Negative gearing remains a political hot potato — If Labor MPs fear a new attempt at reforming negative gearing would lead to another scare campaign, they’re undoubtedly correct
Negative gearing remains a political hot potato — If Labor MPs fear a new attempt at reforming negative gearing would lead to another scare campaign, they’re undoubtedly correct
Labor has a long and messy history with negative gearing and capital gains tax reform, writes Anton Nilsson:
*[…] In 1985, the Hawke government abolished negative gearing for all future rental property investors, “[quarantining] any losses made from owning rental properties” so that the losses “could not be used to reduce tax on other sources of assessable income”, in the words of Jim O’Donnell, a solicitor who published a paper on the policy in 2005.*
*The Hawke government reversed the changes in 1987, despite the then treasurer Paul Keating suggesting in an August 1987 cabinet submission that “with the notable exception of Sydney, conditions in the residential rental property market [had not become] unusually tight”, as ABC News reported in a fact-check piece in 2015.*
*“There was such a pile-on that they had to put it back,” financial journalist Alan Kohler told Crikey.*
*Kohler described the pile-on as a quintessential scare campaign: “The reason they had to put it back was because the property industry declared this was going to lead to a complete absence of investors, and therefore reduce the supply of rental housing. Labor kind of caved in at the end.”*
*Whether the industry’s professed fear is founded or not is hard to say, according to Kohler.*
*“The trouble is that negative gearing applies to everything at the moment, and it doesn’t distinguish between existing housing and new housing,” he said.*
*“All the modeling suggests that removing it would have only a very minor impact on house prices, mathematically speaking. My view is that it’s not about the actual impact — it’s about the view of housing as an investment, as a market rather than a human right and a place to live.”*
*[…] One unnamed Coalition MP, speaking to the ABC’s David Speers, said the opposition would go after Labor even if any proposed changes would target wealthy investors only.*
*“Whatever they do, we’ll run a scare campaign saying they’re after you next,” the person said, adding Labor would be “fucking nuts” to try it again.*
*Need more evidence? Look at today’s Daily Telegraph, which contained a headline declaring: “It’s Labor’s tax on ambition”.*
*The paper also featured an opinion piece by Real Estate Institute of Australia president Leanne Pilkington [syndicated in News Corp outlets] arguing that “targeting negative gearing will have dire consequences for both investors and renters”.*
*The [original] online headline for that opinion piece was certainly scary: “Millions crucified by Albo’s new housing move”.**
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Labor has a long and messy history with negative gearing and capital gains tax reform, writes Anton Nilsson:
*[…] In 1985, the Hawke government abolished negative gearing for all future rental property investors, “[quarantining] any losses made from owning rental properties” so that the losses “could not be used to reduce tax on other sources of assessable income”, in the words of Jim O’Donnell, a solicitor who published a paper on the policy in 2005.*
*The Hawke government reversed the changes in 1987, despite the then treasurer Paul Keating suggesting in an August 1987 cabinet submission that “with the notable exception of Sydney, conditions in the residential rental property market [had not become] unusually tight”, as ABC News reported in a fact-check piece in 2015.*
*“There was such a pile-on that they had to put it back,” financial journalist Alan Kohler told Crikey.*
*Kohler described the pile-on as a quintessential scare campaign: “The reason they had to put it back was because the property industry declared this was going to lead to a complete absence of investors, and therefore reduce the supply of rental housing. Labor kind of caved in at the end.”*
*Whether the industry’s professed fear is founded or not is hard to say, according to Kohler.*
*“The trouble is that negative gearing applies to everything at the moment, and it doesn’t distinguish between existing housing and new housing,” he said.*
*“All the modeling suggests that removing it would have only a very minor impact on house prices, mathematically speaking. My view is that it’s not about the actual impact — it’s about the view of housing as an investment, as a market rather than a human right and a place to live.”*
*[…] One unnamed Coalition MP, speaking to the ABC’s David Speers, said the opposition would go after Labor even if any proposed changes would target wealthy investors only.*
*“Whatever they do, we’ll run a scare campaign saying they’re after you next,” the person said, adding Labor would be “fucking nuts” to try it again.*
*Need more evidence? Look at today’s Daily Telegraph, which contained a headline declaring: “It’s Labor’s tax on ambition”.*
*The paper also featured an opinion piece by Real Estate Institute of Australia president Leanne Pilkington [syndicated in News Corp outlets] arguing that “targeting negative gearing will have dire consequences for both investors and renters”.*
*The [original] online headline for that opinion piece was certainly scary: “Millions crucified by Albo’s new housing move”.**
*https://www.dailytelegraph.com.au/business/economy/millions-crucified-by-albos-new-housing-move/news-story/9a7e393351c2c81fab5fd435ff51e2d1