Australian Prime Minister Malcolm Turnbull had to face embarrassment on his inability to explain how Labor’s negative gearing policies can have a pessimistic effect on the real estate industry.
According to the Sydney Morning Herald, during his appearance on ABC’s 7:30 program, he could not convince the public on what he called “common sense” to justify how negative gearing schemes advocated by Labor would “take a sledgehammer” to property prices. “This is a matter of common sense,” the prime minister told the program host, Leigh Sales.
“Around a third of the buyers for residential property currently are investors. What Labor is proposing will take all or almost all of them out of the market. If you take a third of the buyers out of the market, prices, values will fall. That’s common sense,” he said.
Sales cross-examined Turnbull’s statement, asking if he wanted voters to forget about evidence and believe the PM’s analysis about the matter. To this, Turnbull defended himself and said that the public knows very well what “laws of supply and demand” teach. During the interview, according to 9News, the prime minister argued his analysis and said that the government’s decision to not considering the negative gearing schemes put forth by Labor was to make sure the Australians with average or less earning could survive well.
Turnbull looked fumbled when Sales asked him about what was the government planning to do to improve the financial modeling following the rejection of Labor’s negative gearing. ” Well it is – well, there has been modeling published earlier in the – well actually, it was given to the Labor Party last year in fact by BIS Shrapnel, but – which demonstrated,” Turnbull said.
Sales stressed on whether the prime minister was relying on whatever he was claiming. “But let me – Leigh, let me just – this is a matter of common sense. Around a third of the buyers for residential property currently are investors. What Labor is proposing will take all or almost all of them out of the market.”