Treasurer pans Labor plan to abolish negative gearing

reasurer Scott Morrison during Question Time at Parliament House at Parliament House in Canberra on Thursday, Feb. 11, 2016.
reasurer Scott Morrison during Question Time at Parliament House at Parliament House in Canberra on Thursday, Feb. 11, 2016. AAP Image - Mick Tsikas

TREASURER Scott Morrison has criticised a Labor plan to abolish negative gearing on established homes from July next year.

Labor leader Bill Shorten unveiled the Opposition's policy, which includes halving capital gains tax concessions.

The policy would mean property investors would not be able to claim losses on investments in established properties bought against their income from July 2017.

But properties bought before July next year would not be affected, while the current 50% CGT discount would be halved to 25 for properties held for more than 12 months, bought before July next year.

Parliamentary Budget Office modelling showed the changes would raise a combined $32 billion over the decade once in place, but only about $600 million in the first four years.

Mr Morrison wrote an opinion piece published in News Ltd papers on Sunday, saying the changes would "not even pay the interest bill on the debt Labor left us, let alone the higher spending they have planned".

Despite the government reportedly considering also changed negative gearing and CGT, it has not released any policy proposals for tax reform, after last week ditching a 15% GST.

Shadow Treasurer Chris Bowen said despite the low amount raised in the early years, Labor was targeting longer-term "structural changes" to improve the budget's bottom line.

He told ABC TV the budget needed "long-term repair, saying if Mr Morrison was going to get larger savings in the short term by hitting existing investors, "he should say so".

The Greens this week also wrote to Mr Morrison proposing superannuation and negative gearing reforms, but Mr Morrison has not yet accepted the invitation to negotiate with the minor party.

Topics:  negative gearing scott morrison tax

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