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The Biggest Problem With Labor’s Negative Gearing Policy

Looking at the register of pecuniary interests, one can’t help but notice the number of politicians with more than one property. Actually, when you look at the number of properties, it’s tempting to suggest that were they all required to divest themselves of all real estate investments, then that’d go more than halfway toward solving the “supply” problem that the Liberals suggest is the reason for high prices.

Of course, to suggest that it’s all a supply problem overlooks the demand side of the equation. Ever since non-landholders were granted the vote a couple of centuries back, the poor have grown more demanding and now most of them seem to think that they require houses, even in the more temperate areas of Australia. Thankfully, there are some who are content to be homeless even if they make the streets untidy. Personally, I think our Deputy PM, Barnaby Joyce (doesn’t sound so absurd if you say, US President Donald Trump!) hit the nail on the head when he suggested that people should quit their jobs and move to his electorate so that they could afford a house… Assuming that they could get another job in an area where unemployment is so high.

But I didn’t start writing because I had a solution to the problem. Like the Liberals, I think it’s enough to point out Bill’s shortcomings… (Mm, Shorten’s Shortcomings! I may be able to sell them that one. They seem to have run out clever catch-phrases lately. I mean, “clean coal” is an oxymoron and makes about as much sense as “dry water” or “right-wing think tank”. They haven’t had anything like “jobs and growth” or “Innovation rules, ok” for over a year!)

The big problem with the policy Labor took to the last election is that only allowing negative gearing on new construction is that it would bring down the price of houses. And this won’t help affordability. Why not? Well, it just won’t. Have I done any economic modelling? There’s no need for economic modelling because it’ll either just confirm what I already know, or else it won’t have taken into consideration other factors like the fact that it doesn’t confirm the assumptions that I started with.

If housing prices come down, then the value of the politicians’ property portfolio would drop by millions of dollars. And they’d feel poor, making them vulnerable to corruption. So by keeping property values high, then we’re helping to ensure the integrity of the Parliament. In fact, recently some politicians suggested that by giving people access to their superannuation, we could help push prices even higher and therefore our MPs would have even less incentive to accept a bribe.

But really the problem is now solved. The crackdown on 457 visas means that no longer will we have goat farmers, blacksmiths and various other occupations coming over and buying up all our houses so that they can use them to strike their spouses, practise female circumcision and deny their families Australian values.

Hopefully this doesn’t cause too much of drop in demand. I’d hate anything to reduce the wealth of our politicians, but I guess, if that were to happen, Malcolm would have a solution. If not, I’m sure Tony would have an idea he’d be happy to share.

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16 comments

  1. townsvilleblog

    The only problem is that Labor politicians no longer represent Australian labour, in fact they don’t have one politician in the House of Representatives who has been a worker. The Senate is slightly better with Senator Doug Cameron who has been a strong representative of working people and that’s it!
    The party needs to be democratized opened up so instead of being a party controlled by a couple of right wing anti-member unions, it becomes a people’s party that truly represented everyday Australians.

  2. Photontrace

    Right Wing Think Tank. My favourite oxymoron.

  3. bobrafto

    practise female circumcision

    Why is it so bad for females to be circumcised and for males it’s ok and for rabbi’s who perform this surgery on males also to give fellatio, not sure if it’s before or after and don’t care.

    just a thought.

  4. bobrafto

    a little clarification to my thought.

    I don’t approve of female circumcision.

  5. Zathras

    Female circumcision is not a religious practice – it’s an entirely cultural one.

    It dates back further than the Abrahamic religions and is not mentioned in any of them. It’s banned in several Christian and Muslim countries (including Iran) but quite common in some predominantly Catholic African countries.

    As for negative gearing, it was originally introduced to stimulate the construction of new housing and was initially successful.
    However it’s since become a generic system for tax minimisation and spread much further than Real Estate.

    So there are two myths that have generated their own alternative facts based on self-interest – one to bash a minority and the other to protect the status quo (probably the same thing really).

  6. Jaquix

    Back to negative gearing – I like Labor’s policy overall, though I think they need to do a lot more work on selling it, and drowning out the Liberals Mums and Dads rhetoric. Though I do think perhaps one property per person (Australian resident!) might be permissible. Many people who have jobs which mean they get transfers to various places (eg policemen, nurses and many others ) could then buy the one property for their future use. But clearly Labor has now identified several other areas which are overheating the market, especially self managed super funds borrowing for residential housing. Here again, I think there could be room for them to buy their own premises, with limits on the amounts able to be borrowed, but otherwise its just pure speculating.

  7. Graeme

    The fact that many of the politicians take advantage of NG/CGT arrangements is almost a red herring isn’t it? The real battle is between raw party politics verses the good of the nation. They just see the short term effect on their cronnies and the party faithful. We are allowing ourselves to be lead by short sighted fools.

  8. RonaldR

    (this is an article I wrote for elsewhere but seeing this article is questioning Labor and Labor needs a lot of questioning as Labor is not what you think whether for or against them)
    The Problem with Labor is in the 80’s the Labor Party was hijacked and ALP now stands for what Labor has become Another Liberal Party but there are some differences. Old Labor called nicknamed our enemy “The Money and The Power” Labor Party now has adopted The Money and Powers policies that keep the control of Australia in Foreign Hands -*FREE TRADE (Labor supported what would have been a complete disaster for Australia the TPP Rudd & Shorten big supporters of it)
    *Floating Value of our Currency that gives control of our economy to Foreign Banks and Speculators.
    * Very Week Bank Regulations and Protection of the Banks NOT the Australian People. The legislation that is the Biggest Threat to The Money & the Power is Glass-Steagall Bank separation and Labor is against it especially Shorten and Rudd. Rudd & Gillard at the G20’s Voted the same way as Abbott/Hockey did they voted to support the same policies as the other pair had.
    *Labor supports the looting of our Resources
    *Labor supported the 457 Visas
    *a Labor PM weakened the Australian Unions so Howard and the Liberals could kick walk all over them.
    THE ALP HAS TO BE DIFFERENT TO LNP ON THE OUT SIDE.
    There are every day areas where the Money and the Power does not fully control this allows the members of Parliament to THINK they are running the Country as if The Money & the Power did not allow this to happen Australians would start to see they have been coned and how dumb they have been.
    SO WHAT IS THE ALP NOW? It can be split in to 3 groups at the top on economics and Ownership of Australia it is Another Liberal Party
    The Middle Group is its Labor policies smoke and mirrors to fool people that it is still the Labor Party
    The 3rd area of this hijacked Labor Party is Labor going Green adopting the Policies of the Green Movement the Money and the Power are behind the Green Movement
    THE MONEY AND THE POWER control the World Financial System (except for in China , Russia and Iran) but the world financial System is on the edge of Collapse(in the past when it has looked like collapsing they have started wars or Major conflicts ) They are behind Terrorism. The created the Green Movement as a TROJAN HORSE to allow them to rebuild another Movement.
    We are just lucky that they have made so many F—k Ups and due to the Nature of Man they have not been able to obtain 100% Control there has been a fight against them for 100’s of years. But if People were not so Dumb and self-centred they could all be on the same page and see what a wonderful world we could have no poverty and no conflict. They would all combine to defeat the Money and the Power and end it for ever one of the First Road maps towards this was written by Nicholas of Cusa a 15th Century German Roman Catholic cardinal and Scientist.
    I was like everyone else until a period in my life I was not very mobile and had time to smell the Roses but that is not what I smelt that there was something horribly wrong Australia was going down Hill and it did not matter if it was the LNP or ALP in Government. I had the time and started looking into it , I had recently decided to stop reading Fiction(I was a heavy reader of fiction but as I looked I found I was only scratching the surface, I also started taking a closer look at myself and found my belief system was all over the place. My reading and research showed our belief systems have been corrupted since a very early age.
    You could read a sentence and you agree with it and it just feels right and easy to believe but then you recently have read the other side of the Coin and that sentence or Paragraph is completely wrong but so easy to accept. But to learn the truth cannot be done with just another sentence or Paragraph to get you to believe the truth you have to read at the minimum. I would have given up but found an organisation that had decades of research but did not fully trust them that took a lot of reading and research plus there was a lot of Bullshit written about them. But then I came across one of their publications that painted a picture of what Australia could be and it also painted the road map but if they were what the misinformation called them they would not have given the Road Map. And the Man at the Top of the Organisation and 53 affiliated organisations around the world who was a blocking point for me at the start but my opinion of him had to be right as our opinions are more important than the truth. I now consider him the Greatest Man in my life time. If I had been born earlier there would have been two other men for me to consider but one stood out and the 2nd man was on the same page as the first and both from different countries from my reading I believe both of them were ever poisoned or infected but that is my personal Belief and Just a Conspiracy theory as I don’t have the proof but knew it when I found what I believed the real reason another great man was killed. (don’t ask me who they were as I don’t publish conspiracy theory’s as they stop people learning the truth even though they get people asking questions)

  9. Maeve Carney

    There are theoretical health benefits for male circumcision, like a reduction in penile cancer and a reduction of the spread of HPV. However, there are absolutely NO benefits at all for female circumcision and there is a whole lot of evidence to suggest that it causes incredible life-long pain and suffering to the woman as well as vastly increasing the risks of both infant and maternal mortality and morbidity. At it’s more benign it significantly reduces or eliminates a woman’s sexual functioning. Comparing male and female circumcision is like comparing apples and oranges. For the majority of female circumcision cases there is no male equivalent because no culture requires the removal of the head of the penis and no functioning part of the male genitalia is routinely stitched closed and unstitched to allow for natural functioning. I don’t agree with circumcision at all and I really don’t agree with people who choose to downplay the utter horror and mutilation suffered by women by comparing it to a male circumcision. Neither my husband nor my three boys are circumcised and they are smart enough to know how to use soap and water appropriately.

  10. leighton8

    Very well put ….

  11. John Boyd

    It’s Armidale not Armadale, and raves like those of townsvilleblog, and RonaldR are a waste of space.

  12. olddavey

    Phonotrace:
    “Right Wing Slime Bucket” is a much more descriptive term!

  13. nurses1968

    RonaldR
    What can I say?
    that was a bloody waste of a few minutes digesting and regurgitating all that :-{

  14. bobrafto

    Maeve Carney

    As I said it was a thought and agree with you entirely, but just imagine if a Muslim was to circumcise a male then give it a head job like the rabbi’s do, imagine the howls from rwnj’s.j

  15. Roscoe

    you forgot ‘Australian Values’ see? they have come up with something new since Jobson Growth

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