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You can find the current article at its original source at http://www.theguardian.com/australia-news/2016/apr/26/malcolm-turnbull-hits-back-at-grattan-institute-over-negative-gearing
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| Malcolm Turnbull: it's beside the point that the rich earn more from property | |
| (about 9 hours later) | |
| The prime minister, Malcolm Turnbull, has used a blog post to criticise the Grattan Institute’s new report on negative gearing, saying it is “littered with factually incorrect statements” and its economic analysis “leaves a lot to be desired”. | The prime minister, Malcolm Turnbull, has used a blog post to criticise the Grattan Institute’s new report on negative gearing, saying it is “littered with factually incorrect statements” and its economic analysis “leaves a lot to be desired”. |
| In a post on his website, Turnbull says he has a great deal of respect for the Grattan Institute and its chief executive, John Daley, “but on this occasion they have it wrong”. | In a post on his website, Turnbull says he has a great deal of respect for the Grattan Institute and its chief executive, John Daley, “but on this occasion they have it wrong”. |
| The well-respected Grattan Institute released a report on Monday, Hot property: negative gearing and capital gains tax reform, arguing that the government’s dire warnings that rents will soar and property prices will crash if negative gearing and the capital gains tax discount are wound back are not supported by the facts. | The well-respected Grattan Institute released a report on Monday, Hot property: negative gearing and capital gains tax reform, arguing that the government’s dire warnings that rents will soar and property prices will crash if negative gearing and the capital gains tax discount are wound back are not supported by the facts. |
| It has raised the temperature of the already heated debate over housing investment policy, coming just one day after Turnbull promised not touch negative gearing in his May 3 budget. | It has raised the temperature of the already heated debate over housing investment policy, coming just one day after Turnbull promised not touch negative gearing in his May 3 budget. |
| Related: 'Broken' budget has lost billions of dollars in a few months, report finds | Related: 'Broken' budget has lost billions of dollars in a few months, report finds |
| The treasurer, Scott Morrison, also hit out against the report, which claims the government’s dire warnings about changes to negative gearing are wrong. | The treasurer, Scott Morrison, also hit out against the report, which claims the government’s dire warnings about changes to negative gearing are wrong. |
| Turnbull says current policy settings are helping “mum and dad investors” and that Labor’s policy – to restrict negative gearing to new housing and to cut the capital gains tax discount from 50% to 25% – would send rents soaring and property prices crashing. | Turnbull says current policy settings are helping “mum and dad investors” and that Labor’s policy – to restrict negative gearing to new housing and to cut the capital gains tax discount from 50% to 25% – would send rents soaring and property prices crashing. |
| The Grattan Institute report shows negative gearing largely benefits the wealthy, with the top 10% of income earners before rental deductions getting almost 50% of the tax benefits. | The Grattan Institute report shows negative gearing largely benefits the wealthy, with the top 10% of income earners before rental deductions getting almost 50% of the tax benefits. |
| It also shows the current regime allows investors to reduce and defer their personal income tax, at an annual cost of $11bn to taxpayers. | It also shows the current regime allows investors to reduce and defer their personal income tax, at an annual cost of $11bn to taxpayers. |
| It says the government could raise $5.3bn a year – with little effect on house prices or housing supply – if it cut the capital gains tax discount from 50% to 25% and limited negative gearing by preventing losses on passive investments from being written off against wage and salary income. | It says the government could raise $5.3bn a year – with little effect on house prices or housing supply – if it cut the capital gains tax discount from 50% to 25% and limited negative gearing by preventing losses on passive investments from being written off against wage and salary income. |
| It then explains why those changes would not hurt the economy like the government has been claiming. | It then explains why those changes would not hurt the economy like the government has been claiming. |
| “Our best estimate is that the changes we recommend might lead to property prices up to 2% lower than [they] otherwise [would be],” the report says. “There will be little impact on rents, or on the rate of new development, even in the long term.” | “Our best estimate is that the changes we recommend might lead to property prices up to 2% lower than [they] otherwise [would be],” the report says. “There will be little impact on rents, or on the rate of new development, even in the long term.” |
| The treasurer told the ABC on Tuesday that the report recommends hitting mum and dad investors with higher taxes. | The treasurer told the ABC on Tuesday that the report recommends hitting mum and dad investors with higher taxes. |
| Morrison then said the report actually confirms what that government has been saying – that changes to negative gearing and the capital gains tax discount would undermine the value of homes, would increase rents and would not help housing supply. | Morrison then said the report actually confirms what that government has been saying – that changes to negative gearing and the capital gains tax discount would undermine the value of homes, would increase rents and would not help housing supply. |
| Related: Government's negative gearing claims dismissed by Grattan Institute report | Related: Government's negative gearing claims dismissed by Grattan Institute report |
| He said the recommended changes were not needed anyway, because the Australian Prudential Regulation Authority introduced regulatory changes last year to the way banks can lend to investors, with those changes causing Sydney’s and Melbourne’s property markets to “moderate” over the last six months, which was a good thing. | He said the recommended changes were not needed anyway, because the Australian Prudential Regulation Authority introduced regulatory changes last year to the way banks can lend to investors, with those changes causing Sydney’s and Melbourne’s property markets to “moderate” over the last six months, which was a good thing. |
| “That was a responsible policy change, put in place by the banking regulator, which has taken the heat out of some of the investor side of the market, which has been good for everybody,” Morrison said. | “That was a responsible policy change, put in place by the banking regulator, which has taken the heat out of some of the investor side of the market, which has been good for everybody,” Morrison said. |
| The shadow treasurer, Chris Bowen, said the Grattan Institute report, though recommending slightly different policies to Labor, makes the case that change is needed in Australia’s housing investment policy. | The shadow treasurer, Chris Bowen, said the Grattan Institute report, though recommending slightly different policies to Labor, makes the case that change is needed in Australia’s housing investment policy. |
| “The Liberal party believes that the taxpayer should provide more support to property investors seeking their seventh property than to young Australians seeking to own their first home,” Bowen said. | “The Liberal party believes that the taxpayer should provide more support to property investors seeking their seventh property than to young Australians seeking to own their first home,” Bowen said. |
| “The Grattan Institute also points to the bleeding obvious, that reforming negative gearing will improve housing affordability for young first home buyers.” | “The Grattan Institute also points to the bleeding obvious, that reforming negative gearing will improve housing affordability for young first home buyers.” |