GRIEVANCE DEBATE

Mr RICK WILSON (O'Connor) (12:55): I'm not sure he'd agree with me, but I think 2019 may have been Bill Shorten's finest hour. In the election in May 2019, he took a radical taxation package to the people. There were changes to negative gearing.

Shadow treasurer Bowen, as he was then, threw in double taxation of dividends and franking credits, and the country had a debate. We had a debate on the merits, or otherwise, and history shows those changes were voted down. To Bill Shorten's credit, he took those changes to the people.

They made the arguments. The then shadow treasurer, Chris Bowen, famously said, 'If you don't like them, don't vote for them,' and quite a lot of Australian people took his advice and didn't vote for them. Bill Shorten, as the then opposition leader, at least had the courage of his convictions to take those changes to the people.

Fast forward seven years, and what we've seen from the current government is virtually an identical set of taxation reforms announced in this year's budget speech, which were not taken to the people. There is no mandate. Whatever people may say or whatever opinion polls show, or whatever else, there is only one poll that counts—and that is the poll that you take to the Australian people.

These changes were not taken to the Australian people. Nothing has changed dramatically in the last 12 or 14 months since the last election to justify this 'change of position' that the Prime Minister announced to the Australian people. Housing affordability was difficult leading into the 2025 election.

There is not a great deal of difference today. In fact, in some cities—Melbourne, mainly—the price has come down in the last six months. I don't buy the argument that things have changed so dramatically that it justifies a change in position.

I'll go back to the capital gains tax changes and, more pointedly, the changes to negative gearing. When we had that debate in 2019, quite a lot of interesting information came forward, which I've retained to this day. Firstly, contrary to what many on the other side will have you believe, most people—in fact, 70 per cent of people—who own a negatively geared property only own one.

They're not 'Slumdog Millionaires' who are taking advantage of vulnerable tenants. They are mums and dads, nurses, police officers and people who work on middle incomes who are just trying to build some wealth for themselves and their families for retirement over and above superannuation. The only mechanism those people have to do that is to negatively gear a property, to leverage some of the equity they have in their existing home, to buy a second property and to build some wealth over time.

I absolutely applaud the people in my electorate of O'Connor who are doing that. There are around 17,000 people who own negatively geared properties, and I'll come to the reason they do that in O'Connor in a moment. The reason negative gearing came in—in 1933, a long time ago—was to encourage private investors to invest in housing stock for the rental market to save the government doing it.

The current government seemed quite happy to step in and spend—I think the latest number is $50 billion—in some attempt to replace private sector investment with public housing, which, by the way, is a state, not a federal, responsibility under our Constitution. But the reason negative gearing was brought in, in 1933, was to encourage that private investment.

If you own a negatively geared property or a rental property, you are effectively running a small business. You purchased a property; you've purchased an asset. In many cases, you've borrowed the money to do that.

You then rent that property out to generate revenue and income. That is no different, effectively, to what a large listed company does. They own assets, they borrow money, they generate revenue and they are allowed to deduct the costs of generating that revenue from their income, and that is what they pay tax on.

That is a negatively geared property in a nutshell. The government has said that they will take one business class across the entire economy—the ownership of housing for renting—and take that out of the taxation system that every other small business operates under. That is my first concern.

My second concern is that, in 1985, when a previous Labor government under then treasurer Paul Keating removed negative gearing concessions—if we can call them that; I don't see them as that—there was an absolute drought of investment in rental properties, and we saw rents skyrocket. When rents skyrocket, vulnerable people, particularly those on low incomes, can't afford to pay rents, and we see a massive spike in homelessness as well, which we are already experiencing across parts of my electorate.

The reason I want to raise this issue on behalf of my constituents in O'Connor—and my good friend the member for Lyne is here and will understand this—is that many people who live and work in our electorates are doing so, effectively, on a temporary basis. If you're a police officer who took a financial incentive to go and work in Laverton, you're probably living in a GROH house—a government provided house.

You're looking to your future and your family's future. You're probably going to return to Perth at some stage. Perhaps you're going to move to the coast.

So you need to buy a property. You can live in the government house, but, if you want to set yourself up for the future, you need to buy a property where you can retire. You need to have a foot on the rung of that particular ladder.

Effectively, the government has said: 'Okay, there's a police officer in Laverton who's bought a property in Perth and is renting that property out under the current negative gearing arrangements. In future, the next police officer who goes to Laverton will not be able to do that.' What does that mean for my community? It means it's going to get a lot harder to get the copper to go out to Laverton.

It's going to be a lot harder to get the nurse to go to Kalgoorlie or Leonora or any of those types of places because the financial incentive that they're offered to go to those places is going to be negated by the loss of negative gearing concessions on the property that they will buy. In other country towns where housing is cheap, people want to retire to the coast.

Many people who live in smaller country towns—where, yes, housing is very affordable—will also be looking to invest in a property somewhere they want to retire. They might not want to retire to my home town of Katanning, which is 170 kays from the coast in either direction. Most people I know want to retire to the coast.

The mechanism for doing that is one of the reasons they stay living in an inland country town, so they can take that next step. They can invest in property on the coast. Financially, it works for them because they can set themselves up for their retirement.

That avenue is now going to be cut off for people going forward. Finally, I want to talk about the capital gains tax changes and how those are going to impact people. Young people saving—I've got a daughter who has just started her first job, and she is saving for her first home, but, with inflation running at five per cent and bank interest not quite running at five per cent, she's actually going backwards if she puts her money in the bank.

My advice to her, prior to 12 May, was to invest in stocks and shares and, particularly, exchange traded funds, where, over time, the return is much greater than bank interest. But I can't give her that advice now, because, when she goes to sell those shares that she's accumulated, she will be taxed at her marginal rate without the 50 per cent discount, and that makes it pointless for her to try and save money through that avenue.