Mr DULUK (Waite) (11:30): I move:
That this house opposes Bill Shorten and Labor's plans to abolish negative gearing and increase capital gains tax by 50 per cent, which would damage Australia's housing market and destroy equity in people's homes.
This is the party that supported and endorsed Mark Latham to become prime minister of Australia. Of course, Mark Latham has just been elected as a One Nation candidate in New South Wales. When I was in New South Wales on election day in the seat where I was handing out how-to-vote cards, the Independent member was preferencing One Nation and Labor ahead of the very good Liberal candidate. Obviously, the Labor Party was happy to do deals in New South Wales in relation to One Nation. This is the party of Bill Shorten and the party the member for Light supports—
The Hon. A. Piccolo interjecting:
The SPEAKER: Order!
Mr DULUK: —and is very happy to do so. As I said, it is only the Labor Party and the brains trust behind it that could bring in and advocate for a policy that will destroy households, increase rents and devalue the family home, punish the elderly, the housing sector, the economy, job creation, punish investors and hardworking Australians who want to invest in their own homes and in the economy and, at the same time, actually punish federal Treasury coffers as well. This is what the Labor Party is renowned for, and God help us if there should ever be a future Labor government.
Bill Shorten and Labor plan to abolish negative gearing and increase capital gains tax. What does this mean? What does it look like? Negative gearing, in a nutshell, is a common investment strategy, one that is completely transparent and has been in practice for many years. Negative gearing is an investment strategy adopted by many Australians, many mum-and-dad Australians, hardworking nurses, police officers, teachers—
An honourable member: Firies.
Mr DULUK: Firies. I bet even some members of the opposition are negative gearing investors as well, so I wonder if they declared all that conflict when they were at the national conference when this policy was passed. Negatively gearing a rental property, sir, as you may be aware yourself, is an opportunity to invest in the housing market. The housing market and the construction industry provide tens of thousands of jobs for Australians and, indeed, South Australians.
The Hon. A. Piccolo interjecting:
The SPEAKER: The member for Light has had his Weet-Bix this morning, I can tell.
Mr DULUK: The member for Light should actually support negative gearing because, as he
knows, there is so much important development in his own community and his own representation—
The Hon. A. Piccolo interjecting:
The SPEAKER: Order!
Mr DULUK: —that is benefiting from the housing industry. It would be interesting to see what effect Bill Shorten's proposed policy may have on construction jobs in his own electorate. Of course, he will have to go to his electorate to defend why there has been a downturn in the economy and the housing market because of any potential Bill Shorten Labor government. Of course, all those members opposite—
The Hon. A. Piccolo interjecting:
The SPEAKER: Order, member for Light! The member for Waite has the call.
Mr DULUK: All those members opposite, as they go to vote with their red ticket on polling day, vote Labor with their union mates, GetUp!, the AEU and the CFMEU—the most misogynistic union of all unions in Australia. The CFMEU is going to call the shots for the Labor Party should there ever be a Labor Party, God forbid, elected in Australia. It is a union that loves standover tactics and loves picking on women in the workplace—some of the most derogatory things you can see. That is going to be the future of the Labor Party. That is what the member for Light is voting for at some point, come May.
All the Labor members opposite, as well as the Labor candidates and the federal Labor members, are going to have to go to the electorate and justify why their policy is going to hurt hardworking mum-and-dad Australians. That is ultimately what we are here to debate today. This side of the house knows that it is important to support mums and dads and mum-and-dad investments and, more critically, the housing market.
As I said, negative gearing is when someone buys an investment property and has offsets and deductions in relation to that rental income. Of course, another part of the Labor proposal is to remove the 50 per cent capital gains concession. These are some of the big issues. It is not just me who has great concerns with the Labor Party's approach and Bill Shorten's approach; it is also the Morgan Stanley rating agency. Morgan Stanley have come out and said that house prices will fall if this proposed policy is brought into effect and that will feed into negative consumer sentiment and flow into reduced consumer consumption.
We have obviously just seen the federal budget handed down last night. I congratulate the federal Treasurer on a very good and fair budget. For me, it is one that certainly strikes at the heart of the key Howard-Costello budgets, and it is one that looks after SMEs. The SME concessions and the instant asset write-off are so important for a lot of tradies who run their own business, such as tradies who work in the construction industry.
There are some fantastic tax cuts in the budget for low and middle-income earners across the nation, which is so important. It is fantastic that it is only a Liberal government that can deliver a surplus budget and tax cuts at the same time. Labor have not been able to do that since 1989, and they will not be able to do that if they are elected at the forthcoming election.
If you look at the underlying figures in the budget, it is interesting that consumers' confidence across Australia is down slightly at the moment. House prices are falling in many of our cities. New construction dwellings and approvals are down. Credit has been tightened. Lending institutions have tightened credit lending. There is less capital flowing into markets at the moment. All of this has a negative effect on housing, house consumption and house purchasing.
The last thing the Australian economy and the housing market need right now is something as fundamental as a change in policy that has been around since Hawke-Keating, the doyens of the Labor Party. Hawke and Keating tried to reform this back in the eighties and nineties. They knew that they should not, and they did not, to their credit. Right now, the housing industry does not need any shock or uncertainty. Bill Shorten, the federal Leader of the Opposition, is proposing to implement his negative gearing policy by 1 January.
Already that has created uncertainty in the market. Well, it is double uncertainty: the uncertainty of a Bill Shorten Labor government and, God forbid that he ever gets in, what that implementation will look like from 1 January. Of course, this bit of Labor legislation, should they actually win, has to be negotiated through the Senate. So much for consultation with industry stakeholders. There was a lot of—
The Hon. J.A.W. Gardner: Negotiating with the Greens and the Shooters.
Mr DULUK: Well, the Greens and the Shooters, and of course we know that the Greens will be preferencing the Labor Party at this coming election. As the education minister so rightly confirms, they want to bring in death duties. They want to destroy the US alliance. I would like to see what the federal Labor Party think about that. They are going to take Greens preferences to try to win the marginal seats because the Labor Party have destroyed their traditional base. BIS Shrapnel have also come out and modelled the ALP's negative gearing policy. The report modelled limiting negative gearing and grandfathering pre-existing investment—that is what they looked at in their modelling. The report found that the policy could see rents jump by as much as 10 per cent. BIS Shrapnel, a very independent and certainly not partisan modelling agency, have modelled and said that rents will increase by 10 per cent under the Labor Party's policies. Rents will go up for uni students who are living in share housing, perhaps, on the edge of Adelaide. Rents will go up for perhaps single mums and their families living in rental accommodation in my community.
Rents will go up for older South Australians. There are so many older South Australians, as you know, sir, who rent their homes. They may have downsized from an existing family property on a larger allotment and are now in rental accommodation as they enjoy their retirement years. They are going to have a rent increase of, on average, 10 per cent. These people are on fixed incomes, and all because of some ideological partisan decision of the federal ALP to perhaps deal with some perception issues in the western suburbs of Sydney they are going to punish renters here in South Australia, which is an absolute disgrace.
Even the Grattan Institute, which is certainly no think tank of the Liberal Party or of the centre right, said that there will be 'a sting in the tail' of the property and investment sector should the ALP win office. To quote the Grattan Institute:
We think it is unfair that people can work all their lives, pay taxes, work hard to leave a nest egg for their children only to be driven out of their homes so the ALP can achieve some arbitrary number of new homeowners.
Those are not my words, but the words of the Grattan Institute. What will this actually look like for Australians? According to federal Treasury, in 2012-13 nearly 70 per cent of all people who negatively geared their property had a taxable income of less than $80,000 per year. So the mantra from federal Labor is that negatively geared properties are in the domain of the rich and wealthy in Sydney and perhaps the people living in Hartley who have many multiple investment properties. Actually, it is not: it is quite the opposite. It is suburban mums and dads who see property as a sustainable, long-term gradual investment.
I raised this many times in this debate because it is one that is of interest to me. A lot of people invest in property against the equity market, including people of multicultural backgrounds, people of Polish backgrounds, like me, and, dare I say, people of Italian ethnicity as well who have come to Australia and who choose housing as a form of investment rather than the equity market, and they should be able to.
What is interesting about federal Labor's policy is that it punishes people who have invested in property, vis-a-vis those who have invested in the equity market. So, if Labor felt that it was good enough to remove the capital gains concession on investment properties, why not remove that same capital gains concession from the equity market as well for those who invest in shares and equities and derivatives, as I know many people in the member for Kavel's electorate probably do, which is so important?
Another anomaly in this whole debate is, of course, that if you invest in investment properties via your superannuation fund you are exempt as well. It is very interesting that in the whole shakeup of Labor's policies—whether it be negative gearing or franking credits—there seems to be a bias towards Industry SuperFunds. Industry SuperFunds are not going to be affected by the franking tax changes like, perhaps, a superannuant through a Triple S scheme or a self-managed superannuation scheme, and it is the same when it comes to investing in housing. I wonder why Industry SuperFunds will not be affected? Because, of course, they are controlled by the union movement. That is how the Labor Party get their union mates on funded board positions—via Industry SuperFunds. That is what they do so well and, lo and behold, the way they create their policy platform is to exempt anything to do with the union movement.
RiskWise and WargentAdvisory also undertook some analysis on negative gearing CGT in Australia's residential property markets to June 2018, and it is suggested that the ALP's policy could lead to a reduction in new dwellings and drive down property prices. What does a 6.9 per cent reduction look like? First, it will change a borrowers LVR (loan to valuation rating) with their lender, and, of course, a reduction in property prices. There is a correlation with a reduction in consumer sentiment that goes with that and confidence in the market. It is confidence in the market that drives investment, which we so greatly need.
Other modelling by Property Investment Professionals of Australia has found that we could see a reduction in collected stamp duties over 10 years, between $10 billion and $32 billion across all jurisdictions, as there will be fewer investment properties and a lower turnover of properties being purchased and sold, which of course will have an effect on our state and federal treasuries, which then has a detrimental effect on rents.
In conclusion, Bill Shorten plans to abolish negative gearing and consumers and taxpayers will miss out. Mum-and-dad investors will be worse off if Labor continue with their current war on households and on Australians. It is important that we have a strong housing market to ensure stable prices and rent for all consumers and investors. Most importantly, voters should think twice before voting Labor at this coming federal election, as it will see their home prices plummet and rents go up.