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Published on 4/19/2019

Published by marketing@concretebroker.com.au

Shorten's plans to scrap negative gearing has tradies running scared

Many in the concrete and construction industry are living in fear of Labor's plans to change negative gearing laws in Australia


Cover photo Bill Shorten Source : Wikipedia

 

Bill Shorten and Labor could well hurt those in the Electorate they are supposed to support, the workers

A quick ring around of concreters, tradies, owner drivers, batch plant owners and those working in Australias concrete industry by concrete broker this week has confirmed what the Master Builder’s Association has been saying for months, that Labor’s negative gearing policy would not increase the supply of new dwellings as promised, but rather supply would go backwards. And that means a drastic reduction in construction for an already hurting industry.  The resultant loss of income for those in the industry who are setting up for retirement would deliver them a big blow to their future plans. And the expected massive rise in rent for concreters, tradies and those in the industry who are renting in our major capitals, is not something many in the industry are looking forward to. Even more scary for many is economic modelling issued by Master Builders, which found there could be 42,000 fewer new homes built across the country. That slump would result in 32,000 job losses, it claimed.

 

Dark clouds are appearing over the concrete industry in Australia
Source concretebroker.com in Australia

 

Less cubic metres, higher rents and less property investment could spell disaster for the concrete and construction industry if Labor wins the 2019 Election and negative gearing is scrapped for many property investors. According to Dominique Grubisa, founder of investment consultancy DG Institute, Labor’s changes will result in a large-scale exit of landlords, which will hurt property prices. “Negative gearing means property investors can write off or deduct the losses for tax purposes, and it encourages people to buy properties and rent them out,” Ms Grubisa said. The loss of negative gearing — except for investors who buy newly built dwellings — will lead to plummeting house values and rising rents, Ms Grubisa believes. Money could well drift into superannuation which has less investment in property, and much more investment in large multi national companies and a large component of offshore investment. “ I can’t believe this is happening”, said Concrete broker Founder Tim Harrison when quizzed on the proposed Labor taxation changes. "How can a Labor Government, which is supposed to look after the workers, people trying to get ahead and the average Australian, support a policy which is ultimately going to hurt tradies, Mums and Dads and support the big end of town”. His views were echoed even further by Ms Grubisa, who said “If people don’t get tax benefits from investing in property, they’ll look elsewhere. If it changes, I think people will sell up their properties, and new investors won’t be incentivised to come in.”

 

Fewer landlords and reduced construction activity is likely to sharply increase rents.

Source:Getty Images

Experts predict the rental market will face intense pressure when Labor cuts negative gearing benefits due to an exodus of landlords.“It’s a matter of simple supply and demand,” Ms Grubisa said. “Fewer investors means fewer rental properties, which means higher rents. Everybody loses in the long run.” Despite the fact views are mixed on the ultimate outcomes of Labor’s proposed tax changes to negative gearing, Concrete Broker’s short survey reveals the real fears faced by those relying on the property sector, and ongoing investment in the housing market in Australia. Whether you are an owner driver who is negatively gearing a property for your retirement, a concreter or trade who derives an income from working in the rental property sector, or a batch plant manager who is concerned by the current slump in building approvals, it would appear there is nothing in these proposed changes to make you sleep any easier at night this Autumn.

 

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Tags: Australia concreters negative gearing property tradies


This article was written by marketing@concretebroker.com.au all rights reserved. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect those of concretebroker.com