The Federal Labor Party is looking at turning its attention to negative gearing as an attempt to boost the Budget bottom line.
The ALP has received cautious support so far for its plan to lift superannuation taxes on wealthy Australians.
Shadow treasurer Chris Bowen said negative gearing wouldn’t be completely abolished by either Liberal or Labor, but has proposed changing the system to save the Federal Budget over $4 billion a year.
“It would be irresponsible to rule out going to the next election with changes to, for example, negative gearing,” he said.
“I have said our principle will be do not disadvantage people who have made investments in good faith under current rules. Two, do not risk reducing the supply of new housing or, if possible, improve the situation with the supply of new housing.”
Latest figures show that the 1.2 million Australians that use negative gearing to claim tax on their rental properties claimed net losses of $14 billion in 2011-12.
The move from Labor would be part of a wider approach to improve the Budget bottom line, including a crackdown on multinational company tax evasion.
Mr Bowen’s proposals would essentially allow existing people that use negative gearing to continue to do so, while restricting the number of new homes in the future that people could use to reduce their tax burden.
Mr Bowen said Labor would deliver the measures well before next year’s Federal election.
“Labor will have more savings than new spending over 10 years, which will constitute a credible fiscal plan,” he said.
Treasurer Joe Hockey said he would look at Labor’s proposals.
“We’re always sceptical of announcements from Labor but I’ll have a look at the details,” he said.
