A strong and sustainable budget is necessary so we can fund our priorities of health and education and underwrite our nation’s future.
Our Budget will not be sustainable or strong until our tax system is fairer and more efficient.
Right now, parts of our tax system are acting as a drag on growth with negative gearing and capital gains tax subsidies costing taxpayers over $10 billion every year.
That’s why I announced this morning that Labor will reform negative gearing and the capital gains tax discount to ensure that our tax system is fair, sustainable and targets jobs and growth.
Under a Shorten Labor Government, negative gearing will only be available from 1 July 2017 for newly constructed homes. All current investments — and any made before this date — will not be affected by this change and will be fully grandfathered.
This plan will help level the playing field for first-home buyers, whilst ensuring investors currently accessing negative gearing will be no worse off. It will put the great Australian dream back within reach of working and middle class Australians, who have been priced out of the market for too long.
Can you share this graphic about Labor’s plan to pay for health and education by tackling tax subsidies?
And to improve the efficiency and fairness of our tax system, the capital gains tax discount will be reduced from 50 per cent to 25 per cent. 70 per cent of these tax subsidies are being used by the top 10 per cent of income earners. These subsidies are not working as they should and in many cases, the system is being gamed by those who can afford to minimise their tax.
Together, these decisions will save $32.1 billion dollars. It will also put fairness back into the housing market. It will encourage the building of thousands of new homes every year and increasing housing supply. It will help lower costs for renters.
There’s no doubt that vested interests who have become accustomed to these tax subsidies will campaign hard against our plans. I need you to help take up the fight to so we can make the system fairer.
I’m proud that today’s announcement means Labor doesn’t just have plans to improve education and health — we have plans to pay for them.
Thanks for standing with me on this,
PS You can read more about our plan to limit negative gearing to new homes and putting fairness into the market right here.