New polling shows majority of voters support drop in house prices

Prime Minister Anthony Albanese’s bid to make housing more affordable for young Australians has widespread support despite growing political backlash over his overhaul of the tax system; new polls show most voters are pleased with the decline in home prices.

Former Treasury secretary Ken Henry has claimed that start-ups demanding protection from the government’s tax changes are seeking relief unavailable to ordinary working people, while an exclusive Resolve Political Monitor poll has found that even Coalition and One Nation voters support a drop in property values.

While the majority of Australians are pleased that house prices have fallen, only one in two oppose the correction.Dion Georgopoulos

The broad parameters of the government’s tax changes, including restricting the negative approach to new property and returning to the pre-1999 capital tax gains concession system, will go to the Senate for debate on Monday.

The government believes it will have the support of the Greens to introduce changes that Albanese said on Sunday were aimed at making housing more affordable for young people.

“The whole point of this reform is to ensure that young Australians can aspire to have a roof over their heads. That’s the purpose of this change,” he told Sky News.

The Resolve poll of 1,800 people found 54 per cent support lower house prices, with just 11 per cent opposed. 35 percent said they were undecided or neutral.

Support was strongest among Labor voters (64 per cent), property investors (62 per cent), committed voters (57 per cent) and people aged 18 to 34 (60 per cent). While the support rate among people aged 55 and over was 47 percent, the opposition rate was 13 percent.

While 41 percent of coalition supporters said they supported lowering prices, only 20 percent said they were against. Support among “other voters”, including One Nation and independents, was 52 per cent, while opposition stood at just 12 per cent.

Every income group supported a decline, from 51 percent for low-income earners to 56 percent for high-income earners. More than half of homeowners supported the decline, while 13 percent opposed it; Among those with a mortgage, supporters outnumbered opponents 55 to 11.

Cotality’s daily measure of house value shows values have fallen 0.8 per cent in Sydney and 0.5 per cent in Melbourne so far this month. Sydney’s values fell 2.9 per cent from their peak at the beginning of the year, while Melbourne’s values fell 3.4 per cent.

However, values in other capitals continued to rise throughout June, albeit more slowly. There was an increase of 0.3 percent in Brisbane, 0.4 percent in Adelaide and 0.7 percent in Perth.

The tax package, particularly the overhaul of the capital gains tax concession, has come under intense criticism from business groups. The start-up and technology sector is particularly critical.

On Sunday, Liberal leader Angus Taylor said the changes would harm business ambitions, ultimately devastating the economy.

“What we will see as a result is investment drying up, risk taking drying up, prosperity drying up and a continuation of what we’ve seen recently, which is the biggest collapse of any developed country in terms of our standard of living,” he told Sky News.

But Henry, the former Treasury secretary who chaired a review of the entire tax and benefits system in 2010, used an academic paper to attack criticism of the government’s proposals.

Henry said the complaints contradict the business community’s criticism of the tax system before the budget was released.

“I had no idea before budget night that Australia’s post-1999 tax system had such strong support in the business community. That’s not what I heard,” he said in a paper published by the Australian National University’s Tax and Transfer Policy Institute.

Entrepreneurs in the start-up and technology sectors have argued they will be hit particularly hard by the government’s changes, claiming they have effectively sacrificed their income to start their own business in the hope of making a significant capital gain when the firm is sold.

Henry said it’s a method of converting ordinary income into a capital gain that gives startups a significant tax advantage.

Before the advent of the capital gains tax and fringe benefits tax in 1985, many businesses operated this way as businesses sought to convert income into capital gains to avoid paying income taxes like ordinary workers.

Someone professionally trained, such as a lawyer or architect, made long-term financial sacrifices, Henry said, but did not enjoy the tax benefits sought by the start-up industry, whose technology plans could ultimately eliminate workers paying income taxes.

“The purpose of CGT and fringe benefits tax in 1985 was partly to remove opportunities for tax-effective pay structuring,” he said.

“Forty years later, it may be useful once again to ask why a high-risk business venture with a distant return should be preferred to tax over a human capital investment that requires sacrificing income over many years in anticipation of a future income gain that is also risky but fully taxable.

“Despite numerous comments, no lawsuit was filed.”

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