At least one party is fighting the good fight. Greens leader, Richard Di Natale, today confirmed that it is willing to work with the Turnbull Government to usher in meaningful tax reforms, but it will not budge in its position that negative gearing must be quarantined for all new property investments. From The ABC:
Mr Bandt said the party was open to negotiation on superannuation, however they would not move from their position to remove negative gearing on all new properties.
That proposal would not include existing investments.
“In the future, you’ve got to ask yourself why is the Government making it harder for people to buy their first home, but giving scarce money to people to buy their second, third or fourth home?” Mr Bandt said.
“So we’ve proposed to the Government that they grandfather it, and over 10 years that could save the budget somewhere in the order of $40 billion.”
As noted this morning, the Greens have put forward two key property-related tax reforms, namely:
- The removal of negative gearing for assets (shares and property) purchased after a certain date, with existing investors grandfathered; and
- The removal of the capital gains tax (CGT) discount for all capital gains realised after a certain date. Individuals would instead be able to index their cost base by the consumer price index (CPI) so that tax is only applied to real capital gains.
The Parliamentary Budget Office has estimated that the Budget could save some $15.8 billion over the forward estimates by implementing these reforms. Moreover, quarantining negative gearing alone would save an estimated $40 billion over a decade.
The Turnbull Government has welcomed the Greens’ offer but is yet to take it up. I suggest it do so quick smart so that it can simultaneously deliver equitable Budget reform and wedge Labor, in the process handing itself this year’s election on a silver platter.
