‘That’s the problem here’: PM pushes back on negative gearing reform in interview with Nat Barr

Economists warn that reforms to negative gearing could put modest downward pressure on housing prices in a boost for first home buyers.

Negative gearing policies allow property investors to claim tax deductions for owning and maintaining their investment properties, if those costs exceed the rental income they earn from them.

Some experts believe that reducing the incentives for investors could reduce home prices by 2 to 4 per cent in the medium term if negative gearing reforms are combined with capital gains tax changes.

But the flipside is that increasing taxes on property investors could deter investment in new apartments and homes ensuring that the undersupply of houses that is driving soaring rents only gets worse.

Sunrise host Nat Barr grilled the PM on the negative gearing thought bubble this morning after it emerged Treasury bureaucrats were taking another look at the idea.

“Well, when it has been looked at, Nat, it’s been shown that it won’t assist supply, and that’s the problem here,’’ Mr Albanese replied.

Nat Barr grilled Anthony Albanese over potential changes to negative gearing. Picture: Sunrise

Sunrise host Nat Barr then asked, “If you’re heading for a minority government, is this one way of helping you get in with the Greens?.”

“No, I’m not slightly interested in the Greens’ approach. Because they’re just blockers, not builders,’’ Mr Albanese replied.

Mr Albanese’s media blitz this morning included plenty of pushing back on the idea that negative gearing reform was on the election agenda.

“For many people, of course, if you didn’t have investment in housing, you wouldn’t have private rentals, you would have less supply and less construction is the concern which is there,’’ Mr Albanese said.

“Our Build to Rent scheme, for example, which will provide incentives through the tax system for more construction of housing, is being blocked in the Senate.”

The push to consider negative gearing reforms is even being backed by a small group of Coalition MPs, but the Prime Minister pushed back at the idea this morning insisting the real problem was supply, not negative gearing.

“Look, my view is that the key to housing policy is supply,’’ he said.

The Prime Minister denied that his government were considering taking negative gearing and capital gains tax reform to the next election. Picture: NewsWire / Martin Ollman

“And the issue of negative gearing is one of supply. Will it add to supply or will it decrease supply? The figures and research that has been produced by organisations like the Property Council indicate that it would reduce supply and therefore not contribute to solving the issue. And that’s the issue.

“We just want to get on with our plan of building more homes in the Homes for Australia plan. It’s a serious objective that we have. And the Greens should vote for something that is their own policy, by the way. It shows how opportunistic they are, the fact that they’re voting against their own policy.”

Asked if he was considering taking negative gearing reform and capital gains tax reform to the next election, Mr Albanese denied this was the case.

“No, we’re not. What we’re doing is planning for our Homes for Australia policy,’’ he said.

“That’s the policy that we have. And that’s what my Government has focused on.”

But the Prime Minister dodged questions over whether his “no plans” mantra to change negative gearing or capital gains tax exemptions was using the same language he used prior to changing the legislated stage three tax cuts.

“What we did with our income tax changes was deliver a tax cut for every Australian,” the Prime Minister told Sky News.

Mr Albanese was then challenged on whether he had “lied” or been “deceptive” with his language on stage three tax cuts.

“Well, if I did so did Peter Dutton because they voted for it,” he said.