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I heard Laurie Oakes say on CH9 that Labor was going to abolish negative gearing on existing properties from 2017.

About time someone did.
 
SirRumpole said:
I heard Laurie Oakes say on CH9 that Labor was going to abolish negative gearing on existing properties from 2017.

About time someone did.
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That will be a bit difficult for them when they won't be in government in 2017 ;)
 
SirRumpole said:
I heard Laurie Oakes say on CH9 that Labor was going to abolish negative gearing on existing properties from 2017.

About time someone did.
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I couldn't hear it clearly as I was in a noisy area, but I thought he said it would be abolished for new properties not existing ones.
 
While I'll reserve my judgement until I see more detail on what Labor actually proposes on CGT and negative gearing but I think it's good they're now substantively entering the economic debate.

Critical I think will be how their proposed changes fit with the principal of broader base/lower rate for taxes in general and in this specific case, the broader constituency of income tax payers impacted by the changes. The additional revenue raised from these sorts of measures should in my view principally target reducing the top two marginal tax rates as that goes hand in hand with the base broadening.
 
SirRumpole said:
I think the idea is to encourage building new homes, so it's a waste of money having NG on existing properties.

http://www.abc.net.au/news/2016-02-13/bill-shorten-negative-gearing-capital-gains-tax-plans/7165462
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I stand corrected. What is interesting and expected is that all existing investments under the scheme would be fully "grandfathered" and protected against the changes according to your link.

I think the reforms are sensible, but it will be interesting to see the effect this will have on existing properties. There might be an increase in price (compared to what they would have been) as the deadline comes closer as investors try to acquire existing properties as they will still have the NG entitlement after the deadline (for those holding them at the deadline). After the deadline, existing properties will be less attractive to investors looking to purchase an investment property as NG will no longer be an entitlement on those properties. This will drop demand for existing IPs in the long run. On the other hand, after the deadline investors will be reluctant to sell existing investment properties to perhaps upgrade their investment to a newer established investment as they would loose there NG advantage. This will drop supply of existing properties to the market.
 
bellenuit said:
After the deadline, existing properties will be less attractive to investors looking to purchase an investment property as NG will no longer be an entitlement on those properties. This will drop demand for existing IPs in the long run. On the other hand, after the deadline investors will be reluctant to sell existing investment properties to perhaps upgrade their investment to a newer established investment as they would loose there NG advantage. This will drop supply of existing properties to the market.
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This will be compounded by the proposed CGT changes.

The key measures included:
•Negative gearing to be restricted to "newly constructed homes"
•Capital gains tax discount reduced from 50 per cent to 25 per cent
•Both measures would come into force from July 2017
•All existing investments under the scheme would be fully "grandfathered" and protected against the changes.
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The first thing I can see is the obvious distortion this will create in broader investment markets in the lead up to July 2017.

http://www.abc.net.au/news/2016-02-13/bill-shorten-pledges-negative-gearing-changes/7165854
 
A quick note on Labor's proposed halving of the CGT discount.

At present, the top two rates of income tax (including the deficit levy on the top rate and Medicare) are 49% and 39% respectively. With the present 50% CGT discount, these reduce to 24.5% and 19.5% respectively. If this discount is reduced to 25%, the above CGT post rates post discount are 36.75% and 29.25% respectively.

For those on the top marginal rate, this results in a tax rate that is higher than the present 30% corporate rate. There will therefore be an obvious incentive for high income investors to undertake capital investment through a corporate structure rather than as an individual taxpayer. I wonder if the modelling of the additional revenue this is expected to raise takes that into account.
 
bellenuit said:
I stand corrected. What is interesting and expected is that all existing investments under the scheme would be fully "grandfathered" and protected against the changes according to your link.

I think the reforms are sensible, but it will be interesting to see the effect this will have on existing properties. There might be an increase in price (compared to what they would have been) as the deadline comes closer as investors try to acquire existing properties as they will still have the NG entitlement after the deadline (for those holding them at the deadline). After the deadline, existing properties will be less attractive to investors looking to purchase an investment property as NG will no longer be an entitlement on those properties. This will drop demand for existing IPs in the long run. On the other hand, after the deadline investors will be reluctant to sell existing investment properties to perhaps upgrade their investment to a newer established investment as they would loose there NG advantage. This will drop supply of existing properties to the market.
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I'm broadly in favour of Labor's proposal. Fair enough to retain neg gearing on new properties, as it builds housing stock. I think it's worth a try.

My hope is that with existing invest properties, once attracting lesser CGT discount, and nil neg gearing tax deductions, they would subsequently end up in the hands of residential owners, i.e. increasing avail housing stock.

Don't know about your reluctance to sell/upgrade statement, I think the temptation would be too great for many.
 
In the following article, there's a little more detail on Labor's proposed NG changes.

Chris Bowen,
He said investors could still negatively gear new properties, defined as one that's been built in the last 12 months and where the taker out of the loan is the first owner of the property after the developer, and this was not any riskier than buying established properties.

"That's not in any sense any more risky than buying an existing property. There's an element of risk to any investment. So some people think property never goes down, sometimes it does, but that applies to existing properties as well as new."

Treasurer Scott Morrison said that while the government was considering all proposals, Labor's tax measure would add just $0.56 billion to the budget over the next four years.

"Bill Shorten called the mining tax landmark reform. It raised no revenue. Australians will recognise the pattern and won't be fooled again. Bill Shorten's long con is back," Mr Morrison said.

Modelling for Labor by the Parliamentary Budget Office says the plan will save $32.1 billion over 10 years but only around $600 million over the first four years, which Mr Bowen said was because the plan was not retrospective.
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http://www.afr.com/news/politics/ch...g-plan-wont-create-new-bubble-20160213-gmtkck

I'd like to see some form of policy document that offers some more detail on these proposals but are yet to fine one.
 
You have to give Shorten some credit for finally getting Labor doing something.
Rudd and Gillard were abject failures on reform. I do wonder however if the reason this is occurring is to try to short circuit Turnbull's reforms which I am sure will have some similarities.
 
Labor's NG policy is based on the following from the McKell Institute,

http://mckellinstitute.org.au/wp-content/uploads/pdf/McKell_Negative-Gearing_A4_WEB.pdf

For its policy, option 4 has been chosen.

It would appear from the above that the restriction will be limited to residential property. This will still allow negative gearing into other investment categories casting doubt over the revenue projections.

Casting further doubt over the revenue projections would be the extent to which investment would inevitably be brought forward to beat the cut off date. This would be compounded by the proposed GCT concession changes.

Given the initial small revenue projections initially (due to grandfathering), there's a possibility this might even cost the budget in its early years.

Sorry folks, the policy in its present form is crap.
 
drsmith said:
A quick note on Labor's proposed halving of the CGT discount.

At present, the top two rates of income tax (including the deficit levy on the top rate and Medicare) are 49% and 39% respectively. With the present 50% CGT discount, these reduce to 24.5% and 19.5% respectively. If this discount is reduced to 25%, the above CGT post rates post discount are 36.75% and 29.25% respectively.

For those on the top marginal rate, this results in a tax rate that is higher than the present 30% corporate rate. There will therefore be an obvious incentive for high income investors to undertake capital investment through a corporate structure rather than as an individual taxpayer. I wonder if the modelling of the additional revenue this is expected to raise takes that into account.
Click to expand...
The CGT discount requires reform but the above illustrates how simply cutting it is too simplistic. It also compounds the shortcoming of the existing discount in relation to long term investment relative to the former CPI indexation method.
 
ANU have produced an analysis of Labor's recently announced NG and CGT policies,

http://rsss.anu.edu.au/sites/defaul...lling _Negative_Gearing_and_Capital_Gains.pdf

Labor have also added the policy to its website,

http://www.alp.org.au/negativegearing

The latter confirms Labor's NG policy is not broadly across the investment sector,

Labor will limit negative gearing to new housing from 1 July 2017. All investments made before this date will not be affected by this change and will be fully grandfathered.

This will mean that taxpayers will continue to be able to deduct net rental losses against their wage income, providing the losses come from newly constructed housing.

From 1 July 2017 losses from new investments in shares and existing properties can still be used to offset investment income tax liabilities. These losses can also continue to be carried forward to offset the final capital gain on the investment.
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Shares are excluded from the policy, that's clear. Property outside the residential sector is still not clear from the above.

ANU above,

For negative gearing the Federal Opposition proposes to quarantine negatively geared investments to newly constructed dwellings only. Negative gearing would no longer be allowed for existing dwellings or a range of other investment classes. There are a number of exemptions in this policy though for business investment classes.
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It's not clear from the above whether business investment classes is a reference to privately held shares or losses from investments held within a business.
 
Shorten's ALP:

I acknowledge the traditional owners of the land on which we meet, I pay my respects to elders past and present.

For Labor people, those words of respect always carry a promise – a promise to close the gap and extend equality of opportunity to the first Australians.

Tanya, thank you for the generous introduction and thank you for being such a fantastic deputy leader of the Federal Labor Party.

Friends, delegates, true believers.

It is an honour to stand here before you.

You are all passionate people, deeply committed to the future of this nation and the betterment of Australia.

I want to acknowledge my outstanding Labor team – and my future colleagues, our great candidates.

And no rotten royal commission will stop me the great Australian trade union movement.................
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I was exhausted after the first sentence:D



http://billshorten.com.au/category/speeches
 
Don't know if this has been posted yet (or in other threads), but here goes...

ALP operatives on taxpayer-funded US trip caught up in hidden camera campaign sting​

Labor volunteers have been caught on hidden cameras bragging about using Australian taxpayer funds to work on a US presidential campaign and interfering with Donald Trump and Hillary Clinton campaign signs.

In a video posted online by the conservative undercover campaign group Project Veritas Action, four Australians are recorded saying they received taxpayer funds for flights, accommodation and daily expenses while organising for Democratic senator Bernie Sanders' presidential campaign, a possible breach of US election law.

Former Australian National University Labor Club president Ben Kremer is identified in the video trying to remove campaign signs for Republican candidate Donald Trump in Manchester, New Hampshire, acknowledging in the secret recording that the tactics were not legal.

Australian Labor Party national secretary George Wright told Fairfax Media he had launched an investigation to confirm the federal government-funded Australian Political Parties Democracy Program complied with US election laws.

He said behaviour shown the video, reported by right-wing media outlet The Washington Times, was "completely inappropriate" and was also being investigated.

Mr Kremer, a party member and campus organiser in Canberra, tells the undercover film crew that volunteers were instructed not to post information about their work on social media, because it could cause the Coalition government to cancel the program.
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