Malcolm Turnbull has confirmed the government will release its tax policy before the federal budget in May as he faces the onset of another parliamentary week with a restive backbench and an opposition out defining the terms of the policy debate.



After a week in which the government attempted to launch a scare campaign against Labor’s proposals on negative gearing, but stumbled on the detail, Turnbull said on Sunday his own tax policy “will be completed shortly and the results will be announced in the lead-up to the budget”.

The government’s policy is likely to include measures like capping the losses that investors can claim via negative gearing, adjusting the current tax concessions on superannuation, halving the capital gains tax discount for superannuation funds and possibly lining up with Labor’s proposed hike in the tobacco excise – all in an effort to fund modest income tax relief.

Senior government figures say the package is not yet finalised, and has not yet been to cabinet, but the government is now resolved to produce a comprehensive statement on tax as soon as possible.

But a group of backbenchers, some who sided with Tony Abbott in the government’s leadership tussle, have been out campaigning publicly for weeks against the government making any changes to negative gearing concessions.

Unlike Labor’s policy, capping losses, if the government proceeds with that proposal, would impact existing investments, not future investments.

On Sunday the former prime minister John Howard added his voice to the naysayers, urging Turnbull to be “careful” about fiddling with negative gearing. Turnbull will join Howard on Wednesday evening at a dinner at Parliament House marking the 20th anniversary of his election to power in 1996.

“I’d be careful. There are a lot of modest income people who accumulate some money and negatively gear a property,” Howard told Sky News on Sunday.

The Property Council has also launched advertisements attempting to warn politicians against winding back negative gearing concessions. The council is the lobby group for Australia’s major property development companies.

After presiding over a coin toss at a cricket match between journalists and politicians on Sunday, Turnbull continued to argue Labor’s policy on negative gearing would create a shock in the property market.

The prime minister said he had discussed negative gearing with John Howard on Saturday and “what John says about being careful about tax policy is absolutely right”.

Pressed on whether that remark and his critique of Labor’s policy meant he was now positioning to rule out any adjustment to negative gearing, the prime minister said he was “doing my job as prime minister, looking at these issues very very carefully – that’s what Australians expect me to do”.

The Labor leader, Bill Shorten, told reporters on Sunday that, on tax policy and on economic management, Turnbull had thus far only produced “a plan for a plan”. The opposition infrastructure spokesman, Anthony Albanese, speaking on the Insiders program, branded Turnbull “Tony Abbott in a top hat”.

But, in a statement issued by his office on Sunday, Turnbull argued major tax changes could not be rushed.

“When you rush changes to the tax system, you make mistakes,” the prime minister said. “We have seen this approach to tax policy from Labor before. Australia cannot afford reckless and piecemeal changes that would hurt confidence, discourage investment and damage the economy.”

Turnbull argued last week that Labor’s policy, which would restrict concessions to investors in new housing stock after the middle of next year, would “smash” the value of the family home and drive “all investors” from the market.

Late in the week the prime minister added another contention: Labor’s policy would also benefit wealthier investors at the expense of modest investors.

The prime minister argued wealthy investors, people with share portfolios as well as property, would be able still to offset higher net rental losses against their investment income under Labor’s policy, where an investor with one investment property and no shares would not be able to claim losses.

Albanese on Sunday rejected the notion that Labor’s negative gearing policy would diminish the value of the family home.

He said the policy would mean that first home buyers weren’t disadvantaged by “unfair competition” from investors.

Albanese said Labor was attempting to make sure “that first home buyers who are currently out of the market – I mean, they’ve stopped even looking – will enter the market and not be competing in an unfair way”.