Labor Social Services Minister Amanda Rishworth (left) copped a grilling from Nat Barr (right) over reports the government sought advice about scaling back negative gearing

Nat Barr has unleashed at a Labor minister over the Albanese Government’s refusal to confirm or deny if it is considering changing negative gearing rules. 

The Sunrise host spoke to Social Services Minister Amanda Rishworth in a heated interview on Wednesday morning following reports the government had sought advice from Treasury about scaling back tax benefits for property investors. 

Earlier on Wednesday, Prime Minister Anthony Albanese avoided giving a straight answer on the subject when pressed by reporters at a press conference in Tasmania. 

Negative gearing policies allow property investors to claim tax deductions when the costs of owning and maintaining their investment properties, such as loan interest and maintenance expenses, exceed the rental income they earn from them.

This tax benefit can reduce the property investor’s taxable income and is used by investors to lower their tax bills.

‘Amanda, are you considering scaling back negative gearing in this country?’ Barr asked.

Ms Rishworth said Labor was focused on getting more houses built to address the nation’s housing shortage and it was not Labor’s current proposal to add negative gearing measures to that. 

‘We’ve got a really ambitious housing policy that is focused on supply. It is not our proposal to address or to add negative gearing to that. We’re getting on with the job of increasing supply for housing,’ she said.

Labor Social Services Minister Amanda Rishworth (left) copped a grilling from Nat Barr (right) over reports the government sought advice about scaling back negative gearing

Labor Social Services Minister Amanda Rishworth (left) copped a grilling from Nat Barr (right) over reports the government sought advice about scaling back negative gearing

But Barr pressed on asking if the government had specifically sought advice about scaling back the tax benefits from Treasury, even if it was not part of a current proposal.

Barr repeated the question multiple times but, rather than give a yes or no response, Ms Rishworth took aim at her political opponents. 

‘I have to be very clear that as the government, our focus is on delivering our housing agenda that we have got in front of us, quite frankly, if the Greens and the Coalition would get out of the way in the Senate.’

‘Okay that’s obviously a non-answer,’ an exasperated Barr said.

Shadow Finance Minister Jane Hume, who appeared on the same interview as Ms Rishworth, claimed scaling back negative gearing could reduce the amount of rental properties provided by investor landlords.

‘You take away negative gearing, as clearly the government are planning to do, that’s why they are commissioning the work… you are going do have a dramatic impact on rental supply,’ she said.

‘That’s a real problem in this country already. It would only make it worse.’   

Former Labor leader Bill Shorten’s plan to get rid of negative gearing contributed to him losing the ‘unloseable election’ to Scott Morrison in 2019. 

When Mr Albanese took over, he said changes to negative gearing were off the table.

Anthony Albanese would not confirm whether his government is considering changes to the tax benefits for property investors amid a housing shortage

Anthony Albanese would not confirm whether his government is considering changes to the tax benefits for property investors amid a housing shortage

In interviews last week, Mr Albanese was asked repeatedly if Labor would consider changes to negative gearing, and at no point did he rule it out.

‘I don’t answer those sorts of questions,’ he said on ABC Radio National last Thursday. 

But two days before that, he publicly made reference to a claim from the Property Council of Australia that changing negative gearing would hurt housing supply.

‘So that is one of the reasons why we’re very cautious about that,’ he told ABC Radio Sydney.

Being ‘cautious’ is not ruling something out, though, and one Labor official who spoke to Nine Newspapers said: ‘This is what Labor needs and wants – they need to have a fight on policies that shows what they stand for.

‘It’s in the values frame. This is why Albo was reticent about ruling it out the other day. Look at what Albo has said, he has not knocked it on the head.

‘This will give the government something big and positive to talk about, it will be a major talking point in the campaign.’

Governments often request policy evaluations from Treasury officials without intending to follow through with changes.  

However, according to the official, the modelling suggested that Labor was gearing up to present changes before the upcoming election.

Labor requested similar modelling from the bureaucracy before changing the Coalition’s Stage Three tax cuts earlier this year. 

What is negative gearing?

By Stephen Johnson

Investor landlords can claim a rental loss against their taxable income, an arrangement known as negative gearing.

Even if they don’t make a loss, they can claim expenses from interest payments to council rates and property maintenance so they can reduce their taxable income.

In the 2019-20 financial year, 35 per cent of people who claimed rental deductions were in the top group of taxable income earners.

Treasury calculated that in 2019-20, 2.4million people claimed $51.3billion in rental deductions against their taxable income.

This cost the Budget $18.6billion in forgone revenue as 1.3million people claimed a loss from rental income failing to keep pace with mortgage repayments – a situation known as negative gearing.

The ‘other rental deductions’ category was claimed by 47 per cent of taxpayers claiming rental expenses on tax, including council rates and property maintain.

Another 44 per cent claimed interest deductions while 9 per cent claimed capital works.

Australians claimed an average deduction of $7,790 from rental deductions.

Men on average claimed $8,840 in rental deductions, compared with $6,660 for women – a $2,180 difference.

‘A higher share of the reduction attributed to men reflects higher average deductions and higher average taxable incomes,’ Treasury said.

Men claimed 59 per cent of deductions with women claiming 41 per cent.

Property investors are also reducing their taxable incomes to very low levels by claiming by rental deductions.

‘The share of the benefit for those in the lowest taxable income decile is driven by both the number of tax filers and their relatively large average deductions,’ Treasury said.

‘These tax filers tend to have higher incomes before deductions but their claims for expenses associated with maintaining their rental property substantially reduce their taxable income, pushing them into lower deciles.’

You May Also Like

Mets vs. Brewers Wild Card Game 3 bets: Back the visitors to advance

Gambling content 21+. The New York Post may receive an affiliate commission…

Too Fun to Check: Adams Replacement Took Cash From Same Donor in Indictment

Perhaps Big Apple denizens need to prepare a Plan C.  Last week,…

'Sitting and waiting to die': Australian teacher stranded in Lebanon

An Adelaide school teacher is stranded in Lebanon despite days of desperate…

Sydney underworld figure escapes death for the third time after being shot in Winston Hills

By Cameron Carpenter and Eliza Mcphee For Daily Mail Australia and Aap…