Australian renters could be slugged an extra $10 a week under Labor’s housing tax overhaul, with Mark Butler and Jane Hume clashing over claims the Federal Government dramatically underestimated the hit to tenants.
The Health Minister backed Treasury’s modelling during a fiery Sunrise appearance on Friday after some of Australia’s leading property bodies warned rents could rise five times more than the Government forecast.
Master Builders Australia, the Property Council of Australia, the Real Estate Institute of Australia and the Housing Industry Association have united behind modelling examining changes to negative gearing, capital gains tax and self-managed super funds.
The industry analysis suggests rents could eventually rise by about $10 a week, compared with the roughly $2 increase forecast by Treasury, while warning 10,000 fewer homes could be built.
But Mr Butler rejected the industry’s assessment when pressed by Sunrise host Natalie Barr.
“Yeah, I’m very confident,” he said when asked whether the Government’s numbers were right.
“Time and time again we see industry modelling usually from industry bodies who don’t want governments to change anything, any way in which they’re making a profit. Frankly, overstate the position.
“I see it all the time in my own portfolio, so I’m certainly backing the Treasury, Treasury modelling here and just look at the facts.”
Mr Butler said the millions of properties already in the private rental market were protected from the Budget changes, including investors currently using negative gearing.
“Rents have increased by less since the Budget than they did over the same period before the budget,” he said.
But Deputy Opposition Leader Jane Hume accused Labor of being in “denial of reality”, arguing Australians were already feeling the consequences of the Government’s housing policies.
“There’s a trifecta of failures that Labor have overseen in the housing market. Fewer homes are being built, rents are higher, and now there is less investment as well,” she said.
“And the fact that Labor knew that they were pushing up rents when they increased taxes on housing is bizarre in the first place.”
Senator Hume said the latest modelling suggested the impact on renters could be “about five times higher than Treasury anticipated”.
“You can bury your head in those Treasury numbers, but Australians will tell you that their rents are going up, that the approvals for loans are going down and that the market is tanking because of Labor’s taxes,” she said.
The pair then clashed over whether Australians were still borrowing to build new homes, with Senator Hume claiming new home borrowers had “dried up”.
“No one’s buying new homes right now because they know that if they buy something today, the value of that home will go down, not up,” she said.
Mr Butler pushed back, pointing to Australian Bureau of Statistics figures which he said showed lending for new housing was at record levels.
“The Bureau of Statistics says that new loans, new bank loans for new homes, building new homes are at higher levels than they’ve ever been before,” he said.
The escalating political fight comes as housing affordability and cost-of-living pressures remain firmly in focus, with renters now facing competing predictions over exactly how much Labor’s tax overhaul could ultimately cost them.
