Scott Morrison says Labor's plan to scrap negative gearing will raise 'very little' revenue
Federal Treasurer Scott Morrison has criticised the efficacy of the Opposition's plan to scrap negative gearing on established houses, arguing it will not help the budget bottom line as much as Labor is claiming it will.
- Scott Morrison says scrapping negative gearing will not raise as much revenue as Labor claims
- The Treasurer said the plan was "like their famous mining tax"
- Parliamentary Budget Office said measures could save $32 billion over 10 years
Opposition Leader Bill Shorten's announcement on Saturday proposed scrapping negative gearing for established properties from July next year.
The changes would not affect the tax arrangements for investment properties purchased before July 2017.
"Like their famous mining tax, Labor's proposed change to negative gearing promises big, but raises very little revenue," Mr Morrison wrote in an opinion piece published in News Corp newspapers.
"It could also have some very nasty consequences for everyday mum and dad investors just trying to get ahead."
Parliamentary Budget Office costings show the measures could save the budget $32.1 billion over 10 years once they come into force.
"The less than $600 million their changes will raise over four years, not $30 billion, does not even pay the monthly interest bill on the debt Labor gave us, let alone the higher spending they have planned," Mr Morrison wrote.
"The first priority for any revenue derived from changing any taxes should be to reduce taxes on those who are earning in our economy to support jobs and growth."
Shadow treasurer Chris Bowen hit back, arguing only Labor was putting forward policy proposals for the tax system.
"We look at structural saves over the long-term which do take a while to build up but the budget needs long-term repair and so this is a change which doesn't have a huge impact in the first four years, we want it to build up," Mr Bowen told the ABC's Insiders program.
"The reason for that is because we have grandfathered everything now, Scott Morrison in his consideration is not going to grandfather.
"If he's going to get bigger returns to the budget in the first four years by whacking into existing investments he should say so.
"He should rule out doing that because that's the clear implication of his criticism."
Source: ABC News