Shadow treasurer Chris Bowen defends negative gearing data assumptions

Shadow treasurer Chris Bowen defends negative gearing data assumptions
Shadow treasurer Chris Bowen defends negative gearing data assumptions

The shadow treasurer, Chris Bowen has defended the accuracy of his costings of the opposition’s signature negative gearing reform. 

It follows reports in the Australian Financial Review and the Australian questioning whether the policy was based on accurate numbers on the extent of new home acquisitions by investors.

Labor has said it would remove negative gearing for people who purchase existing properties from 1 January 2020 and halve the capital gains tax discount for properties bought after the same date – measures expected to raise $2.9bn over four years or $35.1bn over 10.

Bowen said in February the Grattan Institute had stated that “around 90% of investment lending is for existing housing”, implying that 10% is for new housing – a figure he has stated publicly for three years.

Bowen angrily rejected the reported black hole, arguing that his public statements about the current rate of investment loans for new housing were designed to show the policy rationale of negative gearing to stimulate new housing had failed but the figures used in costing the policy were “quite separate”.

Bowen revealed the PBO had originally calculated that 12% of negatively geared dwellings would be new properties, which they had now updated to 22% in the first year, rising over time.

The PBO had reached a “prudent assumption” based on “the best evidence available to them”, including Australian Bureau of Statistics data but supplemented by “unpublished data” from the Reserve Bank and big four banks.

“We have the most rigorous costings process of any opposition, ever,” he said. “The PBO stands by their costings and I stand by the PBO.”

Bowen said Labor would provide full costings of its revenue measures “in good time during the election campaign”. 

Tags: 
Negative gearing Labor Party

Community Discussion

Be the first one to comment on this article
What would you like to say about this project?