Prime Minister Malcolm Turnbull has decided to rule out changes to negative gearing in the May budget. Today, Turnbull will be announcing that negative gearing laws won’t change the budget.
Following Turnbull’s decision, home ownership and household wealth will become essential election battleground.
“Driving down the value of most Australians’ most important asset, their home, is hardly a strategy for economic growth and more and better jobs.” Turnbull said.
The PM’s decision follows a plan from Labor. The plan would prohibit negative gearing to new houses and grandfather existing investments from next year.
Employment Minister Michaelia Cash confirmed that the decision they have made is a determination. The decision, according to her, is based on where the housing market is in Australia at the moment.
“We will be making no changes to negative gearing.” Cash Said.
“We are going to back the Australian people every step of the way and not impose a tax.”
Turnbull will officially declare that there will be no changes to any side of the policy. This decision was taken after Treasurer Scott Morrison hinted that there could be changes, at one point earlier this year.
However, there have been criticisms. Labor’s finance spokesman Tony Burke said that the Prime Minister was representing a “fear campaign.”
He believes that the government was protecting tax concessions for the well to do. On the other hand it was curtailing expenditure for schools and health.
According to ABC News, he said that the housing market contains an array of upwards and downwards pressures in it. And no economists have been out there, actually supporting Turnbull’s decision.
Burke has accused the Prime Minister of making another policy back flip, says The Sydney Morning Herald.
“It’s Malcolm Turnbull, again, adopting the policy agenda Tony Abbott told him to adopt,” said Burke.
The government, however, has attacked the criticisms. It said that the policy was not only for the very rich who utilised the tax concession but also for ordinary workers such as nurses and teachers.