Dutton: PM, Treasurer are ‘at war’ over negative gearing changes

Peter Dutton has claimed the Prime Minister and his Treasurer are “at war” with each other over potential changes to negative gearing and capital gains tax concessions that have divided Labor MPs.

The Opposition Leader ruled out supporting any reforms, declaring there was a “growing divide” between Anthony Albanese and Jim Chalmers after it was revealed Treasury had been examining tweaks to the tax breaks.

“It’s very obvious that there is a growing divide between the Treasurer on one hand, and the Prime Minister on the other. And those teams seem to be at war with each other,” Mr Dutton said on Thursday.

“And when the Labor Party is focused on internals and fighting against each other, and positioning about who will be the next leader of the Labor Party, Australians are the ones who miss out.”

After first declaring it “wasn’t Party policy” — in statements reminiscent of Labor’s rhetoric before it ripped up the old stage three tax cuts — Mr Albanese hardened his language on Thursday morning.

He insisted Labor was not planning to take such a policy to the next Federal Election, but has not denied the modelling exists or that such changes could be made in the future.

The Prime Minister has insisted he didn’t request the work, but conceded he doesn’t know if Dr Chalmers did.

“Treasury doesn’t need to be directed. They’re not school children with teachers up the front of the class telling them what to do,” he said.

In a press conference on Wednesday, before he departed for China, Dr Chalmers said it was “not unusual for the public service to examine issues that are being speculated about in the public or in the Parliament”.

The Labor caucus is split over whether to revisit a version of the policies Bill Shorten took to the failed 2016 and 2019 election, with at least half a dozen backbenchers open to a debate as pressure mounts on the Government to do more to tackle the housing crisis.

But other Government MPs, including senior ministers, want the idea to remain firmly off the table.

One senior Labor minister said changes to negative gearing were “absolutely not on the table, and never have been”, adding that was the “right approach”.

Mr Dutton also accused Dr Chalmers, who is currently in Beijing for bilateral meetings, of running away from questions about “a policy that he’s commissioned”.

He also denied calls from some of his own backbenchers to consider making changes to negative gearing, instead branding it a “new tax”.

“We will take a very strong stance against any changes to negative gearing, because it will disrupt the housing market, it’ll drive up rents, and it’s not in our nation’s best interests,” he said.

Appearing at the National Press Club on Thursday, former Liberal Treasurer Joe Hockey reaffirmed his long-held view that negative gearing should be “skewed” to new homes to encourage more construction.

Mr Albanese remains unconvinced that changes to negative gearing won’t reduce housing supply — the main aim of Labor’s $32 billion housing agenda.

Property Council-commissioned analysis into Labor’s 2019 proposal warned of a 4.1 per cent cut to the housing pipeline, costing 7800 jobs and $1.5 billion hit to GDP.

The changes modelled by Treasury reportedly differ from Mr Shorten’s plan and including a cap on the number of properties an individual can negatively gear.

“Will it (changing negative gearing) add to supply or will it decrease supply? The figures and research that has been produced by organisations like the Property Council indicate that it would reduce supply and therefore not contribute to solving the issue. And that’s the issue,” Mr Albanese said.

Mr Albanese’s denials about possible changes to negative gearing and capital gains have drawn comparison to his language prior to overhauling the stage three tax cuts in January.

After months of insisting the Government’s position was unchanged, the Prime Minister proceeded to break a key election promise by redesigning tax cuts in favour of middle-to-low-income workers.

In an interview with Sky News, Mr Albanese was pushed on whether he had “lied” or been “deceptive” with his rhetoric.

“Well, if I did so did Peter Dutton because they voted for it,” Mr Albanese said.

Shadow treasurer Angus Taylor said Labor’s answer to the housing crisis was to “start a fight with mum and dad investors in the home”.