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Tax Reform, Including Negative Gearing, Is Key To Our Land Of Opportunity

16/11/2015 6:08 AM AEDT | Updated 15/07/2016 12:51 PM AEST
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AUSTRALIA - JUNE 03: Signs advertise homes for sale, in Sydney, Australia, on Tuesday, June 3, 2008. Australian house prices fell in the second quarter for the first time in almost three years as the highest borrowing costs since 1996 deterred home buyers. (Photo by Ian Waldie/Bloomberg via Getty Images)

Much is being said at present about tax reform. From the GST to welfare expenditure, people are discussing the Australian economy and how to make it stronger and fairer.

It's a worthy discussion, and as the Member for an electorate that has higher than average unemployment, poorer educational outcomes and a greater reliance on social welfare, it's incumbent upon me to consider the impacts of change on those who can least afford the things some of us take for granted.

There's no denying that Australia is still very much a land of opportunity. The way I see it, we need to be making the most of the opportunities and, importantly, ensuring those opportunities are accessible to everyone, not just a select few.

The question is: How do we achieve this?

In my view, when developing policy direction, the best place to start is where we want to end up. We need to establish what our end-game is and work back from there.

Two things are fundamental to a strong, fair economy -- employment and housing affordability. Therefore, any fiscal reform we consider must first and foremost allow for all Australians who can work, to find employment and to support long-term housing affordability.

Countries with low unemployment rates have a more robust economy, as the cycle of working and spending gains traction. Small businesses grow as people have the money to pay for their services and products, which in turn leads to an expanding employment market and the benefits radiate out.

Of course, employment isn't solely about money. Having a job also generates a sense of self-worth and motivation. It is important for us to create a country that offers flexible work options. We need to underpin the idea of unemployment benefits being a support, not a destination, so that we can all have a sense of purpose and responsibility.

We may have a 'dream job' in mind, but sometimes the job that is on offer is the one you should take. Having a country where people are gaining experience, valuing work and engaging with their communities is crucial to our economic prosperity.

Improving employment rates requires targeted policy. The Government is addressing this with the establishment of the Free Trade Agreements, which, through the expanding of export markets, will grow businesses, which in turn will open up employment opportunities.

The small business tax breaks that were introduced in the 2015 Budget will also assist in the expansion of businesses, and I'm seeing this first-hand in my electorate.

As these jobs are created, we need to have a multi-skilled workforce ready to fill them. We need to be supporting educational and training facilities to expand services across metropolitan and regional Australia, offering skills-based training for the jobs of the future.

The value of people having a sense of purpose is equally matched by the importance of having a sense of place. Historically, Australians have coveted the idea of owning their own homes. However, this is becoming increasingly difficult to do. When average house prices in our capital cities are creeping ever closer to the million-dollar mark, we have to question the market forces that are enabling this.

Whilst encouraging investment is important, and I concede that investment properties lessen the need for public housing, there needs to be more balance than we're currently seeing. Government must enable property investment without it hindering first and traditional home buyers. The young couple looking to purchase their first family home shouldn't have to compete with overseas and serial investors, who are driving prices up to unprecedented levels.

To introduce more measure to the property market, we need to consider restricting negative gearing to the purchase of one dwelling plus one investment property. With interest rates as they are, there's a strong argument for positive gearing, and setting some gearing restrictions will not inhibit investment.

Greater oversight of investment rules, such as those this Government has already introduced around foreign ownership, is central to ensuring our property market is fair.

Our end-game is, and must always be, to have an equitable system that provides support where it's needed but that also provides the encouragement for everyone to contribute to our country and to reap the rewards of doing so.

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