One year on from the Albanese Government’s thumping election win, some are wondering whether the Prime Minister and his team might have bitten off more than they can chew.
Before Tuesday’s Budget, a common critique of the government had taken hold; that its control of 94 seats in the 150 seat House of Representatives gave it the clout to be courageous on policy; a once in a generation chance to do big things — and yet Anthony Albanese’s team had seemed timid and more concerned with leaving no scope for its critics than landing achievements that would make a mark for decades.
Love them or loathe them, the Budget’s capital gains and negative gearing tax changes are high risk.
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The Prime Minister calls them “the most significant reforms to tax policy and housing policy that Australia has seen”.
Housing Minister Clare O’Neil now boasts she is leading “without question, the most ambitious Australian agenda on housing that a government has had in this country for 70 years”.
O’Neil sat down with 7NEWS podcast ‘The Issue’ to discuss the reforms.
She is adamant her move from the high-profile home affairs portfolio to housing two years ago was no demotion.
The central role housing now has in the government’s agenda, suggests she’s right.
“Housing is such a fundamental shaper of the lives we lead. It affects everything, your senses, safety, security,” she said.
“This is the foundation on which every Australian is living a life in this country and that’s why what’s going on in housing just stresses me so much, especially as it affects young people.”
The need for change is not at issue.
Even many of the very baby boomers who’ve used the old tax advantages to buy multiple investment properties, acknowledge something is wrong when their children and grandchildren can barely hope to buy a home in their working lifetimes.
“It’s not just one problem,” O’Neil said.
“There’s no silver bullet here. It’s actually lots of really difficult problems that are bound together.”
Now the Opposition has decided to go all out in an attack on the changes.
According to Shadow Treasurer, Tim Wilson: “They’re going to increase rents, build fewer homes and kneecap young Australians by taxing their first home deposit when it’s invested.”
He’s not alone in holding such a dire view of the changes.
One prominent property investor told 7NEWS the tax reforms are “an absolute joke”.
Sam Gordon has come to prominence on the Gold Coast as a young high school dropout who built an empire on buying and selling property.
Now 36, he says he has bought about 150 homes.
How does he see the government’s housing changes?
“There’s no way this isn’t gonna cause massive rental stress and pressure. Immediately pulling rentals off the market. Supply is gonna dip. We’re going to see big rental increases,” he said.
According to Gordon, his property investments will be fine.
The changes will instead hurt those who can least afford it.
“I believe it’s gonna drive a massive rental deficit in the market,” he said.
O’Neil has evidence to suggest otherwise.
“So the treasury modelling says that rents might increase by about $2 a week. We get for that 75,000 renters who get to move into home ownership,” she said.
In time, we’ll find out who is right.
What we know today is this.
The government that appeared risk averse, is taking a considerable risk in an area of policy — housing — where policy mistakes could hurt a great many Australians.
