has levelled off in recent months.
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