NEGATIVE GEARING – AUSTRALIA

ALP’s tax reforms will sting its voters

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Original article by Adam Creighton, Michael Roddan
The Australian – Page: 5 : 21-Jan-19

Sixteen per cent of those who voted Labor at the 2016 federal election owned an investment property, according to research by the Australian National University. With Labor planning to make changes to negative gearing if it wins the next election, ANU professor Ian McAllister notes that 16 per cent of Labor voters "equates to a lot of voters". He says the fact that Labor plans to grandfather its changes could reduce the possible impact to its vote. Meanwhile, a study of Australian Taxation Office data indicates that over 200,000 voters in Labor-held seats could be affected by its plans to increase capital gains tax.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIAN NATIONAL UNIVERSITY, AUSTRALIAN TAXATION OFFICE, AUSTRALIA. DEPT OF THE TREASURY

Labor creating a rental famine

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Original article by Greg Brown
The Australian – Page: 2 : 7-Jan-19

Liberal senator Dean Smith contends that young Australians would be most affected by Labor’s proposed changes to negative gearing. With 2.1 million renters aged between 20 and 34 in Australia, Smith says Labor’s plans represent an opportunity for the federal government to portray itself as a better option for voters in this age group. Shadow treasurer Chris Bowen says he would be happy to have a debate on whether Labor or the Coalition has the best housing policies for young people.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, SQM RESEARCH PTY LTD

Labor’s spending plans could hit a wall

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Original article by John Kehoe
The Australian Financial Review – Page: 5 : 13-Dec-18

Labor plans to increase tax revenue by about $30bn over four years if it wins the 2019 federal election, and by nearly $280bn over a decade. However, the majority of Senate crossbenchers oppose Labor’s key tax policy initiatives, including its negative gearing reforms and the abolition of cash refunds for excess dividend imputation credits. Analysis suggests that Labor’s tax revenue would be up to $19bn lower than forecast if the Senate were to reject its key tax measures.

CORPORATES
AUSTRALIAN LABOR PARTY, CENTRE ALLIANCE, ONE NATION PARTY, AUSTRALIAN CONSERVATIVES, AUSTRALIAN GREENS, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY

Labor’s tax grab faces Senate block

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 12-Dec-18

Labor may not have sufficient support in the Senate for its proposal to abolish cash refunds for excess dividend imputation credits if it wins the 2019 federal election. Labor would require the support of the Greens and four crossbenchers to pass the reforms before the current Senate is dissolved on 30 June. However, nine of the 10 crossbenchers oppose the policy, with Fraser Anning describing it as a "socialist retiree tax". In addition, none of the current senators support Labor’s proposal to restrict negative gearing to new homes, although some favour capping the number of properties that can be negatively geared.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, ONE NATION PARTY, CENTRE ALLIANCE

One-year delay likely for negative gearing changes

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 6-Dec-18

It is unlikely that Labor would be able to legislate its proposed negative gearing reforms in time for the start of the 2019-20 financial year if it wins the next federal election. The poll is tipped to be held on 11 or 18 May 2019, which would give a Labor government just six weeks to enact its reforms for them to take effect on 1 July. This means the reforms would most likely take effect in July 2020, although a Labor source has raised the possibility that the legislation could be backdated if it is passed after 1 July.

CORPORATES
AUSTRALIAN LABOR PARTY, CENTRE ALLIANCE, ONE NATION PARTY

House prices to dive 10pc more: Ellerston

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Original article by Yolanda Redrup
The Australian Financial Review – Page: 27 : 5-Dec-18

Brett Gillespie of Ellerston Capital is bearish about the outlook for Australia’s residential property market, forecasting that house prices will eventually fall by an additional 10 per cent. He adds that this could occur much more rapidly if Labor wins the 2019 federal election and implements its proposed changes to the negative gearing regime. Gillespie says a 4-5 per cent fall in house prices would be necessary to 4 to 5 per cent to offset the impact of the negative gearing reforms.

CORPORATES
ELLERSTON CAPITAL PTY LTD, AUSTRALIAN LABOR PARTY, CORELOGIC AUSTRALIA PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

Aussie John warns Labor’s property plan a nuclear bomb

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Original article by Michael Roddan
The Australian – Page: 1 & 2 : 19-Nov-18

Aussie Home Loans founder John Symond has warned that Labor’s proposed changes to the negative gearing regime could lead to a recession in Australia. He says that although the "grandfathering" provisions of the Labor reforms would benefit people who are buying their first home, they would cause property prices to fall and result in many existing homeowners having negative equity in their home. Symond supports negative gearing reforms, but he argues that they should primarily target people on high incomes.

CORPORATES
AUSSIE HOME LOANS LIMITED, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, THE TAX INSTITUTE, SQM RESEARCH PTY LTD

Negative gearing changes would create distortions

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Original article by Ingrid Fuary-Wagner
The Australian Financial Review – Page: 34 : 13-Nov-18

RiskWise CEO Doron Peleg contends that Labor’s proposed negative gearing reforms would create a two-tiered property market. Economist Stephen Koukoulas believes that concerns about Labor’s proposals are unwarranted, as any fall in house prices that might result will make it easier for first-home buyers to enter the market. Tyrone Hodge of JLL thinks the proposed changes could have a negative impact on housing supply.

CORPORATES
RISKWISE, AUSTRALIAN LABOR PARTY, JONES LANG LASALLE AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA

Investor hit: Labor seats in crossfire

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 7-Nov-18

The federal government’s analysis of income and tax data for 2015-16 shows that 1.3 million Australians owned a negatively-geared investment property during that financial year. Some 640,000 people lived in seats held by the Coalition, while 570,000 were in seats held by Labor. Two Labor-held seats in the Australian Capital Territory had the highest number of people who used negative gearing. Treasurer Josh Frydenberg says Labor’s proposed changes to the negative gearing regime will hit not only its own supporters, but all Australians who own a home.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN TAXATION OFFICE, RESERVE BANK OF AUSTRALIA, RISKWISE

ALP’s property-tax hit may be imposed as early as July

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Original article by Rosie Lewis
The Australian – Page: 1 & 6 : 25-Oct-18

Shadow treasurer Chris Bowen has defended Labor’s proposed negative gearing and capital gains tax reforms, amid concern about their impact on dwelling construction. He says modelling commissioned by Master Builders Australia is flawed as it does not take into account the fact that negative gearing changes will be "grandfathered". MBA CEO Denita Wawn argues that the grandfathering provisions will have no effect on future investment decisions. Sources have indicated that a Labor government would implement the negative gearing reforms from July 2020, and possibly a year earlier if the federal election is called before the end of 2018.

CORPORATES
AUSTRALIAN LABOR PARTY, MASTER BUILDERS AUSTRALIA INCORPORATED, STOCKLAND – ASX SGP, PROPERTY COUNCIL OF AUSTRALIA LIMITED, HOUSING INDUSTRY ASSOCIATION LIMITED, CADENCE ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE ENVIRONMENT AND ENERGY