Doorstop - Canberra (1)

24 February 2016



SUBJECT/S: Government’s Economic Policy Shambles; Negative Gearing and House Prices

JIM CHALMERS, SHADOW MINISTER FOR FINANCIAL SERVICES AND SUPERANNUATION: Well, another day, another economic policy shambles from the Turnbull Government, this time on negative gearing and house prices. We've had months of chaos and confusion from the Turnbull Government when it comes to economic policy - particularly tax policy, superannuation policy, and specifically this week on capital gains and negative gearing. 

The Prime Minister's scare campaign on house prices is falling down all around him. Today we've had a Cabinet Minister - one of his own colleagues - completely torpedo the very basis of his scare campaign on negative gearing and house prices. We saw in black and white in this transcript from this morning two different Cabinet Ministers - two members of the Cabinet - within two hours, with two directly opposing views about the impact of negative gearing changes on house prices in this country.

Kelly O'Dwyer said about the Labor policy on negative gearing "they've got a policy that will increase the cost of housing for all Australians, for those people who own a home and for those people who would like to get into the housing market".

The same morning, her Prime Minister said "Labor is proposing a massive shock and it will have inevitably, will have the result of cutting housing prices".

Two very different views within two hours of each other.  The Assistant Treasurer has completely torpedoed the very basis of the Prime Minister's scare campaign.

Now Malcolm Turnbull doesn't have an economic plan but he knows he wants a scare campaign about housing prices. He just can't decide which scare campaign they want to run.

Malcolm Turnbull and Tony Abbott - neither of them could run a Government, but at least Tony Abbott could run a scare campaign.

What we have here is all of this confusion, all of this fumbling and flailing and stumbling around in a haze of economic policy confusion in this country.

In the same interview with Kelly O'Dwyer this morning - that awful interview in which she talked about house prices being pushed up by negative gearing changes at the same time as Malcolm Turnbull talks about them being pushed down - Kelly O'Dwyer was even confused about whether there was confusion.  In two consecutive answers, Kelly O'Dwyer - the first one "Sam, there hasn't been confusion". The next answer: "Well, there's been confusion I suspect because there's been a lot of speculation." When you have a Cabinet Minister who is confused about whether there is even confusion, that gives a sense of the sorry state of affairs in the Turnbull Government. 

We are two-and-a-half years into this term of government. What we've got so far is more debt, more deficit, a higher unemployment rate, we've got all of this chaos and confusion, but we've got absolutely nothing which resembles an economic plan for the future of this country. 

Labor has been filling the void. We've got detailed, costed policies on the table which will boost housing supply, level the playing field between investors and first home buyers, create construction jobs, fund health and education, and underwrite the future of this country.

JOURNALIST: (inaudible)

CHALMERS: Well we've got very specific analysis from independent experts like Saul Eslake and Richard Holden which say that under our policy, what we would expect to see is more sustainable house price increases. The reason that we won't have a fall in house prices is that, according to those two very well-regarded independent experts, is because our policy has a long lead time, it's not implemented until next year and it's not retrospective. Those are two very important factors which mean while we'll still see house prices increase in this country; they'll be more sustainable because more of that speculation will be taken out of the housing market.

At the same time as we've got a very clear view, backed up by the experts as you say - we've got a Prime Minister and a Cabinet Minister who can't agree whether our negative gearing changes will go up or down. Kelly O'Dwyer has torpedoed the very basis of the Prime Minister's dishonest scare campaign today. They can't decide what the impact of our policy will be. Is it any wonder that they can't come up with any economic policies of their own?

JOURNALIST: (inaudible)

CHALMERS: It's true that the housing market is patchy around the country and that we see different levels of growth around the country, but our policy for the nation is a good one because it will still see sustainable house price increases based on the fact that it's retrospective; our policy is retrospective and it doesn't come in immediately. We expect the same sort of impact around the country, even in those different housing markets. Every time Malcolm Turnbull opens his mouth about housing, he loses credibility. Particularly today, having to work back or to try and contradict this outrageous mess that they've got themselves in.

I mean, we've had Kelly O'Dwyer rush out this humiliating statement a little while ago trying to say - look, I was only talking about new housing and all the rest of it - when very clearly, she said of our policy that it will "increase the cost of housing for all Australians, for those people who own a home, and for those people who would like to get into the housing market". So all of this commentary from the Prime Minister and Kelly O'Dwyer is really all about a desperate, dishonest and unhinged scare campaign which has fallen down all around them.

JOURNALIST: (inaudible)

CHALMERS: We've said today that we will go through the detail of the defence white paper when it is released and when it is available publicly. We've seen the stories today.  Others including my Leader have commented on that, and I don't really have anything to add.