The point of Labor’s reforms is to remove a market distortion that has seen house prices in Australia rocket ahead of incomes, pushing many young families into financial stress without increasing housing supply.
That’s the important point to remember in this debate. The $3000 tax refund that a punter might receive this year does not appear magically from nowhere – it’s an income tax reduction that the vast majority of taxpayers don’t receive.
If it boosted housing supply, as it was intended to do, it would help everyone. But it does not.
For rent-seekers, though, it must be held in place along with the capital gains tax concession – not for all those three-grand tax refunds, but to continue pumping up credit growth in the banking system.
That is why the Housing Industry Association and Master Builders have already begun lobbing against the changes. That is why the Australian Banking Association and myriad real estate firms will do the same. That’s why insurance firms, brokers, and financial planners will tip in funds for expensive TV ads.
What is at stake is not $3 billion in tax refunds. It’s the continued growth of a complex web of industries that turn people into interest-streams, and take large salaries and shareholder returns along the way.
They are the rent-seekers and their interests are at odds with those of the majority of taxpayers and the new generation of would-be home-owners who can’t afford to get into the market.
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