Housing Minister Clare O’Neil has stopped short of condemning landlords for substantial rent hikes after Labor announced sweeping changes to the capital gains tax and negative gearing.
Treasurer Jim Chalmers confirmed last week the Albanese government would wind back both tax concessions as part of efforts to democratise Australia’s housing and tax systems.
The CGT model will revert to favouring inflation indexation across all asset classes – including investment properties, shares, and businesses – with a one-year grace period before taking effect. The tax break delivered by negative gearing will be restricted to newly built homes from July next year.
Mr Chalmers said Treasury estimated the tax changes would contribute about $2 per week as a proportion of weekly rent increases.
On Wednesday, Seven’s Sunrise host Nat Barr grilled Ms O’Neil over reports Australians were experiencing weekly rent hikes in excess of $20 per week.
She questioned if Treasury’s proportional calculations were right.
Ms O’Neil responded by saying Treasury’s figures were backed by respected economist Saul Eslake and the Grattan Institute among other key voices in the sector.
She was then repeatedly interrupted by Nationals senator Bridget McKenzie, who accused the government of “hiding” behind the figures.
Barr pressed Ms O’Neil again, asking: “(Rent is) already going up … this is what Sunrise viewers are saying. Do you reckon the modelling is wrong?”
Ms O’Neil responded by saying she was “really respectful” of people’s experiences.
“But I just repeat to you that for anyone who is in a rental right now, that’s being provided by an investor. The arrangements for negative gearing for those people are grandfathered,” she said.
Senator McKenzie later interjected again to accuse Labor’s migration and fiscal policies of fuelling the housing crisis.
“When you pour in two million people, they need somewhere to live,” she said, before Barr cut her off by saying: “Hang on, Bridget.”
The Sunrise host then turned to Ms O’Neil to ask if the reason behind the rent hikes could be because of Labor’s approach to migration and spending.
“Well, that appears to be what Bridget is saying,” Ms O’Neil said.
The Labor MP earlier ruled out condemning landlords for the apparent rent hikes, saying she would not tell landlords or renters “what to do”.
Later, Infrastructure Minister Catherine King accused the Coalition of spreading “misinformation” about the tax changes in a political move she described as “unexpected”.
“I think we always said when you’re trying to make big changes and big important changes to assist people into housing, there are always going to be people who are concerned about those changes,” she told ABC Radio National.
Ms King said the response to the budget was “going as we expected”.
“We’ve been out there explaining the changes to people. I think that there’s been a bit of misinformation, which again is unexpected, particularly driven, some of it, by our opponents.”
The Coalition has ruled out supporting the proposed changes.
Shadow Treasurer Tim Wilson told Sky News the reforms would “kneecap” working Australians.
He pointed to outrage from small businesses expressed on social media, most notably through memes, at the inclusion of the sector in the CGT changes.
“Every time a small business of this country stands up and speaks out about this Prime Minister, they’re revealing this government doesn’t understand the economy,” he said.
“And where they want a government punching for them, they have a government punching at them.”
The Australian Financial Review reported overnight the government was set to fast-track the first tranche of budget legislation through the House of Representatives and would introduce it into parliament in the first week of June.
In response, Mr Wilson accused the government of “ramming the budget through to distract from the problems they are facing … and the uprising from small business owners and investors all around this country”.
The changes to tax concessions broke a key election promise after Prime Minister Anthony Albanese vowed ahead of last year’s federal election not to touch CGT and negative gearing settings.
