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Wednesday, 20 February 2019
Page: 14117

Economy


Mr WOOD (La Trobe) (14:54): My question is to the Treasurer. Will the Treasurer update the House on how a strong economy and housing market benefits hardworking Australian families, including in my electorate of La Trobe? Is the Treasurer aware of any alternative approaches that would not deliver these benefits?


Mr FRYDENBERG (KooyongThe Treasurer) (14:55): I thank the member for La Trobe for his question. He knows the importance of Australia's $7 trillion residential housing market—a market that's absolutely critical to jobs through construction, a market that's absolutely critical to small business because many people in small business will mortgage the family home to invest and to grow their business. It's vitally important to the family balance sheet because, for many families, the greatest asset they'll ever own is the family home. It's also important to have stability in the housing market for our AAA credit rating. What puts at risk our AAA credit rating and what puts at risk the stability in the housing market is Labor's $32 billion new housing tax. Two-thirds of the people that it will impact currently negative gear; two-thirds of those have a taxable income under $87,000; 1.3 million people currently negative gear.

These are not wealthy people; these are people who put aside a little bit of money every month so that they can make an investment—like Robert and Cassia, both of whom are 31 years of age. They live in Cranbourne North in Melbourne's south-east. They said they plucked up the courage to buy a two-bedroom apartment at the time that their first daughter was born. Their net rental loss is around $5,000 a year. Together they earn around $160,000 a year. He's in IT; she's in sales. They said: 'The theory is not to sell the apartment any time soon and get it when we're young enough so that, when we retire, we can completely pay it off. Negative gearing makes it a more financially viable option.'

These are among the many people across Australia who will see the value of their investments go down as a result of Labor's policy. What is more, anybody who owns their own home in Australia will see it worth less under Labor's new housing tax, and anyone who rents their house will end up paying more under Labor's housing tax. In fact, there are more than two million Australians aged 20 to 34 who currently rent, and they will be hit with a new housing tax and higher rent as a result of the Labor Party's policy.

The Labor Party should have listened to the member for Lilley when he was Treasurer. He said it would be economically disastrous to touch negative gearing. Now the member for McMahon, as part of his $200 billion of new taxes, is going to take a sledgehammer to peoples' housing prices, and increase rents. Only the coalition can be trusted to keep taxes low. (Time expired)