Housing Minister Mark Butler was forced to defend Labor’s controversial housing tax changes, insisting they will not trigger widespread rent hikes, despite mounting warnings from critics and rival modelling claiming the policy could deepen Australia’s housing crisis.
Speaking on Sunrise on Friday, Mr Butler rejected suggestions the reforms would place new pressure on tenants, arguing the overwhelming majority of existing landlords would be unaffected because negatively geared properties had been grandfathered under the changes.
“Existing landlords have no basis for increasing their rent because of these tax changes, because they’re grandparented,” he said.
Mr Butler pointed to official government modelling forecasting only a modest increase in rents – estimated at about $2 a week – while maintaining the long-term impact would place downward pressure on prices.
“Going forward, there’ll be a modest impact of rent, so about $2 a week,” he said.
“But over time, there’ll be downward pressure on rent, not upward pressure.”
The minister acknowledged landlords may still raise rents, but argued any increases would be driven by broader market conditions rather than Labor’s policy settings.
“There are a whole bunch of other reasons why landlords will… increase rents, of course,” he said.
“So there may be increases in their rent because of other reasons, but not because of this Budget.”
Mr Butler also took aim at critics of the policy, accusing industry groups and opponents of relying on modelling designed to preserve the existing system.
“It shouldn’t be of any surprise to your viewers that vested interests, who are very happy with the status quo, like the real estate institute and others, lo and behold, come up with modelling that says, ‘Don’t change anything’,” he said.
Deputy Leader of the Opposition Jane Hume delivered a starkly different assessment, arguing Labor lacked a public mandate for the changes and warning the measures could reduce housing construction while pushing rents higher.
“These tax changes weren’t taken to an election, and for that reason, Labor has no mandate for them,” she said.
Ms Hume said Budget figures pointed to fewer homes being built under the policy and claimed rental pressure could be significantly higher than government forecasts suggested.
“Now we’re hearing that these new housing changes, these toxic taxes, are actually going to reduce the number of houses built and push up rents, making it harder for Australians to get into their first home,” she said.
The Coalition has vowed to repeal the measures, while Labor maintains the reforms are necessary to reshape the housing market without punishing existing investors.
