Turnbull called out on negative gearing comments
PRIME Minister Malcolm Turnbull has been challenged to a debate on housing tax policy by the author of a report he has claimed is "wrong".
The report from Grattan Institute economist John Daley showed the Federal Government could enjoy a $5.3 billion tax windfall by cutting negative gearing and halving capital gains tax discounts.
The PM took to his personal blog on Tuesday to claim the report was based on incorrect assumptions and estimates, labelling it "wrong".
But on ABC TV that night, he admitted the government had no modelling to back his claim that the changes would act as a "sledgehammer" to the property market.
He also said the fact that high-income earners received the biggest benefit from the tax breaks was "besides the point", as they tended to "have more property".
Mr Daley responded yesterday in an opinion piece in the Australian Financial Review, rebutting a series of Mr Turnbull's claims - including that the changes would result in higher rents.
"No study of the real world has ever found tax changes with this impact," he wrote. "Engaging in detailed argument ultimately leads to better policy. We look forward to the Prime Minister arguing back - and maybe even changing his mind."
The institute's report found the top 10% of Australian income earners received nearly half of the tax benefits of negative gearing. The same income bracket also received about a third of the benefits of the CGT discount.
The report called for negative gearing to be scrapped completely and the halving of the capital gains tax discount.
Those changes, if enacted, could lead to a 2% drop in average house prices, but would have little to no effect on the rental property market, the report said.
The Opposition has backed similar but smaller changes over the next two years.
Mr Turnbull outright rejected any change to either tax break on Sunday, a little over a week out from the election year Federal Budget.