Labor MPs push for another major tax change that will impact property owners

Labor MPs and unions are pushing for another major tax tweak in the wake of Anthony Albanese‘s controversial back-flip on stage three cuts.

There are growing calls among Labor MPs for more immediate cost-of-living relief and also support for revisiting Labor’s negative gearing policies.

Negative gearing is when the cost of owning a rental property outweighs the income it generates, creating a taxable loss which can be offset against other income.

For example, if someone rents out an investment property for $20,000 a year but they pay $30,000 in interest on their mortgage they can essentially subtract $10,000 from their salary and only pay tax on what remains.

Negative gearing benefits investors looking to expand their property portfolio rather than first-time buyers. 

One Labor MP said there was broad support in the party for making legislative changes to negative gearing as members are concerned it unfairly benefits older generations. 

‘It should not be easier to buy your second and third house than to buy your first,’ the anonymous MP told The Australian. 

However, another MP cautioned that it could only happen after the next election so that Labor would have a mandate for it.

‘One broken promise is enough for one term,’ the MP told the paper.  

Anthony Albanese pledged at least 36 times during the election he would make no changes to the legislated cuts introduced by the Morrison government. 

But last week Labor MPs gave their unanimous support to a decision to halve the benefit to Australians earning over $180,000 in favour of a boost to lower earners.

The major backflip has triggered heavy criticism, with Labor’s trustworthiness called into question. 

But Mr Albanese has defended the decision, claiming his changes will give more help to ‘middle’ Australia’ while still delivering a tax cut for ‘all Australians‘. 

Meanwhile, Labor MPs and unions are calling for more immediate cost-of-living support as the stage three cuts won’t kick in until July.

Electrical Trades Union national secretary Michael Wright said the ‘No.1 item’ to alleviate cost-of-living pressures was to provide help with electricity costs.

This position was reportedly supported by Labor MP Brian Mitchell who called for an an extension to the government’s energy bill relief package.

Mike Freelander, the Labor MP for the south-west Sydney seat of Macarthur, told The Australian people in his electorate were struggling with transprot and medical bills. 

‘The pressure on medical costs is also very large as we approach the 40th anniversary of Medicare and more needs to be done to improve people’s access to primary care,’ Mr Freelander said.

‘A big factor in outer metropolitan areas like mine are travel costs and I’d really like something to be done there. 

‘It’s a killer, it ­really does cost thousands of dollars each year.’