Bill Shorten indicates a negative-gearing rethink by Labor is possible

Labor leader Bill Shorten, right, and treasurer frontbencher . Picture: David Crosling/AAP

 AAP  9:39AM JANUARY 19, 2019

The federal Labor opposition will wait until after this year’s federal election to decide whether and when it will make changes to the negative- gearing tax break if it wins government.

Opposition Leader Bill Shorten has confirmed a proposed timeframe for the reforms will not be established until after the poll, likely to be in May.

“We will do it after the election, in consultation. The shadow treasurer [Chris Bowen] will have more to say on it,” he told reporters in Brisbane on Friday.

Labor wants to retain negative gearing only for newly-built homes — with the policy grandfathered so the changes won’t apply to existing investors — and make changes to capital gains tax.

The government argues the move would be “bad policy” that would reduce the value of people’s homes and raise rental costs.

That comes as house prices in Australia’s big cities are tipped to continue declining in 2019.

Dwelling prices already dropped by 4.8 per cent nationally in 2018, according to CoreLogic data. But Mr Shorten said the changes would be a “fairness measure” and that the government was trying to distract from its own shortcomings.

“The current government is pulling a sort of pea and thimble trick, where they want you to look over here at Labor’s future policies so as to take your attention from the fact that under the current government this economy is not working properly,” he said.

Treasurer says the there is a growing list of independent economists and property analysts warning against the concept and that most people who use negative gearing “are not rich”.

“Two in three people who negative gear have a taxable income less than $80,000,” he told AAP on Friday.

“It’s an inconvenient truth for Labor, but the people they claim to represent are those who will be hurt by their plan.”

AAP