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As the federal election draws closer, an industry lobby group for property investors has warned that the Labor Party’s proposed policy changes to negative gearing are hinged on insufficient economic modelling and broad assumptions.
Ben Kingsley, chairman of Property Investment Professionals of Australia (PIPA), said Labor’s negative gearing model is “dangerously misleading”, and that such major reform requires a comprehensive and detailed strategy.
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“Until there is real evidence to support such a policy, which industry experience tells us doesn’t exist, the opposition should be very careful about changing negative gearing and capital gains tax provisions,” he said.
“Our message is clear – $6.5 trillion worth of Australians’ wealth is tied up in property. That’s roughly three times that held in superannuation and equities. Don’t play with this unless you know what you’re doing.”
Mr Kingsley said the current negative gearing laws should not be changed in isolation, outside of a complete review of the nation’s taxation policy.
“Property investment plays an important role in supporting Australians in their pursuit to be self-sufficient retirees and reduce the burden on the public purse to support an ageing population,” he said.
“Moreover, the property market is a significant contributor to economic activity, providing one in four jobs in our economy.
“Labor’s proposed removal of negative gearing on established housing is a poorly informed policy that will drive property price reductions, increase rents, stifle new property construction rather than encourage it, and cause job losses. Is that a good policy?”
[Related: Former PM hits out at past negative gearing failure]
