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ABC News
10 minutes ago
- ABC News
ACTU Secretary Sally McManus calls for one property limit on negative gearing tax breaks
The Australian Council of Trade Unions will call for bold reform to negative gearing and the capital gains tax at the government's productivity roundtable this month, proposing the tax breaks be limited to one investment property. Sally McManus, the union's secretary, told ABC's Insiders the current arrangements should continue for five years but after that date "we've got to bite the bullet". "Otherwise, we're just saying 'too bad young people, you're not going to be able to ever own a home'," she said. "Since 2019, the problem has just got worse. It's going to continue to get worse unless the government is brave enough to do something about it." Labor took negative gearing reforms from opposition to the 2016 and 2019 federal elections, at which they were defeated. Ahead of this year's election it emerged that Treasurer Jim Chalmer had asked his department to model the impact of changes to negative gearing and capital gains tax concessions, but Prime Minister Anthony Albanese hosed down speculation Labor was planning to scale back the tax breaks. Ms McManus did not divulge whether she believed the government, after its landslide victory earlier this year, would go for the proposal but stressed that the union would "go and argue it". "In the end, the government will make their decisions based on what they think is in the national interest. We would say that it is in the national interest," she said. The ACTU's proposal would raise about $1.5 billion in tax revenue each year, according to Ms McManus, who added that those with investment properties would have time to adjust their portfolios. "Part of the problem is that we've been keeping a whole lot of capital in housing. And it's not those people's fault. They've done that because it has worked for them and they've made smart decisions around that," she said. "But it's also meant that capital is not being invested in areas that are going to increase productivity, like Australian businesses and other ways that it can be invested." Nearly half of all Australian landlords had negatively geared properties, according to figures released in December, that showed the highest earners are hauled in tens of billions of dollars from tax concessions and loopholes. Mr Chalmers has signalled he will use the three-day roundtable to seek new economic reforms, prioritising "consensus" among unions, business and economists. He has said he wants any reform proposals brought to the roundtable to be budget neutral or budget positive. Earlier this week, the Productivity Commission released the first of several reports requested by Mr Chalmers in the lead-up to the roundtable, in which it called for a 20 per cent tax rate on profits for companies with revenue of up to $1 billion. That would represent a significant cut for all but the largest companies from the current rate, which is 25 per cent for companies with turnover under $50 million and 30 per cent for all others. It also called for a new 5 per cent tax on net cashflow rather than profits, which could see some large companies pay a higher rate but would provide immediate tax relief for smaller companies seeking to build their capital.
News.com.au
10 minutes ago
- News.com.au
ACTU boss Sally McManus calls for five-year plan to limit negative gearing, CGT concessions to one investment property
Union boss Sally McManus has urged Labor to 'bite the bullet' and slash tax benefits for Australians with invest properties through a five-year plan which would only allow people to access the tax incentives on one home. Speaking to the ABC, the Australian Council of Trade Unions (ACTU) secretary said the changes were needed to tackle intergenerational inequity and calm soaring house prices which have locked young people out of the market. Under the ACTU's proposal, which will be debated at the Jim Chalmers' Economic Reform Roundtable in August, both negative gearing and capital gains tax concessions would be limited to one investment property. Current conditions would be grandfathered for the next five years for existing homes 'to allow people to adjust'. The move would also annually add about $1.5bn to the budget, or $6bn over the forward estimates. 'One of the biggest issues in terms of living standards for younger people in Australia is the issue of housing affordability. It's the number one issue. We need to address it,' Ms McManus said on Sunday. 'Young people should have the same aspirations as the generations before them, and at the moment, then don't. It's been wiped out by the fact that the housing prices have gone up twice the rate of wages over the last 25 years.' She said the provisions would target the 'small number of investors' who own '25 per cent of investment properties'. Ms McManus quoted a study from the NSW Productivity Commission in 2024, which found the state was losing about 7000 people aged between 30 to 40 years old a year - something that could result in Sydney being a city with no grandchildren. 'That has been driving or fuelling the housing prices. I don't think that we ever intended even for this to happen as a result of these tax measures but this is where we're at,' she said. 'Unless we change it, unless we change it, working people can't live where they work. They can't live where they grew up.' Asked whether Labor had the political will to enact the changes, she urged Labor to 'bite bullet' and be 'brave enough to do something about it'. It not, they would be at risk of 'abandoning' the younger generations,' she added. 'We're going to go and argue it. We're going to advocate for it. In the end, the Government will make their decisions based on what they think is the national interest. We would say that it is in the national interest,' she said. Previously, Labor has unsuccessfully taken changes to negative gearing and capital gains concessions to the 2016 and 2019 federal elections under former opposition leader Bill Shorten, before Anthony Albanese ended the policies.
News.com.au
10 minutes ago
- News.com.au
Shocking Sydney grandchildren claim if negative gearing continues unchanged
Treasurer Jim Chalmers is being urged to 'bite the bullet' and tackle tax breaks for landlords amid a wild warning there won't be any grandchildren left in Sydney. The bombshell call by ACTU secretary Sally McManus will be taken to the Albanese Government's productivity roundtable, which will be held in Canberra in August. Warning families can no longer afford to buy a home, unions want the Prime Minister and Treasurer to announce a huge backflip that will change the way negative gearing works in Australia. Under the plan, the tax breaks will be limited to one property only by 2030, which could force a massive sell-off of investment properties. Negative gearing allows landlords to deduct losses on a property – when expenses exceed rental income – against their taxable income. It can apply to any type of investment, not just housing. Individuals who are negatively geared can deduct their loss against other income, such as salary and wages, and it's entirely legal. Critics argue that negative gearing hurts first-home buyers because they don't have access to tax deductibility to subsidise interest payments. 'I just say, we've got to bite the bullet,' ACTU secretary Sally McManus told ABC's Insiders on Sunday. 'Otherwise, we're just saying – too bad young people, you're not going to be able to ever own a home, forget about even thinking about it. 'Since 2019, the problem has just got worse. It's going to continue to get worse unless the government is brave enough to do something about it. We are just abandoning those generations and we think that that is fundamentally wrong.' Ms McManus said the biggest issue in terms of living standards for younger people in Australia is the issue of housing affordability. 'It's the number one issue. We need to address it,' she said. 'Young people should have the same aspirations as the generations before them. And at the moment, then don't. 'It's been wiped out by the fact that the housing prices have gone up twice the rate of wages over the last 25 years. Twice the rate. 'Now, supply is part of that issue and we've got proposals around that. But we also think that the tax system has to change, too. Because that has fuelled those housing prices and taken it out of reach for young people.' 'We're going to take a proposal that both negative gearing and capital gains tax should be reformed,' she said. 'That they should be limited to one investment property and grandfathered for the existing arrangements for five years to allow people to adjust. Ms McManus confirmed that under the union proposal, after that, you can only have one negatively geared property. 'Yes. And so, you can have as many investment properties as you want, but in terms of the tax benefit, limit that to one,' she said. 'The issue is that a small number of investors, and we're talking about 1 per cent of investors, own 25 per cent of the investment properties. 'And that has been driving or fuelling the housing prices. And so, I don't think that we ever intended even for this to happen as a result of these tax measures. But this is where we're at. 'Unless we change it, working people can't live where they work. 'They can't live where they grew up. It is causing an enormous amount of pressure on people and a really disturbing thing is that a study in New South Wales said that there will be no grandchildren in Sydney because people between the ages of 30 and 40 can't afford to live there. Ms McManus also called on the government to 'get behind modular housing.' 'It's quicker and faster and cheaper in terms of producing those houses,' she said. 'Also, the rules around superannuation funds investing in housing are too limiting. And that's holding back investment in housing as well.' The Treasurer has opened the door to a broader debate on potential tax changes at the government's economic reform summit. 'I expect, I anticipate, I welcome tax being an important part of the conversation,' Mr Chalmers told reporters in an address to the National Press Club. But Anthony Albanese has repeatedly pushed back on the wisdom of negative gearing reforms, hinting that it could increase rents by not boosting housing supply. Economists warn that reforms to negative gearing could put modest downward pressure on housing prices, a boost for first-home buyers. Some experts believe that reducing the incentives for investors could reduce home prices by 2 to 4 per cent in the medium term if negative gearing reforms are combined with capital gains tax changes. But the flip side is that increasing taxes on property investors could deter investment in new apartments and homes, ensuring that the undersupply of houses that is driving soaring rents only gets worse. 'Well, when it has been looked at, it's been shown that it won't assist supply, and that's the problem here,' Mr Albanese said last year. 'For many people, of course, if you didn't have investment in housing, you wouldn't have private rentals, you would have less supply, and less construction is the concern which is there. 'Look, my view is that the key to housing policy is supply,' he said.
