According to a report in Fairfax media, a group of Liberal backbenchers has pushed back against plans by Prime Minister Malcolm Turnbull and Treasurer Scott Morrison to change the current arrangements for negative gearing on housing and are committed to seeing the status quo retained.
While the Federal Opposition has announced its position on negative gearing, with the Labor party promising to restrict the tax break to new housing only from 1 July 2017, the government has not publicly announced its position yet, though there is strong speculation it is considering a cap on the dollar amount that can be claimed each year via negative gearing.
Changes to the taxation arrangement have been proposed as a method to increase tax revenue, however an unnamed backbencher told Fairfax the group is concerned by their party’s current position.
"There is growing concern on the backbench about our position on negative gearing. We need to address the expenditure side of the budget instead," the backbencher said.
"This is about finding sensible changes that ensure that the attack on Labor's negative gearing policy isn't undermined."
If the Liberal party does decide to leave negative gearing unchanged, they won’t be alone in attacking the Labor party’s policy, with numerous lobby groups having come out in strident opposition to any changes.
Most vocal has been the Property Council of Australia, which this week launched a month-long media blitz against any changes.
PCA chief executive Ken Morrison said his group would be “negligent” if they didn’t voice their opposition to changes to negative gearing and said the tax break was vital to Australia’s housing industry and wider economy.
Almost two million Australians own an investment property and almost 1.2 million negative gear. This is an industry that is vital to our economy. 1.1 million Australians rely on property for their jobs and property generates one ninth of Australia’s GDP,” he said.
“Sudden lurches in policy are risky to an industry that is contributing so much to jobs and growth. Negative gearing is a vital part of the means by which Australians, from all walks of life, secure their financial future.”
