Negative Gearing debate

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Negative Gearing debate

Post by veya_victaous on Sun May 01, 2016 4:23 am

If you’re mad, upset and feeling helpless about the fact that you’ll probably never get into the housing market, you’re not alone. Waleed Aly is with you.

On last night’s episode of The Project, Aly delivered a powerful six minute segment on negative gearing; breaking down what it is and who it’s affecting, all before taking a sledge hammer to government claims, and doing what no politician has ever done well – providing non-biased data to back up his analysis.

Of course he did. *Cough* Gold Logie *cough, cough* ahem, Gold Logie.

The general consensus on what negative gearing does is clear, Aly argued.

"Economists agree that negative gearing pushes house prices up, contributes to making our houses some of the most expensive in the world, and if you're from generation X or Y or you're a millennial, it's one of the reasons you can't afford a house."

While assessing Malcolm Turnbull's election commitment to keep negative gearing as is, Aly pointed out that the claims made in Tuesday night's interview with Leigh Sales on 7.30 were flawed at best, and raised the train wreck PR stunt that was introducing "real" Aussie families that benefit from negative gearing.

"So to recap, negative gearing has contributed to you - generations X, Y and millennials - not being able to buy a home, but it's got this baby one, so it all evens out, yeah?"

Peter Martin, the economics editor of The Age, agreed that buying houses for infants shouldn't really be our priority.

"If things are really that bad that that's what you need to do to get into the housing market, it says a lot more about the market than that negative gearing's a good idea," he said.

And while the Liberal Party is determined to bring Labor's policy down, independent research from the ANU's Centre for Social Research and Methods found that, "Labor's policy would slow the growth of house prices, increase new construction, raise billions each year for the budget".

"It literally said Labor's policy could be 'the biggest housing affordability policy this country has seen'," Aly said.

No political party, organisation or individual commissioned that modelling.

While opposition leader Bill Shorten may be, as Aly says, "the equivalent of the complaining neighbour who calls the cops and says the music's too loud," he appears to be the holder of the only clear solution to what is becoming a major issue for an entire generation of people.


Aly points out that as a sales person, Shorten really lacks some skills, but sandwiched into the segment was a quote from Shorten that, at the heart of it, says everything you need to know about negative gearing.

"In this country at the moment, we spend more money on taxpayer subsidies on negative gearing than we do on higher education."

http://www.msn.com/en-au/news/australia/waleed-alys-powerful-message-about-housing-affordability/ar-BBslQNY?li=AAgfYrC&ocid=iehp
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Re: Negative Gearing debate

Post by WhoseYourWolfie on Thu May 05, 2016 5:28 pm

pirat

I'VE ALWAYS been opposed to the overly generous "Negative Gearing" provisions for housing real estate investors in the Taxation system, as they are applied here in Australia...

I HAVE NO problems with normal business deductions, nor similar depreciation allowances available to typical small-and-medium sized business entities..

HOWEVER, as applied down here, property investors can apply their losses against all of their combined taxable incomes -- NOT only against income from the real estate sectors of their investments..


WHEN these generous deductions were introduced, it was noted that they added around 15% or so to the annual growth rate in property prices, so that added to other price pressures, such as a shortage of suitable land close to Sydney, Melbourne and Brisbane, and fuelled by ill-considered "First Home Buyers Grant Schemes", property prices down here since the 1980s have increased at roughly double the rate of average wage rises..

BACK IN the 1970s and '80s, roughly 60%+ of young single wage earners could afford to buy their own homes. NOW that figure is down under 30%, with First Home buyers comprising only around 12% of total housing property buyers - a record low for this country...

WHENEVER it has been pointed just out how unfair and unhealthy for the markets, and local economies, such policies are, developers and conservative politicians rubbish those claims - arguing that "this is only the same tax breaks that all businesses have access to..".

THIS IS an absolute lie on their part - as many farmers and small business operators would know ! With my beekeeping, I can only carry losses forward to claim against future beekeeping or other farming-related income, and legitimate deductions are only made against beekeeping income -- not against my total "off farm" (i.e. outside..) income.


IT IS ONLY certain market segments, in truth -- such as real estate investments, mining companies, and certain other industries -- who enjoy such largesse in reality..

EITHER shutting out entire generations from buying their own homes -- or else, forcing them to move out an hour or two away from the cities (not only Sydney, Melbourne, Brisbane and Perth; but also the 'second stringers' such as Newcastle/Lake Macquarie, Wollongong/Illawarra, Geelong and the Gold Coast..).
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