Coalition backbenchers intend to push the Government to start playing “the rule in rule out game” — because they are frustrated they are in the dark on its tax plans.
Prime Minister Malcolm Turnbull is attacking Labor’s negative gearing plan but he has not ruled out that the Government might itself move on some aspects of negative gearing.
- PM has not ruled out that the Government might move on some aspects of negative gearing
- A bloc within the Coalition wants Mr Turnbull to rule out changes to negative gearing
- Superannuation is now emerging as the most likely option for the Government to find savings
He said there would be some details before the budget, but some of his MPs are planning to press for more clarity this week, especially on negative gearing.
One MP has told AM: “We don’t know what is going on.”
Coalition backbenchers are restless. One MP expects Treasurer Scott Morrison to give an update this morning when he meets the Coalition’s Economics Policy Committee, especially on whether negative gearing will be changed.
Others said negative gearing would come up in tomorrow’s party room meeting.
WA Senator Chris Back argues it should stay untouched.
“I don’t see any reason at all to change the negative gearing processes,” he said.
“A very significant number of moderate income people in our Australian community negatively gear property and I think it is a very sound investment.
“The vast majority of people I’ve spoken to have said we are better to leave negative gearing on property where it is and see it for what it is, and that is just simply a business investment which over time if it makes a loss greater than a profit, the difference is tax claimable.”
A bloc within the Coalition wants Mr Turnbull to move quickly to rule out changes to negative gearing.
Senator Back said the timing was up to the Prime Minister.
“The Prime Minister doesn’t need to be spooked by the Opposition or by commentators into what his position and our position is going to be,” he said.
” I would hope that we would see some further information and enlightenment sooner rather than later, particularly on the expenditure side of the ledger because that is an area that needs to be very, very strongly and strictly controlled and I think we need to bring expenditure back under control.”
He acknowledged tough spending cuts were politically difficult for the Coalition in the 2014 budget.
“I think by the time we came to the budget in 2014 we had not sufficiently done the groundwork necessary to have the Australian community understand where the Government was going,” he said.
“I don’t want to see such a vacuum occurring now. I would firstly be taking the Australian community into our thinking in terms of expenditure.”
With strong Coalition pressure to leave existing negative gearing rules in place, superannuation is now emerging as the most likely option for the Government to find savings, in particular a plan that would see some people pay a higher rate on the money they contribute to their super.
Instead of all contributions being taxed at 15 per cent — people would pay their normal tax rate with a 15 per cent discount.
That is estimated to raise about $6 billion a year that could fund some personal income tax cuts.