Buzzwords have been spurting out of this federal election campaign since day dot – innovation and choices, anyone? – but very few terms have been bandied about as much as “negative gearing.”
Oh yes, the system that allows property investors to just write off their losses, thereby encouraging them to, uh, buy more property, has been the topic of heated (read: frothing, frantic and livid) discussion for yonks.
That being said, Prime Minister Malcolm Turnbull and Opposition Leader Bill Shorten have used the lead-up to the July 2 election to make sure every human being on this big ol’ island know exactly where they stand on the issue.
While Labor have stated they’ll amend the system to pad the government’s coffers and maybe, just maybe loosen investors’ stranglehold on the housing market, the Coalition have been deadset in defending the scheme.
Turnbull and Treasurer Scott Morrison have gone as far to say any meddling would cause a disturbance in the financial force that’d make life harder for bang-average, middle-class “mum and dad” investors.
Labor’s negative gearing policy has some nasty consequences for every day mum & dad investors trying to get ahead. pic.twitter.com/fA5fxdWjze
— Scott Morrison (@ScottMorrisonMP) February 15, 2016
In an April interview, Turnbull said “there are well over a million Australians who have an investment property, most of whom are on average earnings, who have an investment property and they are negatively gearing it.”
Well, here’s the thing: the ABC have just obtained documents from the Treasury itself, showing more than half of negative gearing’s tax breaks go to the top 20% of income earners.
The docs themselves read “negative gearing benefits high-income families”, which was already known, but seeing that statement alongside another stat – the bottom 20% of earners only take 5% of the negative gearing tax benefits – somewhat diminishes the concept of humble middle-class investors comprising the bulk of negative gearers.
The whole issue of negative gearing was largely absent from tonight’s leadership debate, but oh boy, it’ll be interesting to see what tactics each side uses in the light of this one.
POLITICS. What a wonderful thing.
Photo: Glenn Hunt / Getty.