The government has rejected a report it will curb capital gains tax concessions for property investors in an attempt to improve housing affordability and boost revenue as budget cuts continue to falter in the Senate.
According to The Australian Financial Review, the policy will be formally announced in the May budget and will not apply to shares and other investments.
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PM has the final say
Malcolm Turnbull has made his views clear on whether there'll be company tax concessions.
The report follows a year of consistent Coalition attacks on the Labor Party's proposal to limit negative gearing and halve CGT concessions, which have been framed as policies that "punish mum and dad investors".
But Prime Minister Malcolm Turnbull and Finance Minister Mathias Cormann dismissed the story.
"Don't believe everything you read in the newspaper. The story on the front page of the Financial Review today is wrong, there is no such proposal before the government," Senator Cormann said.
"The government has absolutely no intention of reducing the capital gains tax discount or making changes to negative gearing.
"The Liberal-National Party Coalition is the party of lower taxes. We want to be able to deliver lower taxes so we can strengthen growth and create more jobs but we do need to get the budget back into surplus."
Mr Turnbull said "we do not support the Labor Party's plans to increase capital gains tax or indeed their plans to outlaw negative gearing".
One change flagged to the capital gains tax would see the concession reduced from 50 per cent to 25 per cent, or a similar amount. An alternative model would see the concession increase the longer the property is owned, reaching 50 per cent after several years.
In recent days, the government has threatened that tax hikes could be necessary to bring the budget into balance and fund the National Disability Insurance Scheme if $13 billion worth of spending cuts continue to be blocked in Parliament.
Treasurer Scott Morrison told Fairfax Media the government would "exhaust every option we have to deal with the expenditure problem we have" and then finalise the 2017 budget measures. The priority is to reduce the deficit and hang onto to Australia's AAA credit rating.Â
According to the Grattan Institute, halving the CGT concession would bring in $3.7 billion a year and have a small impact on house prices.Â
Labor frontbencher Tony Burke said the opposition would look at the proposal "if it's a step in the right direction" and accused the government of hypocrisy and a "scare campaign".
"Be in no doubt you cannot allow the situation to continue where the government is giving more help to somebody buying their tenth home than to a first home buyer," Mr Burke told Sky News.
"Labor has been arguing this now for more than a year. If the government's getting closer to the mark, that's good, but no one should pretend that Scott Morrison emerged with any credibility."
With Tom McIlroy
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