The government’s campaign against Labor’s proposed changes to the negative gearing tax break is designed to distract Australians from its own shortcomings, Opposition Leader Bill Shorten claims.
But Treasurer Josh Frydenberg says it’s not just the government but a growing number of experts warning against the plan.
“The current government is pulling a sort of pea and thimble trick, where they want you to look over here at Labor’s future policies so as to take your attention from the fact that under the current government this economy is not working properly,” Mr Shorten told reporters in Brisbane on Thursday.
Labor wants to retain negative gearing only for newly-built homes – with the policy grandfathered so the changes won’t apply to existing investors – and make changes to capital gains tax.
Mr Shorten says it’s simply a “fairness measure”.
“I haven’t heard anyone explain to me how it is fair that a property investor can get their taxpayers to subsidise that person for their seventh house but a first home buyer, well, they get no help at all,” he said.
Mr Frydenberg says the there’s a growing list of independent economists and property analysts warning against the concept and most people who use negative gearing “are not rich”.
“Two in three people who negative gear have a taxable income less than $80,000,” he told AAP on Friday.
“It’s an inconvenient truth for Labor but the people they claim to represent are those who will be hurt by their plan.
“Bill Shorten has to listen to the warnings, admit he got this one wrong and ditch his big new property tax.”
Labor is yet to decide when it would enact the changes if it wins this year’s election, likely to be held in May.
That comes as house prices in Australia’s big cities are tipped to continue declining in 2019.
Dwelling prices dropped by 4.8 per cent nationally in 2018, according to CoreLogic data.
The opposition leader has also hit back at media stories accusing him of being “anti-business” and inciting “class warfare” in comments he made on Thursday.
Mr Shorten suggested Australian seafarers losing their jobs because BHP is “foreign flagging” ships – meaning registering them overseas – is evidence not everything is fine in Australia.
“For me, this is not a matter of class war,” he said.
“It’s a matter of being an independent nation, controlling our transport costs, making sure that we protect our environment and making sure that as an island nation we have ships.”