Awkward moment Albo's special housing envoy cannot answer simple question about $2-a-week rent increase: 'What is it based on?'

By NICHOLAS COMINO, POLITICAL REPORTER, AUSTRALIA Published: 05:27, 23 August 2026 | Updated: 05:27, 23 August 2026 Labor’s Special Envoy for Housing Josh Burns was unable to explain Treasury’s modelling, which predicted the government’s housing tax changes would increase rents by $2 a week, as economists warn the reforms could add pressure to tenants.  In a News24 interview with Andrew Clennell on Sunday, Burns repeatedly dodged questions about how Treasury calculated the $2 figure mentioned in the May budget. The reforms include the removal of negative gearing for existing homes and the end of the 50 per cent capital gains tax discount, replacing it with a 30 per cent flat tax indexed to inflation. Economists and property industry groups have warned the changes could discourage investment in existing properties, reduce the supply of rental homes and push rents higher. Concerns intensified after NAB economists published analysis suggesting rents in Sydney and Melbourne could rise by 25 to 30 per cent if investors demand higher rental yields to make up for the loss of tax advantages. 'In our view, the changes to the tax settings for investors in existing dwellings imply that gross rental yields will need to rise in order to compensate for the loss of tax benefits,' NAB head of Australian economics Gareth Spence said. 'For investment properties in Sydney and Melbourne, a rise in the rental yield of 1 percentage point from about 3.5 per cent to around 4.5 per cent implies an increase in rents of 25 to 30 per cent, assuming the current level of house prices is unchanged.' NAB later clarified the analysis did not account for the large number of existing investment properties that will be grandfathered under current negative gearing arrangements. Josh Burns (pictured) said he could not explain Treasury's $2 a week rent increase estimate The interview became tense when Clennell pressed Treasury's own estimate that the tax changes would only raise rents by $2 a week The interview became tense when Clennell pressed Treasury's own estimate that the tax changes would only raise rents by $2 a week. PropTrack data showed national asking rents rose 3.1 per cent in the June quarter alone, equal to about $21 a week for a typical rental property. 'How did they come to that conclusion?' Clennell asked. 'What is that based on, or was it plucked out of the air?' Burns admitted he could not provide the answer. 'I don't have the full methodology of the Treasury modelling. We can get that for you if you'd like,' he said. Clennell pressed Burns, noting his role as Special Envoy for Housing should mean he could explain the government's figures, but Burns again referred the question to Treasury. 'That's a question we can get from the Treasury. It's an answer we can get from the Treasury,' he said. Burns defended the government's policy, arguing the main aim is to help more Australians become homeowners. Rents have grown at around $21 a week since the Albanese budget was handed down in May 'We want people to buy their own home, and we want people to move from renting to home ownership,' he told News24. He said the government expected a transition period as the changes worked their way through the market, but maintained the long-term result would be increased home ownership and more housing supply. Clennell also challenged Burns on whether the reforms could shrink the rental market by encouraging owner-occupiers over investors. 'Isn't there also a chance that this change in policy means more owner-occupiers access the market over investors, and that in itself leads to a shortage of rentals, and that leads to demand overtaking supply, and that leads to higher rents?' Clennell asked. Burns pointed to strong growth in investment in new builds. 'What the June quarter showed us is that there is a record number of investors looking to new builds,' he said. 'The number of investors who are now investing in new homes and new properties has significantly increased.' Despite these comments, Australia’s major banks have reported a sharp fall in mortgage applications since the reforms were announced.  Australia's Big Four banks revealed that loan applications had dropped around 15 to 20 per cent Commonwealth Bank last week revealed new residential mortgage applications had fallen 15 per cent since the budget was handed down in May. Westpac reported an average 20 per cent decline in mortgage applications between May 15 and 31 July compared with the previous quarter, while NAB last month disclosed a 15 per cent fall in home lending applications during the June quarter.