Unions NSW has thrown its support behind reform of the negative gearing and capital gains tax concessions, arguing that the housing market is “fundamentally broken”.
The Unions NSW secretary, Mark Morey, is now calling on the Albanese government to reform the tax concessions and reinvest “profound savings” in housing, such as by expanding the Housing Australia Future Fund.
The peak body for unions in New South Wales conducted a survey of 2,158 workers in October, which found 72% wanted to reduce negative gearing tax concessions and two-thirds (66%) backed reducing capital gains tax concessions on investment properties.
Although the results are not necessarily representative because respondents self-selected to answer, the union survey comes on the heels of a Guardian Essential poll finding half the electorate in favour of reforming negative gearing, with just 16% opposed.
The union survey found support for reforming negative gearing was particularly high among workers over 65 (82% support), renters (80%), those on incomes under $48,000 (79%) and young people aged 18 to 24 (79%) and 25 to 34 (77%).
Morey said: “It’s currently easier to buy your 10th property than it is to buy your first.
“Under these conditions, essential workers earning low to middle incomes don’t stand a chance in an auction.”
Morey said it was “within the government’s power to turn this situation around and create a housing market that works for all Australians – not just a wealthy few property investors”.
“Reforming negative gearing and capital gains tax concessions would improve affordability and enable more Australians to buy their first home.”
Experts say Australia is in the midst of a housing crisis with rents rising by 16.4% and new dwelling costs up 36.2% over the two years to June 2024, during which time wages grew by just 10.7%.
Morey said the problem of housing affordability must be attacked “from every angle” including “expanding supply, cutting back handouts to investors with multiple properties, and delivering more affordable housing to bring down rents so people have the chance to build some economic security”.
“Every working person deserves the opportunity to own a home for themselves and their family,” Morey said. “But our broken housing system means securing a moderately priced rental is the new Australian dream.
“First home buyers have effectively been kicked out of the market in favour of wealthy investors. It’s time to address the inequities that are distorting our housing system so more Australians can get a fair share.”
The Greens and the Senate crossbench have been urging the government to reform negative gearing and capital gains tax, but Labor has refused to use the reforms as a bargaining chip to pass its Help to Buy shared equity scheme.
Nevertheless, in September the government confirmed reports that treasury is conducting modelling on reform options, prompting several Labor MPs to signal they would be open to reforms.
The Greens welcomed the news as evidence Labor was “cracking under pressure from the Greens, renters and first home buyers”.
In April, senators David Pocock and Jacqui Lambie release parliamentary budget office advice on five options to reform housing taxes.
The most expansive option – abolishing negative gearing, grandfathering the 50% capital gains tax discount to properties bought before 1 July 2024, and limiting it to new properties built after that date – would save $9.9bn over four years.
Under the least expansive option – limiting negative gearing to one property and disallowing the deduction for vacant properties, and halving the capital gains tax discount to 25% for new homes built after 1 July 2024 – would save $642m over four years and $15.7bn over the decade.
