Speech in Parliament on negative gearing

2.42pm | March 01, 2016

The Prime Minister was asked yesterday if he had a recommendation for young people who could not afford to buy a home. His response had 351 words but not a single recommendation. This, of course, is just one recommendation less than Mr Hockey, who once unhelpfully suggested that young people should just get a better job—in an economy over which the coalition has presided which has the highest unemployment rate in years. This kind of response is typical of the government's approach to tax more generally, as evidenced in the answers provided to questions on notice today—lots of wasted words but no ideas.

It has become apparent that the Liberal Party have absolutely no idea what they stand for on tax. Is there a problem with negative gearing, and what would that problem be? The Treasurer believes that there are 'excesses' of negative gearing in the current system, yet Senator Back, our colleague in this place, this morning on ABC radio said:

I don't see any reason at all to change the negative gearing processes …

We heard from the Minister for Finance that the government continues to work on plans to make the tax system more growth friendly. It is absolutely extraordinary; he refused in this debate to allow Senator Wong to table the Hansard in which the minister in the House of Representatives referred to those excesses. It is bad enough that, as has become apparent, in this government the left hand does not know what the right hand is doing, but in this place we have now seen evidence that they do not want to know what the right hand is doing. They certainly do not want evidence of what is happening in the House of Representatives tabled in this place for the information of senators.

On another question, will reforming negative gearing affect housing prices? The Assistant Treasurer has said that it is:

… a policy that is going to increase the cost of housing for all Australians—for those people who currently own a home and for those people who would like to get into the housing market through their negative gearing policy.

In contrast, the Prime Minister says it would 'smash' the residential housing market. The Minister representing the Prime Minister said today:

… the value of most Australians' homes would collapse.

Where is the evidence for any of these competing assertions? There is absolutely none. We might have had some evidence or some analysis on the table to allow the Australian people to have a conversation about this, had we had a tax white paper, but the promised tax white paper has not eventuated, and there is absolutely nothing on the table that would allow the Australian people to assess the propositions which are so confusingly being debated by those opposite amongst themselves.

Is there any intention to reform capital gains tax? Back in 2005, the now Prime Minister said that the capital gains tax discount was fuelling an 'asset bubble in residential real estate'. In question time on Monday, he said:

… increasing capital gains tax is no part of our thinking whatsoever.

Today he said the comment only referred to the capital gains tax discount where it applies to individuals.

When the Liberals talked about having a national debate, it seems that they just meant having the Prime Minister and his inconsistent positions debate themselves, having the ministers debate themselves and having the backbench debate the frontbench. It seems that the government has completely abandoned the idea of a national conversation on taxation. I was surprised that Senator Brandis brought it up today, because I would have thought that he would have been too embarrassed to even raise this idea.

We are seeing anything but grown-up government. We are seeing anything but a serious policy conversation in which the Australian people could meaningfully participate. It seems that when the Prime Minister was talking about being agile he actually meant being really quick at avoiding any chance to make a decision on policy, and when he was talking about being disruptive he was actually talking about the coalition backbench.

The only party that is having a sensible, serious, mature policy conversation about taxation in this country is the Labor Party. Last year we outlined costed, detailed plans to reform taxation on superannuation. We outlined our plans on negative gearing and capital gains tax earlier this year. But this government, after 2½ years in office, with all the resources of the Treasury and with all the resources of the Department of the Prime Minister and Cabinet—with all the resources of the entire bureaucracy—cannot get a policy announced.