ACTU Secretary Sally McManus wants housing affordability discussed at this month’s productivity roundtable. Photo: Facebook.
The Australian Council of Trade Unions wants housing affordability placed firmly on this month’s productivity roundtable, saying negative gearing tax benefits should be limited to one investment property.
The unions say current tax arrangements have gone too far in favouring those with multiple properties while locking workers out of the housing market.
ACTU secretary Sally McManus said working Australians are increasingly finding they are unable to buy their own homes and that rents are skyrocketing in cities and the regions.
“You can’t improve living standards without addressing housing affordability,” Ms McManus said.
“Working people can no longer afford to live near where they work, and young people are locked out of the housing market and locked into high rents. It’s just not right and has to change.
“Tax rules around investment properties mean investments that could be made in making Australia more productive and growing our economy are locked up in housing.
“We cannot continue down the same path of giving investors tax supports while owning your own home gets further out of reach for average workers and becomes nearly unimaginable for young people.
“Limiting negative gearing and capital gains discounts to one investment property, alongside increasing supply, will make a big difference.
“People who have made these investments should also be given some time to adjust.”
At the roundtable, she will argue that all current negative gearing and capital gains tax housing tax arrangements should be grandfathered for five years to give property investors time to adjust to the new single investment property tax limits.
Ms McManus said the ACTU’s proposal would raise about $1.5 billion in tax revenue each year.
She said the current tax regime is hitting national living standards and she has proposed a number of reforms that go beyond housing.
“Everyone should pay their fair share of tax. The average worker pays more than 25 per cent in tax, it is only fair the very rich and big business does as well,” she said.
“We are supporting a minimum 25 per cent tax on those earning $1 million, a 25 per cent tax on family trusts and a 25 per cent export levy on liquified natural gas, replacing the broken PRRT (petroleum resource rent tax).
“Finally, we need to stop providing unnecessary billions to the big miners through the Fuel Tax Credit Scheme by putting in place a sensible cap.”
The Coalition, however, has raised concerns over the ACTU’s proposal, suggesting unions are trying to control the roundtable agenda.
Liberal Senator Jane Hume said the ACTU was flagging in advance the Federal Government’s actual intentions.
She said it “sets off alarm bells” that the productivity roundtable might be all about purely ticking off the Labor Party’s agenda.
“The Coalition has been saying for some time that the government has an agenda it wants to deliver that involves not just getting rid of the capital gains tax discount, [but also] getting rid of negative gearing, tax on family trusts, mining taxes,” Senator Hume said.
“Well, now the ACTU have just proven it writ large.”
Nationals leader David Littleproud also raised concerns over the ACTU’s wishlist, saying it could create bigger problems.
“What the ACTU asks for, they normally get, and when Labor starts talking, you start paying,” Mr Littleproud said.
“That’s the reality of what’s going to happen out of this roundtable. Just understand that if you’re a renter out there and there’s already a supply issue, this is going to have a serious impact on your ability to rent properties across this country and it will push a lot of the burden more.
“They say they’re actually going to raise $1.5 billion a year in tax.
“They’re going to have to funnel that out the other side in terms of social housing for people who can’t and don’t have the supply.
“What we should be focused on at the moment is supply, looking at building supply, increasing densities where we can to get stock into the market.
“These sorts of ideas are not going to do anything about helping those people who will never be able to afford to have a mortgage and will be put on the street because of the ACTU’s ideological drive.”
Cabinet Minister Murray Watt said nothing would be ruled in or out ahead of the roundtable.
“What we’re looking to do is to build consensus across the community on all of these kinds of issues to make sure that our economy continues to grow and becomes more productive,” he said.
Treasurer Jim Chalmers will host his three-day economic reform roundtable at Parliament House from 19 August.
