Sunday, April 09, 2017
Morrison outlines objectives for housing
10:55am April 10, 2017 By AAP FTBA Scott Morrison admits tackling housing affordability won't be solved in one budget. But "shovelling money" at the problem won't help either. The treasurer will on Monday deliver a major pre-budget speech outlining the Turnbull government's approach to the issue. He will tell the Australian Housing and Urban Institutes obstacles that restrict supply must be removed. These obstacles include planning delays and regulation, infrastructure and services, development costs, taxes and charges and access to sites, including government land. He's also made clear the federal government won't be touching negative gearing, describing it as an established and structural component of Australia's housing market. "If you take that away right now, particularly in this economy and the sensitivities that are there ... you are playing with fire," he told ABC radio ahead of his speech in Melbourne. Mr Morrison noted some 28 per cent of private rental housing is owned by so-called 'mum and dad' investors. He questioned who would replace them if negative gearing was tinkered with. However, shadow treasurer Chris Bowen said negative gearing must be reformed. "Apart from ruling out any changes to negative gearing, that's the only single policy he is announcing today - a policy to do nothing," he told reporters in Sydney. Amid reports the government might allow young people to access their superannuation for a home deposit, Mr Morrison appears more concerned about older people using their retirement savings to pay off mortgages. "They represent a problem that needs to be addressed in the broader national interest," Mr Morrison will say in his speech. He reiterated the national affordable housing agreement with the states wasn't working and will be addressed in the budget. "Just shovelling money out the door doesn't solve the problems, it might make people issuing press release feel better or those who have advocated for higher spending, but I'm interested in spending that money well," he said. Read more at http://www.9news.com.au/national/2017/04/10/05/59/morrison-to-outline-housing-proposals#FDZgQEgDZqsP0GED.99 Negative gearing is a form of financial leverage whereby an investor borrows money to acquire an income-producing investment property and expects the gross income generated by the investment, at least in the short term, to be less than the cost of owning and managing the investment, including depreciation and interest charged on the loan (but excluding capital repayments). The investor may enter into such an arrangement and expect the tax benefits (if any) and the capital gain on the investment, when the investment is ultimately disposed of, to exceed the accumulated losses of holding the investment. The investor would take into account the tax treatment of negative gearing, which may generate additional benefits to the investor in the form of tax benefits if the loss on a negatively geared investment is tax-deductible against the investor's other taxable income and if the capital gain on the sale is given a favourable tax treatment. Some countries, including Australia, Japan, and New Zealand, allow unrestricted use of negative gearing losses to offset income from other sources.