The chairman of real estate company Ray White has said that the newly released Treasury documents on ALP housing policy vindicates the real estate sector’s position, warning that “radical policy” changes “cause more harm than good”.
Speaking after the release of confidential documents from the Treasury department on the impacts of Australian Labor Party housing policy, the chairman of property group Ray White suggested that the Labor policies — such as changes to negative gearing — could have had a dramatic impact on the market.
Brian White said: “These newly released Treasury documents further vindicate the position the real estate industry took during the last election. We all opposed the changes proposed by the Labor Party to negative gearing and capital gains tax.
“Even more important than modelling are historical trends. The only time similar changes to property taxation were previously attempted was under the Hawke government in the mid-80s, [which] resulted in a devastating effect that forced the Labor government to reverse their policy a short time later.
“It was the worst time for property owners since the credit crunch of the Whitlam era, with so many Australians significantly affected in the worst possible way.
“The outcome was so bad, Labor themselves had to revert their own decision after just 18 months.
“These changes were introduced when the property market had been quite strong, so there’s no telling how a second attempt would play out in a market that’s already softening.”
Mr White continued: “The Australian Labor Party should know better than anyone how badly these type of changes would affect our country’s economy, given this all occurred during their term of government.”
The Ray White chairman went on to state that during the election in 2016, the group estimated that more than 10 per cent of all taxpayers use negative gearing, but when property prices fall, it has an impact on the 67 per cent of Australians who own their own home, “not forgetting the 18 million Australians who have a stake in property through their super funds”.
He concluded: “What is clear is that implementing radical policies in this arena doesn’t work and causes more harm than good.
“We have to learn from previous mistakes, and that is the essence of good policy.”
[Related: Cooling property ‘good news for APRA’]
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