Australian Council of Social Service calls for slashing tax breaks for property investors

Extract from ABC News

By senior business correspondent Peter Ryan

Updated 8 minutes ago

Photo: ACOSS says the future welfare of less-well-off Australians overrides tax concessions for property investors. (ABC News: Clarissa Thorpe)

Related Story: RBA governor takes aim at negative gearing

Tax breaks for property investors should be slashed and the Medicare levy lifted to pump more funding into welfare spending, according to the Australian Council of Social Service (ACOSS).

In its pre-budget submission, the peak welfare group says there is "no more fat to chew" from lower-paid workers or disadvantaged Australians as the Government seeks to carve out further savings.
ACOSS is urging the Federal Government to consider a range of measures that would save $9.4 billion by 2018-19, such as reducing the current 50 per cent discount on capital gains tax (CGT) and winding back generous tax breaks on negative gearing.
ACOSS chief executive Dr Cassandra Goldie told the ABC the future welfare of less-well-off Australians overrides generous tax concessions for property investors.
"We can no longer afford the 50 per cent discount on taxes for capital gains from property assets and deductions for such investment using negative gearing," Dr Goldie said.
The ACOSS submission calls for the CGT discount to be at least halved and negative gearing concessions reduced to cool property speculation and the current housing affordability crisis.
On Friday, Reserve Bank governor Philip Lowe suggested altering the mix of tax breaks for property investors, such as capital gains tax and negative gearing, could tax some heat out of the currently hot real estate market.
Dr Goldie has urged the Government to recast its budget strategy and to move on from a "one-sided focus on spending cuts", especially in the area of welfare spending.
"It is clear that governments will not be able to fund the cost of essential services such as health, aged care and NDIS [National Disability Insurance Scheme] from present tax revenues," Dr Goldie said.
"It is not fair or reasonable to expect people who need to see a doctor, attend hospital or move into aged care to pay more for these essential services."

ACOSS calls for tax on sugary drinks

Apart from scaling back concessions for property investments, ACOSS wants the Private Health Insurance Rebate scrapped so the Government can invest in preventative health services.
The submission says $4 billion could be raised by removing an exemption from a higher levy in the Medicare surcharge for people who hold private health insurance.
ACOSS is also calling for a tax on sugary drinks which could add $500 million to Treasury coffers in 2017-18.
Not surprisingly, Dr Goldie is opposed to a cut in the corporate tax rate from 30 per cent to 25 per cent over 10 years.
"Our nation cannot afford unfunded company tax cuts at this time for large or small businesses. Any tax cut should be funded through business tax reform," Dr Goldie said.
"There is simply little left to cut without harming people on the lowest incomes and driving more families and children into poverty."
The ACOSS submission also wants the Medicare Safety Net abolished and further reforms to private trusts and superannuation contributions to ensure Treasurer Scott Morrison finds savings without hurting the poor.
Follow Peter Ryan on Twitter @peter_f_ryan and on his Main Street blog.