There is a story running in the Australian Financial Review today by Phil Coorey suggesting that Mr Morrison is thinking about reducing or eliminating the CGT concession that has made residential property speculation such an attractive past time for oodles of higher income earners (and others just trying to ‘get ahead’) in Australia.
Believe it when you see it.
And if we do see it expect it to be served up with a large dollop of First Home buyer bonus, a side salad of foreign investor free for all and a large sprinkling of “open the gate” population ponzi. If Morrison cools the “well heeled” heels of the property speculators and tax dodgers he needs someone to replace them as props for house prices and therefore the Australian banking system.
It sounds nice – filling Mr Morrison’s budget black hole with extra tax revenue from rich speculators as they are denied one of their favourite tax dodges – but Mr Morrison’s budgetary woes will just be starting if he boots the legs out from under one of the last drivers of Australian house prices and the money supply goosing private bank household credit it generates.
As household credit growth suddenly slows then starts to contract the economy will slip into recession unless some other ‘crew’ picks up the debt gobbling slack or Mr Morrison starts running a larger deficit – which kinda defeats the point of the CGT concession exercise as a budget black hole filler
He will need a bunch of SAS veterans to protect him crossing Tom Ugly’s bridge into the Shire if he acts in a way that starts a house price deflationary spiral.
Nope this news is most likely designed to make it clear that when it comes to the budget, Mr Morrison has no choice – the poor, sick and very unwealthy need to take one for the team. Again!
The asset price speculators betting with taxpayer guaranteed private bank debt have now got the country fully by the short and curlies.
There is a simple alternative and solution to Mr Morrison’s budgetary pickle – see this Glass Pyramid special edition – but it is unlikely Mr Morrison will choose it when he can pick on people who do not usually vote for him and protect the asset price speculators he considers to be the real national heroes!.