Scott Morrison scoffs at $100 million negative gearing claim
Treasurer Scott Morrison has scoffed at so-called economic modelling which showed a proposal to cap negative gearing deductions would raise less than $100 million a year, in a confirmation the government is still looking at the option despite a rising backbench revolt.
"I hope the Daily Telegraph didn't pay too much for that advice," he said of the newspaper's claim about how much a $20,000 cap would raise.
"We're continuing to consider all the options."
Last week, The Australian Financial Review reported the government had modelled caps of $20,000 and $30,000 and was surprised by the amount of money which would be raised. It is understood the latter option would capture 5 per cent of negative gearers.
At this stage, Mr Morrison and Mr Turnbull are hoping to fund tax cuts using increases to superannuation taxes, supplemented by changes to negative gearing and tax deductions.
But Mr Morrison and Malcolm Turnbull are under pressure from a growing number of backbenchers to dump altogether any plans to touch negative gearing.
The backbenchers argue that any move to cap the annual deduction which can be claimed using negative gearing would muddy any campaign against Labor's policy.
Also, some are opposed on principle, saying it would accept Labor's premise that there was something illegitimate about negative gearing.
Labor has promised that, if elected, that negative gearing after July 1, 2017, would be restricted to new properties only. All existing investors up to that date would be unaffected.
The government is looming at a $20,000 annual cap on deductions from negative gearing. This would affect only those with multiple properties and would apply retrospectively.
Mr Morrison has said previously and frequently the government was looking at the excesses of negative gearing and he stressed on Monday that nothing had ben locked in and the government was proceeding "very carefully".
Backbench pressure
Two more Coalition backbenchers have come out to publicly warn against changes to negative gearing and superannuation tax concessions.
The Turnbull government is planning a pre-budget release of its tax reform plans, likely to include some movement on superannuation and changes to negative gearing. this could include a cap on negative gearing deductions of $20,000 and $30,000.
Queensland LNP MP Luke Howarth says he is concerned about how a shift in policy could lower the value of relatively new homes on the outskirts of capital cities.
"I'm concerned it could lower the price and people that have a first home loan, that do buy out in the outskirts of the capital cities could find their value of their home decrease," he said.
WA Senator Chris Back said this morning negative gearing it should stay untouched.
"I don't see any reason at all to change the negative gearing processes," he told the ABC.
Mr Howarth said he was more concerned about changes to taxes on superannuation, but could be in favour of a 15 per cent flat rate as Deloitte's Chris Richardson's suggested.
"I'm more concerned about changes to Super quite frankly. I'm more worried about that...I think the 15 per cent flat rate around super is not a bad thing," he said.
Mr Howarth also said he would prefer to see a lifetime cap.
"I'm concerned about pushing up taxes on super. I would prefer the government to say well look this is the amount, like a lifetime cap.
"If they're saying oh well everyone can salary sacrifice $600,000 over a lifetime or $1 million or whatever the figure is, I'd prefer them to do that because then if you need to put a whole lot in at the end of your working career you can or you want to put a bit away each time you can as well," he said.
Scott Morrison scoffs at $100 million negative gearing claim
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