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| Negative gearing report: financial services firm had vested interest, says Labor | |
| (35 minutes later) | |
| Labor has rubbished reports it was briefed about modelling that showed changes to negative gearing would have a detrimental impact on investment and the economy, saying the commissioners of the report had a vested interest. | Labor has rubbished reports it was briefed about modelling that showed changes to negative gearing would have a detrimental impact on investment and the economy, saying the commissioners of the report had a vested interest. |
| The Coalition seized on the BIS Shrapnel report when it was released in March. It used modelling to show that changing the existing policy of negative gearing would see a $19bn hit to the economy and would cause rents to jump. | The Coalition seized on the BIS Shrapnel report when it was released in March. It used modelling to show that changing the existing policy of negative gearing would see a $19bn hit to the economy and would cause rents to jump. |
| On Tuesday it was revealed Bongiorno and Partners, the financial services firm that commissioned the report, had approached the shadow treasurer Chris Bowen months before to express concerns about changing negative gearing. | On Tuesday it was revealed Bongiorno and Partners, the financial services firm that commissioned the report, had approached the shadow treasurer Chris Bowen months before to express concerns about changing negative gearing. |
| The resources minister, Josh Frydenberg, told Sky News Bowen should just admit he was briefed on the consequences of changing the long-held tax policy. | The resources minister, Josh Frydenberg, told Sky News Bowen should just admit he was briefed on the consequences of changing the long-held tax policy. |
| “It turns out this office was briefed on it. Seriously, this is the dog ate my homework excuse,” he said. | “It turns out this office was briefed on it. Seriously, this is the dog ate my homework excuse,” he said. |
| The prime minister, Malcolm Turnbull, told reporters Bowen has “serious questions to answer”. | The prime minister, Malcolm Turnbull, told reporters Bowen has “serious questions to answer”. |
| “Mr Bowen had that advice, it had been apparently commissioned by an accounting firm in Melbourne for the purpose of giving to the Labor party to inform their policy process. The question for Mr Bowen is: did he share that advice with the shadow cabinet? Did he tell Mr Shorten about it? Did they know they had economic modelling from a leading consulting firm which said that going down the road they were obviously contemplating at the time would be disastrous,” the prime minister said. | “Mr Bowen had that advice, it had been apparently commissioned by an accounting firm in Melbourne for the purpose of giving to the Labor party to inform their policy process. The question for Mr Bowen is: did he share that advice with the shadow cabinet? Did he tell Mr Shorten about it? Did they know they had economic modelling from a leading consulting firm which said that going down the road they were obviously contemplating at the time would be disastrous,” the prime minister said. |
| Bowen said he had met Tony Bongiorno, who heads the firm, before Labor released its policy, but noted the report commissioned by the firm modelled a number of impacts to negative gearing that are outside of Labor’s policy. | Bowen said he had met Tony Bongiorno, who heads the firm, before Labor released its policy, but noted the report commissioned by the firm modelled a number of impacts to negative gearing that are outside of Labor’s policy. |
| “The first time I was aware that he had actually paid for this report... was when I read it this morning. But this is not a report into Labor’s policy,” he told ABC Radio. “It models something completely different.” | “The first time I was aware that he had actually paid for this report... was when I read it this morning. But this is not a report into Labor’s policy,” he told ABC Radio. “It models something completely different.” |
| “It’s no surprise that someone who supports the existing negative gearing would make those arguments,” he said. | “It’s no surprise that someone who supports the existing negative gearing would make those arguments,” he said. |
| The meeting between Bowen and Bongiorno took place last year, well before Labor made its policy on negative gearing public, in February this year. | The meeting between Bowen and Bongiorno took place last year, well before Labor made its policy on negative gearing public, in February this year. |
| Turnbull said the report was intended to “inform” Labor’s policy before its policy direction was finalised. | Turnbull said the report was intended to “inform” Labor’s policy before its policy direction was finalised. |
| “Chris Bowen’s policies are absolutely calculated to put us into reverse,” the prime minister said. | “Chris Bowen’s policies are absolutely calculated to put us into reverse,” the prime minister said. |
| Morrison went one step further, saying Bowen chose to ignore findings relevant to Labor’s policy. | Morrison went one step further, saying Bowen chose to ignore findings relevant to Labor’s policy. |
| “It did model the removal of negative gearing for existing properties. It absolutely did that. The evidence and the work that was done in that report showed to the shadow treasurer the great risk of going down that path,” Morrison told reporters. | “It did model the removal of negative gearing for existing properties. It absolutely did that. The evidence and the work that was done in that report showed to the shadow treasurer the great risk of going down that path,” Morrison told reporters. |
| Labor wants to limit negative gearing to new properties, and halve capital gains concessions. | Labor wants to limit negative gearing to new properties, and halve capital gains concessions. |
| The Coalition has warned that limiting negative gearing would be disastrous for investors and would see the price of houses tank. | The Coalition has warned that limiting negative gearing would be disastrous for investors and would see the price of houses tank. |
| “The release by BIS Shrapnel – a very damming report into the impacts of Labor’s negative gearing policy – I think bears out what the government has been saying. It is going to hit growth, it is going to hit house prices, it’s going to force rents up – some 70,000 people forced into rental stress and it is going to require compensation potentially greater than what the revenue raises,” the treasurer, Scott Morrison, said in March. | “The release by BIS Shrapnel – a very damming report into the impacts of Labor’s negative gearing policy – I think bears out what the government has been saying. It is going to hit growth, it is going to hit house prices, it’s going to force rents up – some 70,000 people forced into rental stress and it is going to require compensation potentially greater than what the revenue raises,” the treasurer, Scott Morrison, said in March. |
| But BIS Shrapnel said the modelling undertaken went far beyond Labor’s negative gearing policy. | But BIS Shrapnel said the modelling undertaken went far beyond Labor’s negative gearing policy. |
| “The report was written over the last few months before Labor released its policy and it wasn’t directed at any particular policy,” associate director of the research company, Kim Hawtrey, said. | “The report was written over the last few months before Labor released its policy and it wasn’t directed at any particular policy,” associate director of the research company, Kim Hawtrey, said. |
| The Coalition has ruled out sweeping changes to the negative gearing system. | The Coalition has ruled out sweeping changes to the negative gearing system. |