Money Labor targets self-managed super funds and foreign investors in new housing affordability plan

11:40  21 april  2017
11:40  21 april  2017 Source:   ABC News

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The Federal Opposition proposes increasing fees for foreign investors and getting tougher on borrowing by self - managed super funds as part of a housing affordability plan .

CANBERRA -- The Opposition will target self - managed super funds and foreign investment in an expanded version of Labor 's housing affordability reforms to be unveiled by Bill Shorten in western Sydney on Friday.

Labor's plan aims to tackle skyrocketing property prices and declining affordability. © Michael Coggan/ ABC News Labor's plan aims to tackle skyrocketing property prices and declining affordability. A crackdown on borrowing by self-managed superannuation funds and increased fees for foreign investors are among the ideas flagged in the Federal Opposition's new plan for housing affordability.

The plan fleshes out Labor's approach to tackling skyrocketing property prices in Sydney and Melbourne beyond its core policies of changes to negative gearing and capital gains tax concessions.

Shadow Treasurer Chris Bowen said limiting borrowing by self-managed super funds would be a key component of the plan.

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A crackdown on borrowing by self - managed superannuation funds and increased fees for foreign investors are among the ideas flagged in the Federal Opposition's new plan for housing affordability .

Investors who hoard vacant properties, foreign buyers and self - managed super funds are the targets of Labor leader Bill Shorten will formally release his party's housing affordability plan in * million over two years for a new Safe Housing Fund to increase transitional options for women

It was based on one of the key findings of the David Murray-led financial systems inquiry in 2014, which found that leverage should be banned in superannuation funds to mitigate the risk of financial instability.

The Government rejected Mr Murray's advice.

"This has been growing exponentially," Mr Bowen said.

"There was $2.5 billion in borrowing in 2012 — it's now $24 billion today.

"And this is the only recommendation in the Murray Report which the Government has explicitly rejected and really that is just negligent."

Investor tax proposal

The Opposition is also backing a uniform tax across major cities to deter investors from leaving properties empty, as has been introduced in Victoria.

Mr Bowen said that would continue to be a state-based tax.

"It's a thoroughly bad idea": Tanya Plibersek on the first home buyers superannuation scheme.

  Last week, Malcolm Turnbull and the Liberals have been fighting amongst themselves about whether young Australians should be allowed to use their superannuation to buy their first home. On the surface, it may seem like an attractive idea: all that money just sitting there doing nothing, right? Wrong.The truth is that letting people use their super to buy a home will just push up house prices even further. And it does nothing to increase housing supply.All it does is put extra money in the market that will fuel a bidding war – driving up house prices. Housing prices already rose 19 per cent in Sydney in the last year.

Labor will promise to ban direct borrowing by self - managed superannuation funds , as part of a housing affordability policy released on Friday to pre-empt the government’s package in next month’s budget. This “limited recourse borrowing”

Investors who hoard vacant properties, foreign buyers and self - managed super funds are the targets of Labor leader Bill Shorten will formally release his party's housing affordability plan in * million over two years for a new Safe Housing Fund to increase transitional options for women

"We want the states to continue to receive the revenue and we think ideally, if the states are willing, it would be something best done uniformly across the country, for consistency's sake," he said.

"So we'd be happy to facilitate a COAG process for that."

Mr Bowen said people were entitled to leave houses vacant but this would be a price signal that that did not help housing affordability.

Foreign investor penalties

Another component in the plan would be an increase to fees and penalties for foreign investors.

"The total of foreign investment in Australian real estate is still comparatively small, but it's growing at a rapid rate," Mr Bowen said. "So together again with surcharges and stamp duty that most states have put on, this could play a role in sending the property market a signal."

Labor has confirmed it is on a unity ticket with the Government when it comes to setting up a bond aggregator to encourage investment in affordable housing.

Housing affordability: Australia's politicians among nation's most aggressive investors

  Housing affordability: Australia's politicians among nation's most aggressive investors Housing affordability: Australia's politicians among nation's most aggressive investorsThe politicians charged with tackling the thorny issue of spiralling house prices are among the nation's most aggressive property investors, an analysis by the ABC has revealed.

US drops 'Mother Of All Bombs' on ISIS target in Afghanistan. April 14, 2017 01:04 AM. Foreign investors have pulled out of India at record pace. Buy ICICI Prudential Life, LIC Housing Finance; sell Idea Cellular: Ashwani Gujral. Retirement Planning . EMI Calculator.

"We're just confirming that if they don't do it, a Labor government will do it," Mr Bowen said.

The release of Labor's plan comes as the Government is preparing for next month's federal budget.

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Foreign interest in Australian housing has dropped by more than 50% .
The number of foreign investment applications for residential housing has fallen sharply. The government, and regulators, have recently deployed a series of measures aimed at cooling Australia's booming property market. And authorities in China have been cracking down on the amount of money flowing out of the country.

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