While Prime Minister Tony Abbott ruled out any changes to negative gearing last week, Labor's Shadow Treasurer Chris Bowen has signaled a Labor government would wind it back. Speaking at the National Press Club on Wednesday, Bowen said it would be "irresponsible to rule out going to the next election with changes to, for example, negative gearing."
"I have said our principle will be 1. Do not disadvantage people who have made investments in good faith under current rules. 2. Do not risk reducing the supply of new housing or, if possible, improve the situation with the supply of new housing'," said Bowen. But any negative gearing change would have to be prospective in its application and would not affect existing landlords.
In an interview with Sky's Graham Richardson last night, Social services minister Scott Morrison defended negative gearing. "You'd be surprised how many people…particularly in small business who don't earn a lot of money who have invested through negative gearing into properties to provide for their own retirement. That is a fairly common practice," Morrison said.
Richardson retorted that negative gearing was a tax break for the wealthy, saying, "Mate, a battler out there in the suburbs on $70 grand with the three kids, how many extra houses do you reckon he owns?"