THE REAL reason the Albo government is tiptoeing behind the scenes to cut down on negativity, and it has nothing to do with Australia’s housing crisis, writes PETER VAN ONSELEN

So negativity is potentially on the table again as Labor looks to cut another tax break.

We will soon find out whether they have the courage to follow their convictions and strive for change.

Former opposition leader Bill Shorten lost two elections trying to argue for reducing negative attitudes towards investment property.

The second defeat in 2019 was deemed an “unlosable election” before it was duly lost, leaving Scott Morrison in power for three years before losing the 2022 election.

Prime Minister Anthony Albanese tied himself in knots this week trying to rhetorically answer questions about whether his government had asked the Treasury to come up with various ways to cut tax breaks.

The word “salad Or delivered” ultimately suggested no.

Voters and commentators alike are, unsurprisingly, unconvinced by his denials, instead believing that curbing negativity could once again become a viable policy option.

This is because Albo has lied to us before by denying there will be any policy changes.

He did this in response to a question about plans to change the third stage of income tax reductions provided for in the act, just before their change.

Labor did the same, changing the super rules and imposing changes to IR that were not in place at the last election.

Regardless of whether Albo ultimately decides to implement negativity reforms for the next election, we need to show real motivation for even considering this option.

This has nothing to do with increasing housing affordability and availability.

The motivation for reducing negativity is to increase taxes collected by the government while limiting what is perceived as a tax advantage for the wealthy.

The idea that changing to a negative mindset could help solve the “housing crisis” is almost absurd to put into words, but I’ll explain why anyway.

Not only does this not increase supply – which is a real problem when not enough people currently have access to the housing they need – but it also reduces the risk of negative leverage, which will make access to affordable homes even more difficult.

This is because today’s rental investment properties provide places to live for people who often cannot afford to buy. Instead, they rent.

Remove the negative gearing and purchase prices may drop slightly – although this is not guaranteed. However, not enough for many tenants to decide to buy.

However, if reduced negativity causes investors to withdraw from the housing market and move them towards other, more tax-efficient investments, this will leave tenants with fewer options.

Especially if it reduces the number of properties being built, which it likely would.

Many developers create what they sell to investors who buy to take advantage of tax breaks.

If this market dries up, supply may occur.

So we really need to recall the government’s primary motivation here: curbing negativity in order to raise taxes and ideologically oppress wealthy investors.

It’s just that many people who have a negative attitude towards investment properties are not that wealthy to begin with.

For example, there is a writer for a left-wing publication who always talks about housing issues but never reveals that her investment property is currently negatively biased.

This is probably a good time for me to reveal that I don’t have any negatively oriented qualities. I invest in other asset classes outside of my family home.

The point, however, is that it is wrong to say that only the wealthy have a negative attitude towards investment properties.

Some do, but most invest their money in plenty of other ways. Many people who have a negative attitude towards real estate are aspiring, not wealthy.

I have no philosophical objection to reforming negative gearing rules and believe that the ability to own a large number of properties (rather than just one or two) to reduce your tax liability should be changed.

However, they need to be included in a broader package of tax reforms to improve the full range of ways we tax and spend.

Otherwise, Labor would simply use this change to falsify the real purpose behind it.

Appearing to be fighting the housing crisis when all he is doing is lining the treasury’s pockets in an attempt to suppress aspirations.

If Labor really wanted to increase housing supply, it would do what it promised but hasn’t done yet and cut the sky-high levels of immigration.

It would also strike deals with state governments to free up more of the housing supply, i.e. land, and find ways to cut the costly and time-consuming red tape associated with new construction projects.

Consideration could be given to reducing negative attitudes towards long-term rentals rather than short-term accommodation.

Thanks to this, such investment properties will be used for residential purposes and not only for holiday purposes.