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Negative gearing retention & skills upgrade on REIA’s budget watch

8 May 14

The Real Estate Institute of Australia (REIA) says any change to negative gearing would impact on the supply of housing and the level of rents in an already tight rental market.

In its pre-budget submission, REIA’s analysis of the impact of the Henry Review recommendation that deductions and income associated with rental property should be discounted by 40% shows this would result in rent increases of more than 4%.

REIA President Peter Bushby says, “To amend the current negative gearing provisions for housing would be treating real estate differently to other asset classes, create a distortion on the investment landscape and result in a resource misallocation.”

“The view that negative gearing is for wealthy investors is a myth. ATO data shows fewer than 80% of the total individual taxpayers that are claiming a tax deduction for property earn less than $80,000 a year.”

REIA also wants to see improvement in the quality of delivery of vocational education and training. Mr Bushby says, “We have to ensure that the Australian Skills Quality Authority’s (ASQA) funding is enough to see nationally approved quality standards are met for vocational education and training (VET).”

Mr Bushby said he was concerned at Audit Commission recommendations that VET policy and programs should be devolved to the states. “There is a clear role for the federal government in developing national standards to ensure the quality of competency and curriculum through National Training Packages.”

“Some self-paced e-learning courses that are offered are of a poor quality and there are weaknesses in the training system due to a lack of rigour in the methods of assessing Recognised Prior Learning (RPL) and in the assessment of student competency.”

“These issues need to be tackled head on, not passed on,” concluded Mr Bushby.

For REIA’s Pre-Budget Submission in full, click here