Some Labor MPs say the government shouldn’t be afraid of considering reforms to negative gearing, with several caucus members saying they were “open” to fresh and bolder responses to the housing crisis.
But others are wary of reopening a debate lost at the 2019 election, calling for caution amid concerns of an election scare campaign.
Anthony Albanese and the treasurer, Jim Chalmers, have downplayed the prospect of imminent changes to the tax concessions, saying Treasury models many ideas which do not necessarily become government policy.
Privately, several Labor politicians spoken to by Guardian Australia backed having a discussion about change. One government MP, who requested anonymity to discuss the issue, said it would be “ridiculous” to say the government should never contemplate changes to that system.
Retiring Labor MP Graham Perrett, from the Brisbane seat of Moreton, voiced concern about Australia’s housing issues and said it may be time for a “different” approach.
“We can’t keep treating the patient the same way and be surprised that they’re not getting better,” he said.
“My son’s generation is experiencing a housing crisis that’s getting worse. Any good, sensible government would look at policies to enable more homes to be built.”
Labor MP Josh Burns, from the Melbourne seat of Macnamara, said his community was telling him “that it’s really tough and housing is not affordable”.
“We will always look for ways to make this easier and better – and I’m open to solutions if it helps my community,” he said.
The Nine newspapers reported on Wednesday the government had asked Treasury to model potential changes to negative gearing concessions and capital gains tax discounts.
Albanese at a press conference repeatedly declined to confirm or deny whether he was considering reforms, but conceded public servants “do a range of proposals” on potential ideas.
“I’m sure the public service are looking at policy ideas … But we have our housing policy. It’s out there for all to see,” Albanese said in Tasmania when asked about the report.
“I want a public service that is full of ideas.”
In an ABC radio interview, the prime minister claimed negative gearing changes had not been debated “at any level of government”.
The government is not denying Treasury provided a briefing which included options for policy change. Guardian Australia understands Treasury received a request from the treasurer’s office for a briefing on housing, and the response included a wide range of policy options and ideas that had come from various proponents, which included options related to negative gearing and capital gains.
But government sources insist changes to negative gearing and capital gains tax are not being actively considered.
The government has come under pressure from the Greens and crossbench to make changes to the property investment tax breaks, amid speculation that Labor could consider making a bold change as part of their re-election bid.
One Labor MP told Guardian Australia: “I would welcome a fight on housing.”
Another MP noted that the initial Nine report said Treasury had modelled changes to capital gains tax discounts as well, a detail which has attracted less attention. That MP suggested that looking at reducing CGT discounts would fit with Labor values.
Chalmers also did not categorically rule out negative gearing changes from future plans, saying Labor’s current housing policy “doesn’t include that change”. In a press conference, the treasurer said his department “looks at all kinds of Treasury options all of the time”.
“It is not unusual for the public service … to examine issues that are being speculated about in the public or in the parliament.”
Another Labor MP said the government could not simply “resurrect” the Shorten opposition’s negative gearing policy, but suggested the government should look at a fresh set of reforms on the issue.
They said a “bedrock” of any reform, however, must be that no changes would apply to properties already being negatively geared.
A fifth MP said the government was right to seek data and analysis of complex policy areas such as negative gearing, but said Labor should be “cautious” about such changes – noting the policy didn’t attract popular support in 2019.
The MP said they were unsure if Australians had changed their mind since then – but a sixth MP said they thought public mood, especially around the housing crisis, may have shifted and that re-prosecuting the argument could prove successful.
The Coalition responded to the reports by calling any changes to negative gearing “a slap in the face to Australia’s hardworking mum and dad investors”.
Parliamentary Budget Office analysis, commissioned by the Greens, found tax breaks given to investors with more than one property will cost more than $165bn over the next decade.
The Greens’ policy at the 2022 election was to restrict negative gearing to only one investment property, then phase out the concession entirely for properties already negatively geared.
Negative gearing reforms were a Greens condition for supporting Labor’s help to buy housing bill, which is stalled in the parliament. The Greens leader, Adam Bandt, said of negative gearing: “Changing these unfair tax handouts is the kind of reform that could start to fix the housing crisis and see Labor’s weak housing legislation pass the Senate.”
Burns, in comments to Guardian Australia, said the government’s existing housing policies “will help thousands of renters, and help people enter the housing market”.
“It’s mad that the Greens are working with Peter Dutton to block these policies.”
