Bill Shorten’s war on business will have a direct impact on the lives of everyday Australians who are working hard to get ahead.
Labor’s changes to negative gearing are deliberately designed to hit housing, commercial property, shares and other investments where people borrow to build a more secure financial future for themselves and their families.
Negative gearing has been part of the Australian tax system for more than 100 years.
Labor’s attack on negative gearing will reap it $32 billion to line its coffers. In doing so, Labor will not only damage the economy but will also hurt everyday Australians trying to get ahead.
Gemma is a nurse who earns $60,000 (Note: this is around the wage of a second year registered nurse in a NSW Public Hospital)
After July 1 2017 Gemma takes out a loan to help buy an old apartment as an investment property.
She rents out the property and her rental income is just over $8,000 less than the interest costs on the loan and other deductible costs.
She works hard every weekend, undertaking repairs in between her nursing shifts so she can continue to rent out the property and help fund her retirement.
Under Labor, Gemma will be unable to use the ~$8,000 loss to reduce her $60,000 taxable income to ~$52,000.
As a result, she will have to pay an extra $2,880 in income tax. That’s an increase in Gemma’s annual income tax bill of more than 31 per cent.
Labor’s plan for Gemma and thousands of Australians like her is to have her pay more tax or put off planning for retirement.
Labor’s reckless attack on the economy to line its coffers will have a direct and personal impact on everyday Australians.