Subjects: Negative gearing; Passenger Movement Charge; Backpacker Tax
LISA WILKINSON: Well the Aussie dream of owning a home is under threat thanks to flawed tax laws. That’s the dire warning from within the Liberal Party, with a senior minister calling for urgent changes to the system. For more we are joined now by Minister for Revenue and Financial Services Kelly O’Dwyer and Shadow Transport and Infrastructure minister – Shadow Minister – Anthony Albanese. Someone very hopeful wrote that script on your behalf.
KELLY O’DWYER: Future Labor Party Leader.
ANTHONY ALBANESE: Well, the Government has stopped governing, so they have got ahead of the pack.
WILKINSON: Exactly, Good morning to both of you.
O’DWYER: Good morning.
WILKINSON: Kelly if I can start with you. Now Labor has been arguing for a long time now that negative gearing is forcing prices up. Now they have an ally from within the Liberal Party, New South Wales Planning Minister Rob Stokes. Is he right?
O’DWYER: Well look a lot of average mums and dads rely on negative gearing to actually have a foot in the property market. In fact the majority of Australians who use negative gearing have got an after tax income of $80,000 or less and that includes a lot of people who are emergency service workers, policemen. Around about 40,000 of them actually utilise negative gearing. So the Labor Party wants to pretend that this is somehow the simplistic solution to fixing the housing affordability problem. Unfortunately it isn’t. It’s got a lot to do with supply and demand and the truth is new are just not building enough houses to meet up with the demand that is there.
WILKINSON: But I mean there’s got to be a better solution than that because supply is increasing at the moment but prices are continuing to go up. I would argue there’s more than 40,000 couples and young families and singles that would like to buy into the property market and just can’t.
O’DWYER: Well it is a real struggle and it is absolutely right to say that we need to have increased supply. We need to look at a number of measures. It’s not just one simple solution that is actually going to fix the housing affordability crisis, which is one of the reasons, one of the reasons, why the Government has been working hand in glove with the states and the territories to work out what we can do together to actually help make it more affordable, particularly for those young Australian families who are trying to get into the market.
WILKINSON: But Kelly, here’s the thing – you’ve got a senior Liberal minister who is telling you that what you are doing right now isn’t working. Albo?
ALBANESE: Well look, we have here the most senior Liberal planning minister in the country, Rob Stokes, belling the cat on an issue that Australians know is an issue for their kids and their grandkids. They are being frozen out of the market. We are in danger of developing a society whereby some people are able to buy their sixth, seventh, eighth home, but people trying to get into the housing market to buy their first home simply aren’t able to. And the planning minister in New South Wales is saying what Scott Morrison was saying earlier this year. He said that there were excesses in the way that capital gains tax and negative gearing are applied. It’s only after Labor brought out our policy that they shut the door on reform. It’s not working. It does need a whole sweep of measures. Kelly is right there. But they have ruled out one of the measures which is necessary, which is to cut back on those excesses.
WILKINSON: All right. Moving on, meantime the Turnbull Government has been hit by yet another embarrassing parliamentary blunder after a One Nation no show killed off its proposed $5 departure tax hike. Kelly, it’s happened again – the Government caught napping on crucial legislation. Why aren’t you ensuring that crucial crossbenchers are there for the vote when you so badly need the numbers to get anything through?
O’DWYER: Well they were certainly there for the Registered Organisations Bill, which went through. They were certainly there for the superannuation changes that went through this week which is actually going to help millions of Australians to be able to save for their retirement – fantastic changes that are actually going to help women particularly to catch up on their superannuation contributions. Look, the truth is the Government works very hard with all of the crossbenchers and also the Opposition and the Greens to make sure that the Parliament can work smoothly. We’re not responsible for rounding up every single member of the Parliament.
WILKINSON: But you need to be. You actually need to be to get legislation through. Has One Nation Senator Pauline Hanson explained why she wasn’t there for you?
O’DWYER: Well in fact the legislation has in fact been corrected. It’s going to be back in the Senate next week and we are going to be able to vote on it next week. But the truth is we’ve actually had a great week this week because we got so much legislation through and as I said millions of Australians are going to benefit from our super changes.
ALBANESE: This, this …
WILKINSON: Just quickly Albo. No, no. I need to tackle you on something. The Labor Party voted in favour of a greatly reduced 10.5 per cent Backpacker Tax from the proposed 32.5. Is that really fair that you want backpackers to pay so much less than your average tax-paying Aussie?
ALBANESE: Well they won’t be paying less. They will be paying more. Your average Australian pays zero up to $18,200. The backpackers will pay from the very first dollar that they earn 10.5 per cent and most of them earn around about $10,000 to $12,000 a year. Overwhelmingly, that is what they earn. So this is a false argument by the Government. They have stuffed this up. This is a measure that they brought in in May, 2015, and it took them 18 months to actually get the legislation before the Parliament. Like the departure tax and the chaos there where they brought on a vote but One Nation weren’t there to vote, every time you look at this Government and the way that it manages the affairs of the Parliament, then they show themselves to be hopelessly incompetent. And if you can’t run the Parliament you can’t run the country.
WILKINSON: All right, we are going to have to leave it there. Hope you have a great weekend Albo. You too Kelly.
ALBANESE: Good to be with you.
O’DWYER: You too Lisa. See you Albo.