Unions back explosive new crackdown on property tax breaks
In a bombshell move that could shake the property and political establishment, the Australian Council of Trade Unions has backed sweeping tax reforms aimed at breaking the housing affordability deadlock that's locking out a generation of working Aussies.
The ACTU – which represents almost 2m workers – warned the current tax system gives unfair advantages to wealthy investors, locking everyday Australians out of home ownership and pushing up rents and housing prices across the country.
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The bold reform would see a cull of tax breaks for property investors who own more than one home.
ACTU Secretary, Sally McManus, said 'working people can no longer afford to live near where they work and young people are locked out of the housing market and locked into high rents.'
'It's just not right and has to change,' she warned. 'Tax rules around investment properties means investments that could be made in making Australia more productive and growing our economy are locked up in housing.'
'We cannot continue down the same path of giving investors tax supports while owning your own home gets further out of reach for average workers and becomes nearly unimaginable for young people.'
'Limiting negative gearing and capital gains discounts to one investment property, alongside increasing supply will make a big difference.'
She said 'people who have made these investments should also be given some time to adjust'.
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The move comes ahead of this month's Economic Reform Roundtable, with the ACTU to argue that negative gearing housing tax breaks and capital gains tax discounts should be restricted to a single investment property, instead of favouring those with multiple properties, which is locking workers out of the housing market.
All current negative gearing and capital gains tax housing tax arrangements would be grandfathered for five years to give property investors time to adjust to the new single investment property tax limits.
Here's the breakdown of what the unions are backing:
– Limit negative gearing and CGT discounts to one investment property
– Grandfather current tax arrangements for five years
– Cap fuel tax credits for big companies at $20m
– Set a minimum 25 per cent tax rate for individuals earning over $1m
– Apply the same 25 per cent minimum tax rate to family trusts
– Replace the Petroleum Resource Rent Tax with a 25 per cent LNG export levy
– Allow super funds more flexibility to invest in housing
– Speed up approvals for modular housing and green energy projects
National housing campaign Everybody's Home said pressure is mounting on the Albanese government to reform unfair investor tax breaks with the union movement adding to growing national support for change.
Everybody's Home spokesperson Maiy Azize said ending property investor tax concessions was good for housing affordability, wealth equality and productivity.
'This month's economic reform roundtable offers the federal government a critical opportunity to take decisive action on housing and end unfair investor tax breaks for good – it cannot afford to let this chance slip away.'
'These tax breaks most benefit those who don't need it, while the majority of hardworking Australians pay the price. Billions of taxpayer dollars are lost every year to these tax breaks that are making housing more expensive for everyone – and making inequality worse.'
'Ending these tax breaks is a crucial part of the solution. Ending unfair investor tax breaks will take heat out of the housing market and improve the budget bottom line meaning more funds can be spent on productive investments, like building more social housing.'
'Poll after poll shows more Australians are open to winding back investor tax breaks because they know it's unfair and unproductive. We're seeing more politicians, economists, think tanks, unions and other organisations calling for reform.'
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Unions also support getting behind modular housing, which can be quicker and cheaper than using conventional building materials; backed by a faster development approvals' process for new housing and green energy projects.
Australia's super funds can and should do more to contribute to building more homes. The super performance test which acts as a barrier to housing investment should be changed to allow super funds to build more homes.
'Everyone should pay their fair share of tax. The average worker pays more than 25pc in tax, it is only fair the very rich and big business does as well,' Ms McManus said. 'We are supporting a minimum 25pc tax on those earning $1m, a 25pc tax on family trusts and a 25pc export levy on Liquified Natural Gas replacing the broken PRRT. Finally, we need to stop providing unnecessary billions to the big miners through the Fuel Tax Credit Scheme by putting in place a sensible cap.'
ACTU affiliated unions include the Australasian Meat Industry Employees Union (AMIEU), Australian & International Pilots Association (AIPA), Australian Education Union (AEU), Australian Institute of Marine and Power Engineers (AIMPE), Australian Licensed Aircraft Engineers Association (ALAEA), Australian Manufacturing Workers Union (AMWU), Australian Maritime Officers Union (AMOU), Australian Nursing and Midwifery Federation (ANMF), Australian Rail, Tram and Bus Industry Union (RTBU), Australian Salaried Medical Officers Federation (ASMOF), Australian Services Union (ASU), Australian Workers' Union (AWU), Australian Writers' Guild (AWG), Breweries & Bottleyards Employees Industrial Union of Workers WA, Civil Air Operations Officers Association of Australia (Civil Air), Club Managers Association Australia (CMAA), Community and Public Sector Union (PSU Group), Community and Public Sector Union (SPSF Group), Construction, Forestry and Maritime Employees Union (CFMEU), Finance Sector Union (FSU), Flight Attendant's Association of Australia (FAAA), Health Services Union (HSU), Independent Education Union of Australia (IEU), Media, Entertainment and Arts Alliance (MEAA), Mining and Energy Union, National Tertiary Education Union (NTEU), New South Wales Nurses and Midwives' Association (NSWNMA), Police Association of NSW, Professional Footballers' Association (PFA), Professionals Australia, Shop Distributive and Allied Employees Association (SDA), Timber, Furnishing & Textiles Union (TFTU), Transport Workers Union of Australia (TWU), Union of Christmas Island Workers (UCIW), United Firefighters Union of Australia (UFUA) and United Workers Union (UWU).
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