Opposition Leader Bill Shorten has vowed to overhaul Australia's "bullet-ridden" tax system if Labor wins the next federal election, promising big changes to negative gearing and capital gains rules.
Addressing the NSW ALP conference on Saturday, Shorten unveiled Labor's plan to make negative gearing only available on newly constructed homes from July 2017.
Shorten labelled the change as "the most important structural budget reform in a decade".
"Under a Shorten Labor Government, from July 2017, negative gearing will only be available on newly-constructed homes," he told Labor faithful at Sydney Town Hall.
Under the proposed changes, there would be no change for existing negatively geared property, Shorten said.
"Let me repeat this -- mum and dad investors who have a house or apartment that is negatively geared right now will keep the deductibility," he added.
Shorten said the changes to negative gearing could increase housing supply, put downward pressure on rents and could result in up to 25,000 new jobs.
Capital gains laws would also be altered under Labor's plan.
Shorten said capital gains tax concessions would be cut from 50 per cent to 25 percent in July 2017, adding that Labor was "not proposing to change the rules on existing assets and personal superannuation" related to capital gains tax.
He said the family home would "always be 100 percent capital gains tax-free".
Labor will reform negative gearing & capital gains tax subsidies to ensure our tax system is fair. #alpconf16— Bill Shorten (@billshortenmp) February 13, 2016
Under Labor, all investments currently negatively geared or purchased before 1 July 2017 will not be affected. #alpconf16— Bill Shorten (@billshortenmp) February 13, 2016
"These two reforms that we announce today will save $32.1 billion and help put fairness back into the housing market," he said.
Shorten said Australia's tax system was currently making wealthy people "even wealthier".
"Every dollar of revenue that slips through a tax loophole is a dollar robbed from our future, " he said.
"We are not interested in the knee-jerk Liberal response of slugging working and middle-class families with a 15 percent GST or slashing penalty rates."
In the wide-ranging speech, Shorten also backed marriage equality, the republic movement, action on climate change and opposed any move to privatise Medicare.
He outlined a 5-point plan for Australia's future.
"There are five big things we need to do to set Australia up for the future.Grow the economy and reduce the deficit. Invest in health and education. Secure universal superannuation at 12 percent. Deliver true equality for the women of Australia. Take real action on climate change with strong renewables and net zero pollution by 2050."