PRIME Minister John Howard has rejected the idea of making mortgage payments tax deductible. Mr Howard said the government had considered allowing tax deductions for mortgages but decided there were already enormous tax advantages through home ownership. "We don't have capital gains tax on the family home," he told Southern Cross Broadcasting. "We continue to support negative gearing and interest rates are very low. p>"In these circumstances we don't think having tax deductibility on mortgage payments should be introduced because we think that would further skew investment into property and away from other areas that are in need of investment." Mr Howard said he was sympathetic to the concept of income splitting. "We decided when we came into office that we would do it through the family tax benefit system, which effectively means that a single income family on an income up to about $65-70,000 where the youngest child is under five has the same benefits as if that single income was split between the husband and the wife," he said. Mr Howard said the government anticipated a budget surplus this year and would provide tax relief with whatever was left over. "But just how much that is going to be and what form it might take, if it occurs, I am afraid we haven't decided yet," he said. "We don't know the final numbers and we haven't made a final decision in relation to these other things. I am not making a commitment." "We take the view that if there's anything left over it ought to be returned to the people who's money it is, and that is the Australian taxpayer," he said. "But we don't know the dimension of that and we certainly haven't made final decisions on things that we need to invest in."
But he said the forthcoming budget would look at other forms of tax relief once other usual commitments, including defence, education and health, had been met.
Mr Howard said the government had considered allowing tax deductions for mortgages but decided there were already enormous tax advantages through home ownership.
"We don't have capital gains tax on the family home," he told Southern Cross Broadcasting.
"We continue to support negative gearing and interest rates are very low. p>"In these circumstances we don't think having tax deductibility on mortgage payments should be introduced because we think that would further skew investment into property and away from other areas that are in need of investment."
Mr Howard said he was sympathetic to the concept of income splitting.
"We decided when we came into office that we would do it through the family tax benefit system, which effectively means that a single income family on an income up to about $65-70,000 where the youngest child is under five has the same benefits as if that single income was split between the husband and the wife," he said.
Mr Howard said the government anticipated a budget surplus this year and would provide tax relief with whatever was left over.
"But just how much that is going to be and what form it might take, if it occurs, I am afraid we haven't decided yet," he said.
"We don't know the final numbers and we haven't made a final decision in relation to these other things. I am not making a commitment."
"We take the view that if there's anything left over it ought to be returned to the people who's money it is, and that is the Australian taxpayer," he said.
"But we don't know the dimension of that and we certainly haven't made final decisions on things that we need to invest in."
