Many workers face being pushed into higher tax brackets in the next few years just through wage inflation.
“Any changes you make in areas of tax, it’s got to go back into tax cuts to people who are earning a living,” Morrison told Sydney’s 2GB radio on Monday.
He said Labor’s announced plan at the weekend to rein-in negative gearing and capital gains tax are higher taxes that are not going to be put back into tax cuts.
“They are just going to do it to spend more and more and more,” he said.
Cabinet minister Josh Frydenberg labelled Labor’s plan “a joke”, saying it won’t even cover Australia’s monthly interest bill.
But shadow treasurer Chris Bowen insists limiting negative gearing to investment in new properties from mid-2017 would promote a level playing field for new home buyers.
Along with cutting the capital gains tax discount to 25 per cent from 50 per cent, it will save the budget $32.1 billion over 10 years, although only just over $500 million over the four-year budget estimates.
“A first-home buyer turns up at an auction with very little government support … while an investor turns up at an auction with the most generous tax treatment in property investment in the world,” Mr Bowen told ABC TV on Monday.
These measures would improve the budget bottom line by increasing over time and were aimed to protect investors who already had negatively geared property.
Senior Labor frontbencher Mark Dreyfus said the plan would make housing more affordable by encouraging people to build new houses and increase supply.
But Frydenberg said these proposed changes could actually drive up the price of new homes, putting further pressure on first-home buyers.
Prime Minister Malcolm Turnbull, speaking to reporters in Townsville, said it is not a well-designed proposal which risks distorting the housing market and doesn’t address the big budget deficit problem that Labor created.
Morrison said Bowen thinks everyone who is on negative gearing is on a rort.
“He thinks they are big property barons, he’s going to tax them and slam them,” he said.
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