The Australian Greens have conditionally agreed to support the Australian Government's new 'help-to-buy' housing initiative but have leveraged this support to demand property investment tax concession reforms.
The minor party trained its crosshairs on negative gearing tax relief and the 50% capital gains tax (CGT) discount, relied on by many Australian investors and popular with a large swathe of the electorate.
Government to cover costs
The 'help-to-buy' scheme, designed to assist first-home buyers by allowing them to make a minimal deposit of 2% and the government covering up to 40% of the home's cost, will be debated in the lower house this week.
While they support the policy in principle, the Greens have raised concerns that it may inadvertently inflate housing prices further and only benefit a fraction of eligible buyers, estimated at 0.2% annually.
Greens' housing spokesperson Max Chandler-Mather said: "This scheme establishes a cruel lottery where only 0.2% of renters will get it every year, and for the other 99.8%, house prices will go up."
He argued for the phasing out of negative gearing and capital gains tax discounts, advocating for the redirection of funds towards public housing development.
The contentious negative gearing policy allows property investors to deduct losses from their income tax, which critics argue exacerbates housing affordability issues.
The Greens have long argued that eliminating these tax breaks could level the playing field for renters competing against investors in the housing market.
No plans to revise CGT, negative gearing
The government, however, has shown reluctance to amend these policies, with Treasurer Jim Chalmers saying there are no current plans to revise negative gearing rules.
Unsurprisingly, the stance is mirrored by Shadow Treasurer Angus Taylor, who reiterated the Liberal Party's opposition to such changes.
Despite governmental hesitation, independent senators David Pocock and Jacqui Lambie have expressed openness to the policy on the table, potentially giving the government the necessary support for reform.
Brendan Coates from the Grattan Institute has been a key advocate for reform, highlighting a potential annual saving for the country’s coffers of $7 billion through adjusted tax breaks.