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Turnbull says housing undersupply, and not negative gearing, to blame for crisis Turnbull says housing undersupply, not negative gearing, to blame for crisis
(about 2 hours later)
Malcolm Turnbull has hosed down the prospect of revisiting negative gearing tax deductions, and says increasing supply will fix the housing affordability crisis in big capital cities.Malcolm Turnbull has hosed down the prospect of revisiting negative gearing tax deductions, and says increasing supply will fix the housing affordability crisis in big capital cities.
Turnbull made the comments during a wide-ranging interview on 3AW, in which he revealed that Donald Trump had invited him to Washington and also discussed his priorities for 2017, including company tax cuts and childcare.Turnbull made the comments during a wide-ranging interview on 3AW, in which he revealed that Donald Trump had invited him to Washington and also discussed his priorities for 2017, including company tax cuts and childcare.
On Friday, the Australian reported that the Liberal MP John Alexander, who chaired a government inquiry into home ownership, had suggested negative gearing be reined in by changing the rate of deductibility allowed for new investors in response­ to market conditions.On Friday, the Australian reported that the Liberal MP John Alexander, who chaired a government inquiry into home ownership, had suggested negative gearing be reined in by changing the rate of deductibility allowed for new investors in response­ to market conditions.
The Liberal MP Andrew Hastie also called for negative gearing to be reconsidered, and suggested that home owners be allowed to deduct the cost of their mortgages, an idea criticised last week by housing economics experts.The Liberal MP Andrew Hastie also called for negative gearing to be reconsidered, and suggested that home owners be allowed to deduct the cost of their mortgages, an idea criticised last week by housing economics experts.
Responding to reports that the median house price now topped $1.1m in Sydney and $770,000 in Melbourne, Turnbull said people “particularly on the left” tended to overlook that “the reason housing affordability has deteriorated is demand has consistently exceeded supply”.Responding to reports that the median house price now topped $1.1m in Sydney and $770,000 in Melbourne, Turnbull said people “particularly on the left” tended to overlook that “the reason housing affordability has deteriorated is demand has consistently exceeded supply”.
“We have not been building enough dwellings,” he said, summarising the problem without any reference to increased demand for houses from investors.“We have not been building enough dwellings,” he said, summarising the problem without any reference to increased demand for houses from investors.
Asked if the government would look at negative gearing again, he replied: “We have looked at it.”Asked if the government would look at negative gearing again, he replied: “We have looked at it.”
He said “the vast majority” of Australians claiming the tax deduction were on middle incomes and there were “vastly more teachers and police doing this than high-flying lawyers and tax accountants”.He said “the vast majority” of Australians claiming the tax deduction were on middle incomes and there were “vastly more teachers and police doing this than high-flying lawyers and tax accountants”.
Although many Australians on middle incomes do negatively gear property, the ability to claim the deduction on multiple investment properties means the deduction significantly benefits the wealthy.Although many Australians on middle incomes do negatively gear property, the ability to claim the deduction on multiple investment properties means the deduction significantly benefits the wealthy.
Turnbull said the federal government encouraged an increased supply of housing with “city deals” tying infrastructure funds to rezoning, and held out hope that the new premier of New South Wales, Gladys Berejiklian, would move to increase supply.Turnbull said the federal government encouraged an increased supply of housing with “city deals” tying infrastructure funds to rezoning, and held out hope that the new premier of New South Wales, Gladys Berejiklian, would move to increase supply.
Asked about the effect of Trump’s policies on Australia, including the possibility he would tear up the US-Australia refugee resettlement deal, Turnbull said the government had a “very direct and engaged” relationship with the new US administration.Asked about the effect of Trump’s policies on Australia, including the possibility he would tear up the US-Australia refugee resettlement deal, Turnbull said the government had a “very direct and engaged” relationship with the new US administration.
He acknowledged that new administrations brought “new policies” with them, but did not specifically address the fate of the refugee deal.He acknowledged that new administrations brought “new policies” with them, but did not specifically address the fate of the refugee deal.
“He’s certainly invited me to visit him in Washington and I look forward to doing that ... in the course of the year.”“He’s certainly invited me to visit him in Washington and I look forward to doing that ... in the course of the year.”
Asked about Trump’s statements on torture, Turnbull said Australia abided by its international obligations and did not “practise or countenance” the use of torture.Asked about Trump’s statements on torture, Turnbull said Australia abided by its international obligations and did not “practise or countenance” the use of torture.
The prime minister said Trump had affirmed the United States’ commitment to the Asia-Pacific region and “everything he has done since becoming president is consistent with that”.The prime minister said Trump had affirmed the United States’ commitment to the Asia-Pacific region and “everything he has done since becoming president is consistent with that”.
Speaking about the Melbourne car attack in which five people died, Turnbull said the “murderous assault in Bourke Street” had shown that Melbourne had a vulnerability to people driving vehicles in crowded outdoor spaces.Speaking about the Melbourne car attack in which five people died, Turnbull said the “murderous assault in Bourke Street” had shown that Melbourne had a vulnerability to people driving vehicles in crowded outdoor spaces.
He referred to the driver as a “criminal”, but when prompted by the host Neil Mitchell that the man was only “accused” at this stage, the prime minister hastily added the qualification that the driver was “alleged to have done this”.He referred to the driver as a “criminal”, but when prompted by the host Neil Mitchell that the man was only “accused” at this stage, the prime minister hastily added the qualification that the driver was “alleged to have done this”.
Turnbull said his counter-terrorism coordinator, the Victorian premier and the lord mayor of Melbourne were working to address the vulnerability and agreed that more bollards were needed to protect people in open spaces.Turnbull said his counter-terrorism coordinator, the Victorian premier and the lord mayor of Melbourne were working to address the vulnerability and agreed that more bollards were needed to protect people in open spaces.
He also said Australians’ standard of living was “at risk” if the country did not improve its competitiveness by lowering the company tax rate.He also said Australians’ standard of living was “at risk” if the country did not improve its competitiveness by lowering the company tax rate.
The government would introduce legislation to reduce company tax from 30% to 25% over 10 years, as it promised at the 2016 election, Turnbull said, and called on Labor, the Nick Xenophon Team and other crossbench parties to support the entire package.The government would introduce legislation to reduce company tax from 30% to 25% over 10 years, as it promised at the 2016 election, Turnbull said, and called on Labor, the Nick Xenophon Team and other crossbench parties to support the entire package.
NXT supports the company tax cut for businesses with a turnover of $10m or less, meaning a vital early question for the Turnbull government will be whether it can gain support for the whole package or will move to pass the company tax cut in stages.NXT supports the company tax cut for businesses with a turnover of $10m or less, meaning a vital early question for the Turnbull government will be whether it can gain support for the whole package or will move to pass the company tax cut in stages.
The prime minister also called for the crossbench to pass the family tax benefit cuts to pay for the government’s childcare package.The prime minister also called for the crossbench to pass the family tax benefit cuts to pay for the government’s childcare package.
He said the federal government would abide by the independent Fair Work Commission’s decision on Sunday penalty rates, whether it decided to lower or retain them.He said the federal government would abide by the independent Fair Work Commission’s decision on Sunday penalty rates, whether it decided to lower or retain them.
He accused the opposition leader, Bill Shorten, of having “no credibility” on the issue because of workplace deals by the Australian Workers Union trading away penalty rates when Shorten was a union leader.He accused the opposition leader, Bill Shorten, of having “no credibility” on the issue because of workplace deals by the Australian Workers Union trading away penalty rates when Shorten was a union leader.