Negative gearing: Confusion surrounds Government’s position as Chalmers hints at who ordered advice

Confusion surrounds Labor’s position on negative gearing after Anthony Albanese again refused to rule out future changes, as Treasurer Jim Chalmers appeared to confirm the Government ordered the modelling that ignited the political storm.

Mr Albanese capped off a messy week with another round of vague and noncommittal answers when pushed on the Government’s plans for the tax breaks.

Just a day after confirming Labor wouldn’t be taking policies to wind back the concessions to the next Federal Election, due to concerns they would reduce housing supply, the Prime Minister refused to shut the door on adopting changes after that.

Asked if negative gearing would be left untouched before and after the election, Mr Albanese pivoted to talking about Labor’s existing $32 billion housing agenda – key parts of which are stalled in the Senate.

“Just for clarity, what we are doing is what we have before the parliament,” he said on Friday.

Mr Albanese and Treasurer Jim Chalmers this week confirmed Treasury officials modelled changes to the tax write-offs but have refused to explicitly confirm who sought it.

Mr Albanese on Thursday implied Treasury undertook the modelling on its own volition when he said the public servants were not “school children with teachers up the front of the class telling them what to do”.

“Treasury don’t need to be directed,” he said.

But speaking in Beijing on Friday, Dr Chalmers seemingly confirmed the Government requested the work – without explicitly saying so.

“When then it comes to negative gearing changes, it is not unusual at all for governments or for treasurers to get advice on contentious issues which are in the public domain, including in the Parliament.

“It is not unusual for treasurers to do that,” Dr Chalmers said.

Shadow treasurer Angus Taylor seized on the comments, saying either Mr Albanese lied or Dr Chalmers kept it secret.

Dr Chalmers repeated his line earlier this week that the Government had an ambitious housing agenda and changes to negative gearing and capital gains tax “aren’t part of it”.

“We’ve made it clear our policy is to boost supply,” he said.

“Our policy is to invest $32 billion in that effort. And these changes (to negative gearing), which we get advice on from time to time, because they’re in the public domain or they’re in the parliament, they’re not part of that policy.”

The question of who requested the modelling is significant because it goes to how serious Labor is about resurrecting some version of the policies Bill Shorten took to the failed 2016 and 2019 elections.

Treasury officials are constantly modelling policies as part of its routine work overseeing the national economy.

But if they were specifically instructed by the Government to examine negative gearing changes among options to tackle the housing crisis, that would suggest Labor is genuinely open to it.

The bombshell decision to re-jig the stage three tax cuts sprung from Treasury advice which Dr Chalmers ordered late last year as the Government searched for answers to the cost-of-living crisis.

WA Treasurer Rita Saffioti said leaving negative gearing untouched was the right move.

“We need more housing supply in this state and we don’t want to change any settings that would have an impact on housing supply,” she said.

“We want to make sure we continually put more money into housing and making sure that we continue to incentivize those who build or invest in housing in Western Australia.”