Industry slams endorsement, reiterating tax overhaul will slash housing supply and drive up rents
A Senate committee has endorsed the first tranche of federal Budget legislation proposing changes to negative gearing and the capital gains tax (CGT) discount, despite industry warnings that the measures will worsen Australia's housing supply shortfall.
The Senate Economics Legislation Committee released its report backing the majority passage of the legislation, which forms part of the federal government's Budget amendments targeting property investment tax concessions.
Industry association Master Builders Australia has criticised the committee's position, arguing it disregards Treasury's own modelling on the supply impact of the proposed changes.
"The Committee's report turns a blind eye to the Budget's impact on housing supply," said Denita Wawn (pictured right), chief executive officer at Master Builders Australia. "It is a mistake to shift the policy focus away from increasing housing supply and to instead focus on higher taxes to deter investment.
"This week's Federal Budget amendments will make several changes, but it remains the case that these tax hikes will reduce new housing supply by almost 9,000 homes over four years."
Wawn also cautioned that the measures would put upward pressure on rents at a time when renters and prospective buyers are already competing for limited stock. Independent modelling cited by the organisation projects that a property renting at $600 per week could see annual rental costs rise by $477 by 2029–30 as a result of the budget measures.
"This legislation, which the Committee report recommends should pass, will only increase frustration for builders, who are simply trying to get on with the job, as well as aspiring homeowners and renters," Wawn said. "The measures in this Budget are not the way to turbocharge housing supply in this country."
Master Builders Australia called on policymakers to pursue supply-side interventions instead, including enabling infrastructure investment, reduced regulatory burden, workforce pipeline development, and targeted investment incentives.
"To fix the housing supply and affordability crisis, we need more pro-supply interventions such as enabling infrastructure, less red tape, a stronger workforce pipeline and real incentives for investment, not more taxes on housing," Wawn said.
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