Ben Kingsley, chairman of the Property Investments Council of Australia (PICA), has urged the Australian Labor Party (ALP) to “come clean” on the timeline for its proposed negative gearing reforms, which would limit the tax strategy to purchases of new homes.
Mr Kingsley also reiterated his criticism of the federal opposition’s proposal amid weakening property market conditions, particularly in Sydney and Melbourne.
“Restricting negative gearing to new property was always a ridiculous so-called ‘solution’ to Sydney’s strong price growth, which has now well and truly dissipated because it was merely a sign of the peak of a market cycle,” Mr Kingsley said.
“If the policy was absurd back then, it’s even more so now, with the national economy flat-lining due to a number of poor indicators, including significant property price falls in our two biggest cities.
“Labor supposedly represents everyday Australians, yet the policy is likely to see the wealth of their constituents nose-dive even more because of the negative impact it will have on the market.”
The PICA chairman claimed that home owners and investors are “fearful” of the proposed changes and urged the Labor opposition to ease the “uncertainty”.
“The majority of every Australian’s wealth is in their property so having the threat of their home’s value falling even further is no doubt part of the reason why our economy is in the doldrums,” he said.
“It’s clear that people are fearful about these dangerous changes – both property owners and investors alike – so if federal Labor is thinking about introducing these measures as early as July this year, buyers need to have enough time to organise their finances and come to the market in the next few months to meet this deadline.”
Mr Kingsley urged Labor opposition leader Bill Shorten to outline the party’s policy agenda as soon as possible, given that the ALP has been tipped to win the upcoming federal election.
The latest NewsPoll figures revealed that the ALP is ahead on a two-party preferred basis – 53 per cent compared to the Coalition government’s 47 per cent.
“With Labor tipped to win the federal election, the uncertainty is affecting the Australian property market and the broader economy, which is why Bill Shorten should announce the party’s intentions today. There is no reason not to tell us their plans as the policy was formulated years ago,” Mr Kingsley concluded.
[Related: Shorten reveals Labor’s housing policy]