VOTIVA News

THE family home - and the odd family investment property - both look safe from the Henry tax review, after the Treasurer yesterday went close to ruling out any changes to the negative gearing system.

Wayne Swan has already rejected reports that the Henry review would propose putting a wealth tax on expensive homes.

The real estate industry has voiced concern about tinkering with negative gearing, which allows investors to claim interest expenses on rental properties.

The Treasurer stopped short of saying there would be no changes to the system. "I'm not going to impinge on matters that may be the purview of the Henry inquiry. But I think if you go back and look at my comments over the years I have not been a critic of negative gearing [as] some have been out there."

Tax Office figures released this week show investors saved about $4 billion from negatively geared property.

The figures also show that about one in seven taxpayers owns investment property.

Negative gearing has been criticised for increasing demand for property, pushing up prices and harming affordability.

On Thursday the Housing Institute of Australia warned against any changes to the system of negative gearing.

"Fiddling with the taxation treatment of residential rental investment is dangerous," its executive director, Graham Wolfe, said. "If the Australian government [wants] a mature discussion with the community about tax policy ... then there should be a structured program of consultation set against the Government's response to the Henry taxation review."

The Hawke government tried to quarantine negative gearing for new properties in 1985, but faced a massive backlash.

"I still wear the scars of that," the Treasurer secretary, Ken Henry, said in late 2008 of the ill-fated changes.

Mr Swan's comments on the tax review came in a week that saw the government keep up its attack on the Coalition's leadership team after Barnaby Joyce was dumped from the opposition finance portfolio.

The Treasurer turned his sights on the opposition Senate leader-in-waiting, Eric Abetz, declaring him unfit for the job following his entanglement in the Godwin Grech and OzCar affair.

Senator Abetz has nominated for the position after Nick Minchin resigned this week.

"There are many, many unanswered questions about Senator Abetz's role in the OzCar affair," Mr Swan said. "They reflect very poorly on [him] and make him unqualified to lead a major party in the Senate."

Senator Joyce told ABC radio yesterday he was disappointed with criticism from his own side of politics about his fitness for the role of finance spokesman.

"You can't campaign against anonymous sources from your side," he said.

The Opposition Leader, Tony Abbott, said Senator Joyce's new role in regional affairs, infrastructure and water was even more important than the finance portfolio.

"No one can read the popular mood and speak the popular language like Barnaby," Mr Abbott said.

Mr Swan said the government would release the Henry tax review before the May budget