Labor have presented a range of ambitious promises for this month’s Federal election. The main promise that has sent fear through the property market is their proposed changes to Capital Gains Tax. The polls currently predict a Labor win; however, if this happens, Labor plan to scrap negative gearing for existing properties. They also plan to halve the CGT discount from 50% to 25%. If this happens, it will affect more than 1.25 million Australians who currently negatively gear investment properties. This will quickly lead to higher national rent prices and lower property prices across the board.
Other promises include a further $1.05 billion over four years to increase tax cuts for Australians earning less than $48,000, including a $350 cut for those earning less than $37,000.
Labor says 10 million Australians will get similar tax cuts to what the Coalition is offering, however,, Labor opposes the second and third phases of the Coalition’s tax plan, including the tax bracket flattening.
They are not getting any favourability from the aging population with an announcement to end cash rebates for excess franking credits, which will prevent self-funded retirees from being paid a refund when they don’t pay tax.
The package that pays for Labor’s proposed social spending leaves it vulnerable with older Australians anxious about falling house prices and the impact of tax on a softening economy.
At a time of hesitant economic recovery, Labor is proposing $387 billion in extra taxation and massive new spending programs, which many believe is too ambitious to gain votes.
In infrastructure, if elected, the Labor government has pledged to finance $2 billion of the Melbourne Metro project.
Labor has also pledged to increase skilled migration income threshold from $53,900 to $65,000 per year and to overhaul Australia’s temporary skilled migration system.
They have also announced a $5 billion boost to Northern Australia Infrastructure Facility (NAIF), that had not delivered for regional communities; with $1.5 billion allocated to gas projects and $1 billion for tourism.
The Australian Labor Party has these aims according to their website:
- Fix our schools and hospitals. Restore funding cut by the Liberals and Nationals, to ensure every community has quality public schools and hospitals.
- Ease pressure on family budgets. End the Medicare freeze and give tax breaks to workers, not the top end of town.
- Stand up for workers. Reverse cuts to penalty rates and crack down on abuse of labour hire and 457 visas.
- Invest in cheaper, cleaner renewable energy. Deliver 50% renewables by 2030.
- Build a strong economy that works for us all. Make the top end of town pay their fair share, so we can build new infrastructure and give workers a fair go.