That is other than changing negative gearing, abolishing tax breaks for superannuation, increases in the GST, income tax cuts, increasing capital gains tax and probate duties.
The question is: “What else is on the table?’ It’s beginning to look a bit like Old Mother Hubbard’s cupboard.
The Prime Minister and the Treaurer search for ideas on tax reform
Mr Turnbull went on to tell Labor’s Chris Bowen directly that the shadow treasurer’s place in Parliament would be at risk under the opposition’s changes. “I will leave the Member for McMahon with this sobering thought,” he said across the dispatch box. “There are nearly twice as many people in his electorate that are negatively geared as votes needed to change hands for him to lose his seat.
What Turnbull didn’t mention was how many people there are in the seat of McMahon who are potential first-time buyers. This group of people will benefit immensely by the removal of negative gearing and will probably vote for Labor.
Turnbull appears to be getting increasingly strident (and desperate) in recent weeks. His comment about the number of people who are negatively geared in Chris Bowen’s seat is a simplification that insults the intelligence of the Australian voter, something he promised he would not do when he was elected as party leader.
Turnbull also maintained that house prices will collapse if negative gearing is limited. This is probably nonsense. But it begs the question of whether we need to have house prices as high as they are and housing unaffordable for most first home buyers.
The only time that the value of your house is important to you is when you sell it. However, most people who sell their houses normally do so to buy another one. In this situation, the house you sell and the house you buy will both have increased in price. A more expensive house will have increased more in absolute dollar terms.
The other time when the value of the house is important is when you die and leave it to the kids. Chances are, that they would use the money to buy a new/another house.
The cheaper that houses are, the more money people will have to spend other things: the children’s education for instance, investment in a business or consumer spending. All of which stimulate the economy. The more money that is tied up in the housing market, the less money there is for economic stimulus (except when people invest in building new houses).