THURSDAY, 1 NOVEMBER 2018
SUBJECTS: Housing, Labor's plans to crack down on multinational tax avoidance, Adani.
TIM SHAW: The Master Builders Association is deeply concerned, big impact on the ACT economy. Now Labor complained about the Master Builders not including the grandfathering elements to the proposition regarding changes to negative gearing, now you will grandfather negative gearing on an existing property, but will you grandfather the current 50 percent capital gains tax discount?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Yes absolutely Tim. The changes are prospective. We recognise that people have made investments based on existing rules.
SHAW: That is great news and to be frank Andrew, I didn't see that, hear it from those that have been talking about it so you can confirm today that not only will that property on Northbourne Avenue that I currently negatively gear, I'll still be able to have grandfathered the 50 percent capital gains tax discount if Labor are able to form a government?
LEIGH: That's right Tim. We're making a prospective change. These are important changes for the Australian community. The home ownership rate now is as low as it's been in six decades. Young Australians are being beaten out at auctions Saturdays around Australia. I've spoken to a young couple, a teacher and a police officer in Gungahlin at one of my street stalls, and they said "how are we meant to break into the property market, Andrew? How are we meant to save enough in order to get into the property market particularly if one of us might want to take some time off work when we have a child?" That isn't the great Australian dream. We are losing that, Australia’s home ownership rate is now amongst the lowest third of the rich world. It just shouldn't be this way. But we've got ourselves into this pickle in part because of these uniquely generous tax concessions for housing investors, which allow them to crowd first home buyers out of the market.
SHAW: Do you feel though that with the so-called bubble busting in the Sydney and Melbourne property markets we've already seen a slowing of that investor interest there? Is it because of Labor's prospective changes to negative gearing? That could be in the back of their mind as well. But an interesting question. Banks of course, as you know have -
LEIGH: Well hang on, let me answer the first question before you ask the second one. Prices have indeed come off a bit in Sydney and Melbourne as they came off in Perth a couple of years ago. But our policies are not about trying to smooth the ups and downs of the property cycle. That'll always be there. We're about re-balancing the market toward first home buyers. Frankly, the Liberals used to care about this. They used to be the party of home ownership for all. And now they've become the party of property investors. That's a sad state of affairs.
SHAW: Can we talk about the party of property investors, the ACT Labor party has been building a billion dollar investment in the tram, it's a very important infrastructure measure but critics are saying that this is really only going to benefit the property developers. We've got higher costs of land here in the ACT because of the limited land release. So I guess as a federal representative of Canberrans, you'd be wanting more land to be released that was more affordable for Canberrans to realise that home dream?
LEIGH: Tim every time you invest in better public services that has a positive effect on house prices. If you didn't want to ever drive up house prices, you'd never improve street lighting, build parks, improve public infrastructure in the way ACT Labor has. We believe that light rail is a really important development in order to ensure that we have less traffic congestion on our roads. It parallels the building of the Majura Parkway: a collaboration between the ACT Labor government and the Labor federal government. It took a lot of pressure off traffic on northside roads.
SHAW: Yeah that infrastructure does need to be paid for, we've had an increase in local rates. You're a rate payer, you've seen your rate bill go up. Andrew Barr says to me Tim, we need to. We're not a state government, we're a local government and we've got to raise those taxes to be able to fund these issues. Talking about taxes Andrew Leigh, we've got so many different taxes - the GST, the income tax, the fuel excise. How can we make the tax system more efficient and do we need effectively some form of evaluation of our total tax system? I know Dr Ken Henry gave it a crack. What do you reckon needs to happen under a future Labor government?
LEIGH: Many of the tax policies that we've announced have been around improving the integrity of the system, closing off tax loopholes such as negative gearing, the 50 percent capital gains tax discount, tax concessions that allow people to split income using trusts. Removing the refundability of dividend imputation, something that only Australia has, no other country does things that way. We're closing multinational tax loopholes, which allow companies to use debt deductions to shift profits offshore. Yesterday we announced we shut down a loophole that allows multinational groups to write off bad debts internally. We're cracking down on the use of tax havens which are another tax loophole used predominantly by the super rich. So a lot of what we're doing is trying to improve the integrity of the system, as you say, make it simpler and whole lot fairer.
SHAW: Just two quick ones, Ron from Charnwood says "good morning Dr Leigh, do you have any investment properties here in Canberra?"
LEIGH: I don't Ron.
SHAW: Thank you, good feedback. Finally the 48th federal Labor Conference is big, 16th to 18th of December. Will Labor we saying yes or no to Adani?
LEIGH: The Adani project depends primarily on state environmental approvals. I don't think it's stacked up so far environmentally or economically. We've seen a drop off in coal demand globally, indeed India is demanding less coal right now. Labor has said that we didn't want to give it federal cash, at the time the Coalition wanted to swing one billion dollars of taxpayer money to an Indian coal billionaire. We'll be scrutinising it rigorously, but it is important for those holding those anti-Adani placards to remember that the Environment Minister is the decision maker under the Act. If Tony Burke, the Shadow Environment Minister, were to come out today and say he'll oppose Adani under any circumstances, he'd basically be opening up the federal government to a large compensation claim from Adani. He needs to scrutinise the Adani proposal according to the Act, and I'm sure he'll do that if we're elected.
SHAW: Thanks so much for being there we appreciate your time.
LEIGH: Thank you Tim.
Authorised by Noah Carroll ALP Canberra