It’s Not Just The Gearing That’s Negative!!
Oh no, it wasn’t the government who asked for Treasury to look into the possibilities around changing the tax benefits of negative gearing and capital gains. It was actually David Pocock and Jacqui Lambie, but let’s not let the facts get in the way when there’s such good news on inflation…
All right, you got me! I know that there’s never any good economic news and you can always expect the media to double that when there’s a Labor government, but the fact is the inflation rate came in at 2.7%. This is one those Schrodinger’s Cat things where the cat is both alive and dead. The reduction in the inflation rate is no thanks to Labor AND it’s only within the RBA target range because of Labor’s energy price relief.
The Fin – which is what we capitalists call “The Australian Financial Review” – had an interesting article talking about negative gearing and how it was popular when Labor took it to the election in 2016 but it cost them victory in 2019 when it was unpopular.
I know I’ve made the point often, but retrospectivity is almost as useful as hindsight when analysing the past and trying to wrap things up into a single narrative. As with the infamous 2004 Latham handshake being the turning point where Australia realised what an aggressive tosser he was, it’s always convenient to pretend that everyone in the whole country came to the same conclusion about the same issue at the same time and it was all down to that one thing and nothing else. Yes, it’s like a football game where we analyse the mistake in the dying minute and blame the umpire, the player who took the shot instead of passing it, the player who passed it instead of taking the shot or the other thing that would have ensured victory. However, this overlooks that there were thousands of other decisions, all of which had some effect on the outcome.
Did negative gearing really cost Labor the election, or was it the franking credits? Or was it that fetching photo of Jane Hume with that very attractive “Back In Black” mug that foreshadowed how we’d all be mugs for believing that Josh would actually deliver a surplus. Whatever it was, I promise you it wasn’t a single thing and whether Labor could take a policy on negative gearing to the next election without losing is one of those things we may never know because I doubt that Albanese will take the risk. I mean, it’s usually the Opposition who adopt a small target strategy where we don’t know what they’ll do in government, but Labor seems to think that it’s a good idea because it got them elected and why change a winning formula.
Still, the whole negative gearing kerfuffle is symptomatic of all that’s wrong with politics in this country. If we think back to many of the recent political arguments they concern a whole range of things that most people wouldn’t argue about. For example, the whole marriage equality thing took ages even though all the polls suggested that most people had no problem with it for two basic reasons: it seemed fair enough to let consenting adults decide whether they wanted to marry or not and, apart from that, it didn’t really affect them personally so why object? Yes, some people did seem to suggest that people would be marrying their pets next but, as I said at the time, if you can find a dog who can give informed consent and sign the papers, I’ll back that marriage too.
And let’s not forget that most people wanted something done about climate change but it took ages for the major parties to agree to net zero by 2050, with the Coalition only agreeing to it on the grounds that they didn’t have to actually do anything about it.
So as we potentially move on to a debate about negative gearing, we’ll have The Greens saying this was all our idea and it’s about time Labor caught up, only to have some with a long memory pointing out that Labor DID take a policy on it to the 2019 election where The Greens were more concerned about “Stopping Labor’s Adani Mine”. With The Greens and Labor fighting over whose idea it was and whether any policy proposed goes far enough, we have the wonderful Coalition of the Unwilling grabbing their chance to mount a scare campaign about how any change to negative gearing would lead to an increase in rents because all the mum and dad landlords will sell up causing a shortage of rental properties because they’ll be bought by people wanting to live rather than those wanting to make a profit… or rather those wanting to make a loss because that’s the whole idea of negative gearing. You lose now to take it off your tax and then you make a capital gain when you sell, but you get a discount on that capital gain because that’s only fair because you’ve been providing a place for someone to call home.
So rather than an argument about the pros and cons of making changes and a reasoned examination of what might actually work, we have The Greens insisting that it needs to be changed, Labor not prepared to openly say that they’re considering anything at the moment and the Liberals saying they’d welcome an election fought on negative gearing because that would enable them to be negative without actually coming up with any solutions.
To quote Michael Sukkar, “If someone’s allowed to negative gear their share portfolio, a mum or dad should not denied the same opportunity with owning an investment property.”
Mm, does this mean that while we can’t deny “mums and dads”, all those childless people can be discriminated against?
P.S. After I finished, I saw this on X. It does make one want to ask, if the Greens are as powerful as Max suggests, then why have they waited so long? (Yes, yes, I know!)
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Terry Mills
Return to home pageI seem to recall when Labor did take this to the election in 2019 it was also not going to be retrospective, that it would only apply to houses purchased after the legislation.
Unfortunately the Murdoch trolls, with their lies and misinformation, had everyone losing it, which is why Labor failed.
The Murdoch trolls are continuing to do this with the current discussion on negative gearing.
Sooner the better for NG changes so it is the same as the rest of the world, instead of our very generous tax avoidance scheme
Although there were small $500 grants for first home builders back in the late 60’s (I got one),this home owner/voter boondoggle really took off under the lying rodent and pea heart Costello.The then mining boom had them swimming in loot ,with which they bought several elections, added to the “free money” for home buyers ever since.Not to mention this negative gearing, capital gain discount,which now sees speculation in housing second only to resource robbery.
And here we are,all these years later, with a ridiculously inflated housing market, and a government shit scared to tackle it, because of the expected pile on by Boofhead’ s gaggle of fuckwits and their media enablers.This shit lies squarely with fucking Howard and Costellot.
On a side note I notice that the latest half wit to get the gig in the NT, has offered up to $50,000 for first home buyers/builders….That should keep the prices down.Will they ever fucking learn?
PP It seems RW MSM content is chosen and slanted to attack and wedge anything ALP & centrist.
Andrew Smith,
Funnily enough, it seems the RW MSM is also very big on promoting exponential growth whilst simultaneously ‘externalising’ all environmental issues.
Go figure.
Andrew and corvus, the RW MSM has a daily raffle to see who gets the neuron for the day.
Some years ago I asked my accountant what negative gearing could mean to me in my retirement.
He explained that first I had to make a bad investment in a real estate property – so bad that the rental income would not cover my mortgage repayments let alone insurance and the inevitable costs of repairs and maintenance.
I asked him why would I make such a silly investment in the first place ?
He patiently explained that due to the magic of negative gearing I could share my misfortune with other taxpayers by writing off my annual losses against other tax obligations I may have.
I asked why on earth would the government encourage me to make a dodgy investment and then, when it failed to produce a return, subsidise my stupidity?
He rolled his eyes and told me that by overpaying on a residential property I was providing a needy family with a home to rent and the government would be rewarding my philanthropy.
I then asked him : but if I hadn’t bid over the odds for this clapboard dream home, the struggling family may have been able to buy it and thus avoid having to pay me rent and remove the need for the government to subsidise me.
He told me that I was a Leftie loser and that I had the wrong attitude to life and that I should join the Greens !
Oz is a curious mindset.
Set up and ruled by those the English hate and want to get rid of, colonized by those the English hate and want to get rid of. The colonizers used for free to clear the joint out of everything native. Left to starve whilst everything the colonizers find or make is sent back to England. When gold is found, give guns to and use those that hate England to beat the shit out of those that hate England and found gold.
When the very critical mass of England haters reached a point of no return, constitute a federation for self-determined freedom, provided, English law is maintained, the English Crown owns all the land and resources, that the colonizers feel free to hate England provided they pay ever-increasing taxes and remit to England anything England wants. And when England embroils itself in wars, to send all our sons away as cannon fodder for other England haters.
Over time there became in Oz an accumulation of toadies to England, those that would ignore nature and seek to fashion everything in the image of England, except of course all the vast useless, desert and very hot areas, only of interest to pastoralists who acquired it for pennies and by blood. English entrepreneurs came to put their sticky noses in, like Vestey and McAlpine. Vestey especially, the freebooting pastoralist, who of his very English nature required a source of black slaves to facilitate his operations. During the halcyon years of the toadies, great heights were attained by Pig Iron Bob, who from the comfort of his imported pouffe, gave vast tracts of useless land to Lang the exterminator, thereby setting apace the defrayal of hatred to a new guard of oligarchs. A phenomenon that had previously so captured the imagination of America, who also hated but conveniently press-ganged England. And Oz too!
Now that the world’s gone mad with love being curtailed by aspiration, whinge and vengeance, it appears that even Oz is not immune. Despite England becoming spent rubble, and America determined to do the same, the importation of new-hate and vengeance is increasingly causing Oz heads to aimlessly spin and spew vomit with no sign of an exorcist on the horizon.
Oz seems now to be a captured incurious mindset by rote.
Gosh, how unexpected from the Rupert nightsoil meedja:
https://www.theguardian.com/media/commentisfree/2024/sep/27/news-corp-warns-millions-of-renters-crucified-as-murdoch-papers-fan-negative-gearing-hysteria
First we were part of an Empire ruled by an Emperor or Empress, then we were a Kingdom ruled by a King or a Queen, now we are a country ruled by a …………………..