Labor tax hikes to bite workers

The Australian

18 February 2019


Policy by policy, Josh Frydenberg is slowly but surely enlightening voters about how much the opposition’s tax changes would cost them. From retirees’ loss of franking credits and a higher marginal tax rate to super changes and a crackdown on capital gains and negative gearing, hundreds of thousands of Australians are realising they stand to be disadvantaged by thousands of dollars or more a year.

Given current property price trends, especially in Sydney and Melbourne, real estate investors do not need further dampeners.

At the very least, Bill Shorten and Chris Bowen owe it to the public to reveal when their planned hike in capital gains tax and negative gearing restrictions would take effect. They should also state if they would factor in the state of the property market before proceeding with their property tax grab, or even delay it until conditions improve.

As reported today, the Treasury has crunched the numbers, finding more than half a million taxpayers aged from 45 to 59, with an average rental loss of $9500, would be hardest hit by Labor’s housing tax.

The Treasurer is correct when he says workers approaching retirement face a double whammy under the opposition. Those who own homes or who have invested in rental property would find their assets worth less. Those renting would pay more. And those who have invested in shares would earn less through the loss of franking credits.

Aside from creating widespread personal hardship, such policies would discourage workers from being thrifty to ensure they are self-supporting in retirement, rather than relying on taxpayer-funded pensions.

The divisions between the major parties on tax and encouraging workers to keep more of their hard-earned money for retirement are stark. The question for voters is how widely they are prepared to open their wallets to fund Labor’s profligate social programs.