Senator Andrew Bragg
Shadow Minister for Housing and Homelessness
Shadow Minister for the Environment
Liberal Senator for New South Wales
STATEMENT
In the next few days at Senate Estimates, Labor Ministers and Treasury officials must explain why their plan for more housing taxes will help solve Australia’s housing crisis.
The horror 2026-27 Budget contains a key design feature to restrain housing supply to the tune of 35,000 dwellings.
That is, the Treasury reports there will be 35,000 fewer homes due to the changes to Capital Gains Tax (CGT) and negative gearing.
Industry estimates go further. Modelling by Qaive and Tulipwood Economics say negative hearing being restricted for new homes will collapse supply by 22,700 over five years which is the equivalent to 45,000 over 10 years. HIA modelling also suggested the tax changes could result in up to 46,000 fewer dwelling starts, $3 billion off GDP, and cut up to 4,000 construction jobs.
The Labor Government has locked in a low supply housing model in Australia with a dreadful trifecta:
- At least 65,000 fewer houses (30,000 fewer on average + 35,000 by tax design),
- A complete failure to cut housing red tape which has exploded under Labor, and
- Elevated migration, which the RBA has warned against
Half of the cost of a new home already goes in government fees, charges and taxes.
43% of the new homes last year were built by investors.
More taxes will sink the Australian Dream. They will result in fewer houses and higher rents.
Accordingly there are key questions that Labor must answer this week:
- How much will investment in housing go down; why is the government trying to reduce investment in housing?
- How much will rents go up?
- What is the revenue impact of the CGT hikes, compared with negative gearing changes; and who will pay the most under these new taxes?
- What is the impact on GDP, productivity and investment of the tax hikes?
- What is the justification for replacing individual investors with managed funds and corporate landlords?