Housing Minister Clare O’Neil grilled on rental fears sparked by Capital Gains Tax changes

Housing Minister Clare O’Neil has refused to answer why Australians are reporting substantial rent hikes despite Treasury estimating an average increase of $2 per week after Labor announced sweeping changes to the capital gains tax and negative gearing.

Treasurer Jim Chalmers confirmed last week the Albanese government would wind back both tax concessions as part of efforts to democratise Australia’s housing and tax systems.

The CGT model will revert to favouring inflation indexation across all asset classes, with a one-year grace period before taking effect. The tax break delivered by negative gearing will be restricted to newly built homes from July next year.

Mr Chalmers said Treasury estimated the changes would increase rents by $2 per week.

But Seven’s Sunrise host Nat Barr claimed viewers had already started to report weekly rent increases in excess of $20, less than two weeks after the Treasurer handed down the May 12 budget.

“You reckon Treasury’s right?” Barr asked Ms O’Neil on Wednesday.

The Labor MP responded by saying Treasury’s figures were backed by respected economist Saul Eslake and the Grattan Institute among other key voices in the sector.

She was repeatedly interrupted by Nationals senator Bridget McKenzie, who accused the government of “hiding” behind the figures.

Barr pressed Ms O’Neil again, asking: “(Rent is) already going up … this is what Sunrise viewers are saying. Do you reckon the modelling is wrong?”

Ms O’Neil responded by saying she was “really respectful” of people’s experiences.

“But I just repeat to you that for anyone who is in a rental right now, that’s being provided by an investor. The arrangements for negative gearing for those people are grandfathered,” she said.

Senator McKenzie later interjected again to accuse Labor’s migration and fiscal policies of fuelling the housing crisis.

“When you pour in two million people, they need somewhere to live,” she said, before Barr cut her off by saying: “Hang on, Bridget.”

The Sunrise host then turned to Ms O’Neil to ask if the reason behind the rent hikes could be because of Labor’s approach to migration and spending.

“Well, that appears to be what Bridget is saying,” Ms O’Neil said.

The Labor MP earlier ruled out condemning landlords for the apparent rent hikes, saying she would not tell landlords or renters “what to do”.

The changes to tax concessions broke a key election promise after Prime Minister Anthony Albanese vowed ahead of last year’s federal election not to touch CGT and negative gearing settings.

A March Senate inquiry into the CGT discount found it skewed home ownership towards investors and disproportionately benefited wealthier Australians.