Budget 2016: Negative gearing and capital gains tax reform

New research shows that the top 10 per cent collect half the negative gearing tax deductions.

Following the announcement by the Federal Government on Sunday that it would leave negative gearing and capital gains tax concessions untouched, the Grattan Institute has released its latest report, Hot property: negative gearing and capital gains tax reform.

The report, which was shown to the Federal Government before the Sunday announcement, finds that the two concessions cost the federal budget $11 billion a year and changes to these concessions could save $5.3 billion a year. The research shows that the top 10 per cent of earners collect almost half the negative gearing tax deductions and three-quarters of concessionally-taxed capital gains.

Grattan Institute chief John Daley believes that a few small changes would make a huge difference to the federal budget going forward. Halving the 50 per cent capital gains tax discount over 10 years would raise an estimated $3.7 billion a year. While abolishing the income tax deduction after a phase-out period of years would tip another $1.6 billion annually into federal coffers. The effect on rents, house prices and development would be minimal.

The Grattan Institute research endorses Labor’s plan to cut the tax discounts for capital gains and to restrict negative gearing deductions to non-wage incomes, but its plan differs to Labor’s, in that after the phase-in period, existing investors would not be exempt, nor would those investing in new properties.

Read more from www.grattan.edu.au
Read more from www.abc.net.au
Read more from www.theage.com.au

Opinion: Concessions fit for a king

The Grattan Institute research is damning of a system where concessions have been set up to deliver benefits to everyone, but have resulted in benefiting those with the highest income.

The wheel just keeps on turning for those with the most power and money in Australia. We continue to see multinational companies pay just a fraction of the tax expected of them, making use of offshore loopholes, while small businesses make up for the shortfall. In addition, as shown in the recent leaking of the Panama papers, we continue to see high network individuals moving money offshore to avoid paying tax.

I’m not shocked or surprised to see the highest earning individuals in Australia taking advantage of these concessions, as they would be foolish not to. What I am surprised to see is our Federal Government taking no action to fix these concessions, which are costing it $11 billion a year to prop up the investment fund of millionaires.

What do you think? Should the negative gearing and capital gains tax concessions be changed immediately? Will the current Federal Government’s stance on this issue change how you vote at the next election?

Related article:
Cuts to CGT could save budget





    COMMENTS

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    MICK
    26th Apr 2016
    10:33am
    This report should come as no shock to anyone. Whilst some average Australians are able to take advantage of the capital gains tax concession it is the rich who flog it to death. One way to stop rorting from the big end of town might be to put a threshold of say $2 million for the concession.
    Labor put forward a sound proposal: end negative gearing for ALL NEW INVESTMENTS whilst leaving existing investments in place. Not unexpectedly the government, funded by the big end of town, has come out with its normal scare tactics to attack Labor for trying to fix a "budget emergency"......which never was. Lies, damned lies and Turnbull!
    Adrianus
    26th Apr 2016
    11:40am
    Once again there are those who are fooled into thinking that Labor will abolish Negative Gearing tax breaks on residential property. Why would Labor shut down a policy which favours high numbers of their voter base? Surgeons, Anaesthetists, Nurses, Teachers and Emergency Services Personel? MICK, best you read the report.
    Adrianus
    26th Apr 2016
    12:15pm
    MICK, you say "it is the rich who flog it to death."
    Where do you get this information? Unless you are referring to high income earners? That does not make them rich does it?
    It is often said that cash flow is the key element in any wealth creation plan, but high income is not equal to wealth.
    Bill Shorten has a very high income. Would you say he is wealthy? Would you call him RICH?
    Tom Tank
    26th Apr 2016
    12:19pm
    Ah Frank yet again you misread the situation, either accidently or deliberately.
    The bulk of the investment, in dollar value, are by wealthy people who have multiple negatively geared properties. They are the ones who are taking serious advantage of the system and are the ones Turnbull is looking after.
    Anyone who is on an after tax income of $80,000 has gross earnings well above the average. Do you have any idea how much a surgeon or anaesthetist earns? Not likely to be Labor voters I suspect.
    MB100D
    26th Apr 2016
    12:27pm
    Mick, Labour want to End Negative Gearing for Existing Houses and keep it in place for New Housing thereby stimulating the building Industry. That make a lot of sense to me.
    You are correct Frank, you should never equate High Income with Wealth, some those that do get a rude shock when the pay packet stops. Just ask some of the high earning miners that worked in the mines that have closed.
    Adrianus
    26th Apr 2016
    1:10pm
    Yes Tom Tank, you could be right? Perhaps after the way the HSU has treated it's members, the medical profession en masse may have decided to buy their Public Liability insurance somewhere else? But the odds are against that right? You are now assuming that only those on a low income Can be Labor voters? Regardless of their occupation? Well when I make an assumption at least the logic is sound. Most of my opinions are based on factual data.
    MICK
    26th Apr 2016
    2:02pm
    Here is what I found Retired Knowall. Straight from the Labor website: http://www.alp.org.au/negativegearing

    "Any argument that nurses, teachers or hairdressers losing out in the future is also false. All existing properties are fully grandfathered – and therefore unaffected - while the reforms simply change the direction of investment to new assets".

    I stand by my comment. The changes are aimed at NEW INVESTMENTS, not existing ones.
    Rae
    26th Apr 2016
    2:22pm
    I think you need to read it again Mick. The negative gearing will only be removed from wage earners. So that leaves corporations, trusts and off shore SIVs still able to claim interest as a deduction but the ordinary Australian worker can't. Seems really unfair to me. I won't be encouraged to support this one.

    Any really wealthy person not already a corporation, or running a trust structure or SIV would be pretty hard to find.

    This is another attempt to fool the naive that something is being done.

    I'm not negatively geared but I do have rental property and if I ever want to sell it will have to be to a corporation or trust as no worker would buy one. There would be no resale value. The property I hold is cheap unit accommodation for students or hospital staff and would not sell to a homeowner these days as they are much too fussy.
    MICK
    26th Apr 2016
    2:42pm
    Thanks Rae but did not read that at all. Think you may have misunderstood.
    I went straight to the Labor website and read the above. Did not see anything about what you mentioned. Not sure you could get away with that one either way.
    LiveItUp
    26th Apr 2016
    2:55pm
    Rae is right negative gearing is only useful for wage earners.
    Rae
    26th Apr 2016
    2:55pm
    Last paragraph on the first opinion. "restrict negative gearing to non- wage incomes". This would imply investors etc could negatively gear but income earners would be locked out. I could be wrong.
    LiveItUp
    26th Apr 2016
    3:04pm
    Agree Rae.
    MB100D
    26th Apr 2016
    3:42pm
    Mick, your statement is misleading as you stated Labour would end negative gearing for all new investments. New houses will still be negative geared.

    Straight from the ALP Web site:
    Labor will reform negative gearing and the capital gains tax discount to ensure that our tax system is fair, sustainable and targets jobs and growth.

    Negative gearing

    Labor will limit negative gearing to new housing from 1 July 2017. All investments made before this date will not be affected by this change and will be fully grandfathered.

    This will mean that taxpayers will continue to be able to deduct net rental losses against their wage income, providing the losses come from newly constructed housing.

    From 1 July 2017 losses from new investments in shares and existing properties can still be used to offset investment income tax liabilities. These losses can also continue to be carried forward to offset the final capital gain on the investment.

    Capital gains tax

    Labor will halve the capital gains discount for all assets purchased after 1 July 2017. This will reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50 per cent to 25 per cent.

    All investments made before this date will not be affected by this change and will be fully grandfathered.

    This policy change will also not affect investments made by superannuation funds. The CGT discount will not change for small business assets. This will ensure that no small businesses are worse off under these changes.
    LiveItUp
    26th Apr 2016
    3:58pm
    That Labor policy will favour those who borrow to invest as they will have more expenses to write off against their gains and therefore pay less tax.
    Richied
    26th Apr 2016
    4:06pm
    Removing CGT discount on existing properties (but not on new properties) may result in a two-speed property market (investors and owner-occupiers will compete for new properties, but investors will drift away from existing properties), may result in increase in knock-down/rebuilds (regardless of whether the existing property had passed its use-by date).

    A more effective policy would be to either abolish the discount altogether, or to restrict the value of the property.
    Anonymous
    26th Apr 2016
    5:25pm
    Selective information taken out of context MICK is almost the same as telling little porkies. As to the grandfathering content, that has also been placed there to protect politicians who already enjoy negative gearing. Just Google "Register of Members' Interests - Parliament of Australia" to find out which pollies are enjoying negative gearing.

    What the Labor website doesn't go on to explain is that whilst nurses, teachers or hairdressers can keep existing negative gearing, they cannot buy existing homes in the future and will be required to purchase new homes in future. The moment that a new home has been bought it immediately becomes an existing home and resale is limited to only non-investors.

    Here's the broken record again asking somebody, anybody out there to define "rich". Labor says it's over $180,000pa yet Shorten on 3AW stated to Neil Mitchell that he considers that earnings of $180,000pa is not "rich".
    niemakawa
    26th Apr 2016
    5:41pm
    Old Man: All Australians are rich , just that some more than others. That is the way a healthy economy operates.
    Anonymous
    26th Apr 2016
    5:48pm
    Thank you niemakawa, you have just balanced the budget. As all Australians are "rich" they will no longer be eligible for any government support payments. Your comment is fatuous.
    MICK
    26th Apr 2016
    8:22pm
    You are correct Rae. I missed those 2 words. Cannot believe that any pollie would think that this was acceptable.
    MICK
    26th Apr 2016
    8:27pm
    Knowall: I think that I have got it right. The issue is about grandfathering existing negatively geared property. That is Labor policy from what I can see.
    New properties? My understanding is that Labor would only make it available for new properties, not already established ones.

    26th Apr 2016
    11:08am
    Typical LNP stunt. A manuver for mates.
    MICK
    26th Apr 2016
    2:03pm
    Turnbull is shaping up the same as his predecessor: a liar in front of the cameras. His misrepresentation about negative gearing is but one of a growing list.
    Adrianus
    26th Apr 2016
    11:12am
    The Grattan Institute Report also indicated house prices would only decline by 2%. I'm sure we can all afford that.
    Adrianus
    26th Apr 2016
    12:17pm
    Labor wants to make housing more affordable for those who cannot compete with overseas buyers, so this report does not favour Labor's rhetoric.
    KSS
    26th Apr 2016
    1:27pm
    If that were true Frank, why have Labor not 'promised' to stop foreign ownership of housing, or at least limit housing ownership to Australian citizens thereby excluding overseas investment in Australian property, Australian residents without citizenship, international students (or at least their overseas parents), temporary and permanent residents and absentee foreign landlords?

    No it suits them better to continually push the 'rich bad', 'poor good' ideology and prop it up with promises of more handouts to the 'poor'.

    And by the way, when the NSW Government stopped the first time home buyers subsidy on existing property in favour of new properties, it did NOT reduce the price of existing properties at all. It simply locked first time buyers out of housing altogether since they could not afford the high cost of new developments! What makes you think this would be any different?
    MICK
    26th Apr 2016
    2:06pm
    KSS: both sides refuse to stop foreign ownership. AS I keep saying: vote Independent and end the game.
    As for your comments about existing properties still rising in value this is the result of decreasing interest rates. Investors are chasing a return and potentially a (small) capital gain. Your spiel is not correct.
    Anonymous
    26th Apr 2016
    5:33pm
    Don't speak for me Frank or for my family. In case you are not familiar with how a mortgage works, lending institutions expect a borrower to have a percentage of deposit in a home. If a property which supports the mortgage falls in value, the mortgagor can do one of two things, ask for the loan to be reduced or force that sale of the property.

    You might note that the Grattan Institute actually stated that there would be a fall of an AVERAGE 2%. What they didn't tell us was the maximum figure that some properties will fall. This would have been helpful when viewing how the average was struck.
    Adrianus
    26th Apr 2016
    6:36pm
    Old Man I am very familiar with mortgages and LVRs. I am very familiar with delinquent accounts and how they can occur as a result of property devaluations. My point is that while Labor's so called plan to make housing "affordable" is not entirely understood by those who own property. The devaluing of property? This is something that nobody can really afford.
    Cautious
    26th Apr 2016
    11:12am
    Why would we trust the Grattan Institute to deliver an unbiased no personal agenda report?
    One point of confusion - if the aim is to deliver more affordable housing, how exactly do you do that with a minimal impact on house prices?
    Another small question - is everything factored in, such as the lost stamp duty when the property market actually does crash?
    I do like the idea of a threshold on negative gearing on the top 10% but I would like some unbiased information which I am never going to get.
    MICK
    26th Apr 2016
    2:07pm
    I kind of agree although on negative gearing the institute seems to have gone against the Party line. Not too sure what to make of that.
    Rae
    26th Apr 2016
    2:28pm
    Restricting negative gearing of property would distort markets. I'm assuming shares and bond portfolios bought with debt would still be deductible.

    Overseas property trusts and corporations would end up owning most of the rental unit market and could buy at a discounted price.

    The Grattan Institute has really not considered the consequences if my take on this is correct. Corporations and Property trusts can still claim for gearing but wage and salary earners can't.
    MICK
    26th Apr 2016
    2:45pm
    No Rae. You have this wrong.
    Wstaton
    26th Apr 2016
    2:49pm
    I like the bit "removable will distort the market" isn't this exactly what negative gearing did when it was first introduced.
    Richied
    26th Apr 2016
    4:09pm
    Yep - that's the problem with the current CGT discount. There is no corresponding policy that ensures that investment properties are affordable, so wealthy people invest in top-end properties and get massive CGT discounts.
    Adrianus
    26th Apr 2016
    8:18pm
    Yes Rae a corporate investor under labor would continue with tax breaks from gearing while the individual will have no such benefit, unless of course they get in now. So some individuals will get a btax deduction and some will not in future. This will cause some angst in social circles. But the same thing happened with solar panels generating power to the grid for some while others are paying for it. Labor is a divisive political animal.
    MICK
    26th Apr 2016
    9:40pm
    And you Frank are a paid political stooge. The next advertisement from the government.
    Paulodapotter
    26th Apr 2016
    10:57pm
    The Grattan Institute has no vested interests beyond research, accurate or inaccurate. They are not an arm of the ALP. If they were Malcolm's wife, Lucy, would not be on the board.
    Adrianus
    27th Apr 2016
    10:43am
    They are Victorian Public Servants. No they wouldn't have anything to do with the union movement......no.... lol
    JOHN T
    26th Apr 2016
    11:13am
    The proposal to leave negative gearing and capital gains tax once again is geared to help those who have the most at the cost of those who have the least .
    Do not be fooled by scare tactics and blatant lies about lower house prices and if you think about it houses where always priced to suit incomes negative gearing gives an unfair advantage to cashed up buyers .
    MICK
    26th Apr 2016
    2:08pm
    I agree. Turnbull is again looking after the big end of town and the free ride will never end under this government. The only thing ordinary Australians will ever get is more new taxes.
    Paulodapotter
    26th Apr 2016
    10:58pm
    Yep, but not because he wants to. His rediculous right minders dictate his stance.
    MICK
    27th Apr 2016
    8:23am
    Turnbull is another puppet. The reason he lost the top job a few years back is because he tried to govern for the nation. Now he is but another stooge working for the big end of town.

    26th Apr 2016
    11:19am
    The Liberal Government only looks after the rich and makes them richer. That has always been a known fact. Why on earth would a Prime Minister that hides his wealth off-shore do anything different? The rich don't want less, they always have to have more.
    KSS
    26th Apr 2016
    1:36pm
    There are no 'rich' under Labor then Jackie?
    MICK
    26th Apr 2016
    2:11pm
    Labor does not move vast amounts of money to the bank accounts of the rich. The coalition always does do this or tries its darndest to.
    At least with Labor you get a fair go. Don't ever expect that under any coalition government. It will not happen other than bribing the electorate (Paid Parental Leave Scheme???) by buying votes to get back in. And betrayal!
    LiveItUp
    26th Apr 2016
    3:13pm
    Oh dear Mick you are in for a shock if you think Labor is going to be any different from the LNP.
    MICK
    26th Apr 2016
    8:30pm
    Labor will not be working day and night thinking of ever more ways to tax the poor and give the rich tax breaks like the current big business owned crowd. There is a difference!
    Paulodapotter
    26th Apr 2016
    11:00pm
    Yep, they must look after their voting base and Bonny has to look after her day job. How much an hour do the LNP pay you to write such drivel?
    Kaz
    26th Apr 2016
    11:20am
    And isn't it all relative? If you sell your house when it's worth less, don't you buy another house that's worth less than it was?

    I know, sorry that you paid more for it, but everything in life is a gamble
    Adrianus
    26th Apr 2016
    11:29am
    No Kaz, we always buy a house which is worth more. That is the reason for selling the existing home.
    KSS
    26th Apr 2016
    12:17pm
    Unless you are downsizing Frank or perhaps moving interstate or to a less expensive area and a hundred other reasons surely.
    Adrianus
    26th Apr 2016
    12:32pm
    Statistics show that People change houses every 7 years and the overwhelming reason for change is to upgrade. I know a couple who buy a new house every 3 years. It helps them to have a spring clean because they're not big on regular house cleaning.
    MICK
    26th Apr 2016
    2:12pm
    Frank: what a dumb thing to say. People upgrade whether values go up or down. Kaz is correct.
    Kaz
    26th Apr 2016
    2:17pm
    Thanks Mick
    Yes you can still upgrade but it will be worth less relatively if the decrease is across all markets
    Rae
    26th Apr 2016
    3:46pm
    I'm afraid I have never understood the buying a bigger, better house every few years thing. As far as I can see the home is a liability and the more it is worth the greater the liability.

    Instead if you bought income producing assets there is a point when you can live in just about any house anywhere you want.
    Richied
    26th Apr 2016
    4:42pm
    The economics of buying a bigger, better home every few years is to increase the amount you can gain.

    If I have a $200,000 house, I borrow 50% ($100,000) and I pay 5% interest, if it increases in value by 8%pa, after 5 years I will have paid $25,000 interest (assume interest only) and the value will have gone up $93,800.

    After 5 years, sell it and pay back the $100,000 borrowed. Your nett worth is now around $180,000 (taking into account selling costs), for $25,000 outlay - ie. a $55,000 profit (or about $40,000 adjusted for inflation).

    Do that again, this time buying a $360,000 property (again, you're borrowing 50%, and after 5 years your nett worth will be around $320,000 (for a further $99,000 profit).

    In other words, after ten years you've turned your $100,000 into $320,000. If you stayed with the first house, your nett worth would only be $215,000.

    Definitely not a liability to upgrade every five years.
    LiveItUp
    26th Apr 2016
    5:50pm
    You might be better off keeping first house and using the increase in equity as a deposit for the second house.
    Richied
    26th Apr 2016
    6:15pm
    Well that's another investment strategy. My post was to give an example to Rae as to why people change houses every few years.
    Adrianus
    26th Apr 2016
    7:07pm
    I agree Rae. I don't own a house atm.
    MICK
    26th Apr 2016
    8:33pm
    Rae: you are missing one very important point. The family home is not subject to capital gains tax. So it can actually be treated as an investment by upgrading and then late in life selling to free capital. All tax free. Not a bad strategy when you think about it. Only problem is you give up a lifestyle to downsize.
    Adrianus
    26th Apr 2016
    8:43pm
    MICK that is a big mistake on a number of levels. I know of people who did that but I don't think it made them wealthy. You need to stop listening to RE Agents and start collecting high income yielding assets. Collecting MICK, not selling!
    MICK
    26th Apr 2016
    9:43pm
    Package it any way you want Frank but no tax is payable. Fact!
    High income assets are great but I have noticed for many years that the rich get first bite at everything and the spoils are left for everybody else. Please do not lecture me about "high income earning assets" mate. I understand the game.
    Boof
    26th Apr 2016
    11:28am
    We live at West Gosford/Point Clare. Aged pensioners & those without transport, have to get a taxi, to go out for dinner of a night, visit Sydney or New Castle, becase there is no bus that runs between Woy Woy & Gosford. $20 upwards each way. Libs are building multi million dollars stadiums & entertainment venues in both towns. People can't get there. Big end boys still getting their $'s. Hon Cathy Smith. MLC Gosford, knows Mike Baird will do nothing, as we voted out his cronies last state election. Similar to Commonwealth Libs. Look after the big end of town. The poor people can beg.
    MICK
    26th Apr 2016
    2:12pm
    So how you gonna vote?
    Cruiser
    26th Apr 2016
    11:35am
    Leave things as they are, I am sure the Govt could find another $5B from the aged pensioners.

    You vote the existing mob back in you know whats coming your way.
    MICK
    26th Apr 2016
    2:13pm
    And much worse Cruiser. Guaranteed.
    Kaz
    26th Apr 2016
    2:19pm
    Worse because, as Howard did, they take it as a given that you support what they did and they have s 'mandate'
    Boof
    26th Apr 2016
    11:37am
    BTW People in Gosford area have been asking for a bus of a night between G. & Woy Woy for 35 years. A lot, now have moved or are dead. Baird said. "Not necessary It is nothing to do with infrastructure". LNP Have the same agenda, whether State or Federal.
    KSS
    26th Apr 2016
    12:22pm
    And yet still people choose to live there. Please Boof do not confuse State and Federal issues. Busses are provided either by NSW Transport or private contractors. I would suggest lobbying there, even if it takes another 35 years if needs be.
    Adrianus
    26th Apr 2016
    1:16pm
    Boof, In the last 35 years has there not been Labor governments in office?
    Farside
    26th Apr 2016
    1:28pm
    What is to stop the Woy Woy community putting a business case to local council for a community bus? There are plenty of councils providing a local bus with limited services.

    You can be confident that if there are enough votes in it then Council will fall into line and even subsidise the operations if necessary. Given the passage of time without it happening, my guess is there is either no business case, insufficient interest or the subsidy required is too high.
    MICK
    26th Apr 2016
    2:15pm
    I've read about Gosford (?) Council. Good luck. My understanding is that this council is a real basket case and that the shire is run by the real estate industry, not elected people.
    Paulodapotter
    26th Apr 2016
    11:03pm
    Aren't all councils run by developers? Mine is.
    MICK
    27th Apr 2016
    8:24am
    Ours is controlled by the real estate industry.
    BrianP
    26th Apr 2016
    11:41am
    Not changing negative gearing is just the Liberals trying to keep votes. Otherwise they would lose the election.
    bebby
    26th Apr 2016
    12:36pm
    BrianP, I agree
    MD
    26th Apr 2016
    1:44pm
    Listen carefully Brian --- I think I just heard someone call 'BINGO', obviously you have a winner somewhere in the ether !
    LiveItUp
    26th Apr 2016
    1:57pm
    It wouldn't surprise me to see Labor lose votes on their proposal as people realise that costs tend to flow down to the lowest level to be recouped.
    MICK
    26th Apr 2016
    2:19pm
    They are gone either way Brian. They lost trust when ABbott broke over a dozen promises as soon as he got in. Now Turnbull is in front of the cameras doing likewise.
    The electorate can see through lies and only the brain dead or rusted on Liberals will be voting Liberal a second time.
    As I keep saying.........vote INDEPENDENT with a Labor preference. The latter is important as there are quite a number of dummy LNP candidates been put up as Independents to funnel votes to the Liberal PArty. Do not be fooled!
    Rae
    26th Apr 2016
    2:41pm
    I'm a bit bemused as to why the Labor government would slam wage earners and boost the ability of property trusts and corporations to buy up rentals. Isn't Labor supposed to be all for the workers or is it just keeping wages low that they concentrate on. The Accord managed to ensure ordinary wages have kept going backwards for decades now.

    I'll be voting Independent as I believe both Labor and Liberal have lost the plot or sold out to the multi nationals.
    MICK
    26th Apr 2016
    3:59pm
    Agree Rae. Just make sure you ask where the preference is going as it appears the government may have set up some sham candidates to funnel votes to itself. Make sure for this election that preferences direct to Labor, not Liberal....unless you want to preference Liberal.
    FM
    26th Apr 2016
    12:03pm
    Another think tank opinion presented as if it is divine writ. Who pays for John Daley’s opinions? In this case it looks like it fits the Labor Party platform. We have an endless run of political parties floating ideas through proxy think tanks. This same Grattan Institute led by ‘leaking tax’ Daley spent the past two years and advocating higher taxes for retirees, tax on the family home and generally denigrating retirees.
    I am not expressing an opinion on whether negative gearing should go or stay but I don’t think abolishing it would make a great difference to investment in property. You would have to have very significant losses on an investment or multiple loss making investments before you would be in negative gearing territory. This would create a risk that might be hard to cover if the property were vacant. If building write offs are used to diminish income so that it can be negatively geared significantly more capital gains tax will have to be paid when it is sold. A strategy of selling a property every six years, as Mr Daley refers to, to buy a new one would be a loss making strategy when you take into account capital gains tax, real estate fees, legal fees and stamp duty, unless it is in a period of high property inflation. The property cycle is such that after peaking, property values generally decline and take up to ten years to peak again. Most investment property is not negatively geared or ceases to be after a few years. Abolishing it would probably not greatly change the number of people investing in property as tax deductions remain. For many it is a way of saving for retirement when other forms of superannuation are inadequate or for getting into the housing market.
    MICK
    26th Apr 2016
    2:21pm
    You wouldn't want any opinion which does not sing the praises of the government would you. Same deal with ABC. Abbott tried to close ABC down because it allowed both sides to have an opinion and we all know that the vast majority of media in this country is controlled by right wing sympathisers and cronies. Just turn on 7 and 9 News and that will be quite clear.
    Paulodapotter
    26th Apr 2016
    11:07pm
    Always follow the vested interests on any argument. FM is a good example. The Grattan Institute has no vested interests other than to research economic issues for government information unless of course FM can prove otherwise.
    Not a Bludger
    26th Apr 2016
    12:05pm
    Another moan from the LEFT LEANERS at the rent seeking Grattan Institute who seek only to redistribute other peoples' hardearned.

    Why is it that you editors only publish left wing views?
    Tom Tank
    26th Apr 2016
    12:23pm
    Could it be that because you, Not a Bludger, that you are so far to the "right" that any view that does not accord with yours must be "left wing".
    LiveItUp
    26th Apr 2016
    12:43pm
    Even if they redistribute wealth it will eventually find it's way back to it's rightful owners.
    MICK
    26th Apr 2016
    2:22pm
    What a joke Bludger. The right demands ONLY its propaganda and the left is mostly denied a voice. You would know that.
    Richied
    26th Apr 2016
    4:44pm
    Interesting that the other day everyone was lamenting the right wing views about reverse mortgages and using family homes for aged pension asset means test. :-)
    Paulodapotter
    26th Apr 2016
    11:08pm
    Speak for yourself you right winger you.
    LiveItUp
    26th Apr 2016
    12:42pm
    Government is definitely doing the right thing here. Without these concessions these rich will think to themselves why should I take the risk with residential rental housing as there is nothing in it for me? Who is going to be the loser if this happens? Not the rich or high income earners but those who rent. Less rental properties for a growing demand is not a good thing for rental prices.

    Better investments are available without the risks and hassles of tenants and agents.
    MICK
    26th Apr 2016
    2:24pm
    Yeah Bonny............wouldn't want you not to have your deductions. And of course negative gearing extends to all financial products.
    LiveItUp
    26th Apr 2016
    2:51pm
    Negative gearing is of little use to me now I am no longer a wage earner.
    MICK
    26th Apr 2016
    4:00pm
    BUt you do have investments on borrowed money from previous comments.
    Richied
    26th Apr 2016
    4:51pm
    Actually Mick, negative gearing extends to ALL investments (including business investments). That part of the system I think is actually a level playing field.

    I do think discounts on CGT is flawed, as it encourages investment in property without a corresponding policy to ensure investment in affordable housing (the primary argument for both sides to support the discount, given governments are moving away from providing public housing).
    MICK
    26th Apr 2016
    8:36pm
    As I have indicated elsewhere here RIchied the current CGT rules came about with the abolition of indexation. I think that I have that right. Indexation was a much fairer system when disposing of assets but the incumbent government from recollection made more money out of giving a 50% CGT deduction...and only against a capital gain somewhere else. Something not every taxpayer has. Only the rich...again.
    Paulodapotter
    26th Apr 2016
    12:43pm
    Why am I not surprised the silver spooners will go to extraordinary lenghts to protect their power base? The gullible middle class will most probably swallow the bull dished out by the LNP while the LP will struggle to articulate its policies out of fear of treading on toes. More of the same ol', same ol'. God, I hate Australian politics.
    Paulodapotter
    26th Apr 2016
    12:47pm
    I'm one that takes advantage of negative gearing and I say in no uncertain terms negative gearing advantageds the rich at the expense of the poor who have to pay more to cover my tax concessions. Why you idiots put up with it is beyond my comprehension.
    LiveItUp
    26th Apr 2016
    12:53pm
    Negative gearing and capital gains tax concessions actually help the poor more than the high income earners. They help to provide housing for those who either can't afford or don't want to own their dwellings. Why would anyone want to own rental properties if the government is going to tax their gains and give no incentive to own them? I certainly wouldn't want to own any rental properties.
    Paulodapotter
    26th Apr 2016
    1:00pm
    That's absolute rubbish Bonny. Rental properties exist because there is a distinct advantage to investing in property regardless of negative gearing incentives. Rental properties covered rental requirements before negative gearing and restrictions limited to new dwellings will actually promote more availability. You obviously have a selfish interest or you would not be promoting this nonsense.
    LiveItUp
    26th Apr 2016
    1:11pm
    The nonsense being promoted is that negative gearing and capital gains concessions help the rich. They only use them as tax structures to save tax. Why would one continue to buy rental properties if this tax structure no longer exists? I certainly would not.

    I have no interest in negative gearing as I don't have any geared properties. I do know however that if people don't invest in rental properties then that will make the rental property shortage a lot worse.
    Adrianus
    26th Apr 2016
    1:19pm
    No Paulo, we all pay more tax when Labor wins an election.
    KSS
    26th Apr 2016
    1:43pm
    Paulodapotter, leaving aside those who may be philosophically against home ownership, if there were no property to rent because investors sold out after losing negative gearing, where would 'the poor' rent their homes?

    One assumes of course that 'the poor' would still be 'the poor' and still unable to buy their previously rented home at any price. Or even if the owner kept the property, rents would rise to cover the true cost of investment ownership.
    LiveItUp
    26th Apr 2016
    1:53pm
    Agree instead of our tax system subsidising negative gearing and capital gains the true cost of providing rental properties will soon be seen by rising rents. That does nothing to making housing more affordable.
    MICK
    26th Apr 2016
    2:26pm
    You post a lot of crap Bonny. Investors are in it for the capital gain and return on capital. They would still be investing if there were no negative gearing.
    LiveItUp
    26th Apr 2016
    2:34pm
    But if the capital gain and return on capital are now being taxed just like income so why be in it? It becomes easier just to pay the tax on the money in the first place. This doesn't help people find affordable housing with the supply of housing drying up.
    Wstaton
    26th Apr 2016
    3:27pm
    It would appear KSS that people found homes to rent before negative gearing was ever thought of. Apart from this there were less people looking for homes to rent as more people as a percentage owned their own homes.
    Wstaton
    26th Apr 2016
    3:34pm
    And why shouldn't they pay tax on capital gains. After all it is income.

    Are you also saying now that homes are now affordable for a lot of our youngsters trying to buy houses population? I suggest you read the news about housing affordability.

    Or maybe you may suggest they get a new job that pays more.
    MICK
    26th Apr 2016
    4:02pm
    Another stupid comment Bonny. Investors chase a buck. We all do. Me too. If I get a better return from a property than anything else then that is where my capital goes. No point being in the bank for a lousy 2.5% return...and then pay tax on that. Even you understand that.
    Richied
    26th Apr 2016
    5:02pm
    Bonny: negative gearing and CGT only help the poor when the investment is in affordable housing. There is no government policy that ensures this is the case, and the rich generally do not invest in low-end properties.

    To give you an example, years ago I purchased an ex-housing commission townhouse - this was 'affordable housing'. I didn't use negative gearing, and when I sold it ten years later, there was no CGT because the value had not increased above CPI. Over the ten years it provided me a modest income stream. If I had purchased 5 of these properties, I would have had enough to live on.

    But most wealthy people aren't that interested in the income stream, but in the capital growth as it is a better path to wealth. Rather than buy 5 low-cost properties, purchasing one higher-cost property would most probably give good capital gains but lower yield.

    The current system favours purchasing the high end property rather than the 5 low-end properties, so doesn't help the poor by providing affordable housing.
    LiveItUp
    26th Apr 2016
    6:01pm
    I don't agree Richied as I know what some of these investors invest in. One fellow paid a song for some properties in a small country town and was collecting more a year in rent than he paid for them. Another one picks up old housing commission properties no longer liveable and renovates them and rents them out for a very good return. Another fellow bought some old houses in a suburb no one else would touch. He rents them out without even bonds and tells me they are the best tenants he has ever had. They look at all sorts of properties and if the numbers stack up they buy them.
    Richied
    26th Apr 2016
    6:19pm
    I did say 'most' (not all). I also am one who has invested in lower-end properties (I don't have any low-end ones now).

    I have friends who invest in luxury apartments and high end houses, a couple of friends who could be called slumlords and invest only in low end properties, and others in between.

    But for wealth creation (as opposed to income creation), high end properties are a better bet (generally). Negative gearing and discounts on capital gains taxes favour the wealth investor.
    KSS
    26th Apr 2016
    1:04pm
    "Budget boost for top earners" screams YLC headline in a somewhat successful ploy to virtually guarantee a reaction by the perpetually outraged. There is NO budget boost at all. Things are exactly the same as they were last week.

    Funny how the Grattan Institute is lauded or demonised according to whether contributors on this site agree or disagree with their 'findings'.

    I am really sick of the 'hit the rich' mentality on this site whilst at the same time saying "leave me and mine alone". There is a story in the press today of Leon Kamenev who arrived in Australia as a refugee with nothing in 1990. He spent his days learning English and delivering pizza at night. With two others he set up menulog (takeaway delivery service) in 2006. In 2015 it was sold for $855m. In the last week Mr Kamenev has spent $80m buying up 4 properties in line in one of Sydney's most expensive harbourside suburbs. Seems to me that people on this site would now punish this man for having made a success of his life in Australia with an Australian business employing Australians for nothing more than they did not do the same. The green eyed monster is alive and well!

    NB: In the interests of balance, a year after the sale, in April 2016 ACCC are now investigating the sale of menulog but this does not detract from the fact that Mr Kamenev arrived with nothing, saw an opportunity and built a very successful business - and not for the first time.

    http://www.domain.com.au/news/russian-refugee-leon-kamenev-revealed-as-buyer-of-australias-most-expensive-property-amalgamation-20160425-goe4jw/
    Paulodapotter
    26th Apr 2016
    1:16pm
    The loss of negative gearing will have little to no effect on Leon's bottom line. He was able to buy property because he could, not because of negative gearing. However, he would probably opt to buy new dwellings encouraging the availability of rental properties under the proposed changes by the LP. Property investment was popular before negative gearing and will remain so. It is one way to control your own wealth and will always be attractive to the astute investor.
    I'm no green eyed monster, but I know greed when I see it, KSS
    KSS
    26th Apr 2016
    1:34pm
    I have no idea what Mr Kamenev's investment strategies are Paulodapotter and whether negatively geared property is in the mix or not.

    The point is Mr Kamenev is exactly the 'rich' that people on this site want to punish with fewer options, fewer investments and higher taxes. And all because he has done better than they!
    LiveItUp
    26th Apr 2016
    1:37pm
    Leon will not be renting these properties but use them for his extended family and friends instead.
    MD
    26th Apr 2016
    1:38pm
    Yep, thanks KSS, your story is a good example of what is poss.Whatever we attribute Mr Kamenevs' success to cannot deny the fact that what he has accomplished in his 25 odd years beggars belief.

    I would be interested to know what percentile of 'wealthy retirees' avail emselves of the negative gearing gravy train. An earlier post mentioned the benefit of this form of "investment" (as opposed to super/shares & the like) so I am equally interested to learn how this would affect those same beneficiaries as regards asset value, particularly were they to also be living in a 'flash pile' in say Mosman, Toorak or equivalent burb.
    LiveItUp
    26th Apr 2016
    1:49pm
    It would only benefit retirees with a high taxable income. Remember their money withdrawn from super funds is no longer taxable after age of 60.
    MICK
    26th Apr 2016
    2:29pm
    If you think that YLC is biased KSS then why don't you pi** off. No insult intended but that is what happens when others go to tightly controlled right wing websites. The difference is here both sides get a say, unlike other websites where comments contrary to Liberal Party policy are pulled. Be happy that yours is not.
    Wstaton
    26th Apr 2016
    3:44pm
    What a comment KSS. At $20m per I hardly think they were bought for rental. The only people who would be able to rent them would be the wealth even if they were reduced to us for negative gearing.

    Well done for him and if he wants to thank the country that welcomed him and gave him this opportunity I do hope he isn't going around business trying to screw Australia.
    KSS
    26th Apr 2016
    3:45pm
    MICK: "No insult intended" is exactly the postface for a thoroughly offensive remark. Much like "I'm not racist but...." followed by a clearly racist remark.

    And given I have not come down on either side of the negative gearing debate, I find your language particularly offensive - as I am sure it was in fact intended.
    MICK
    26th Apr 2016
    4:11pm
    KSS: my outrage is that you do not bother to chase the blatant right wing radio shockjocks, the blatant right wing 7 and 9 prime time TV broadcasts...but you come at YLC (and the ABC) because they have a point of view and give readers the opportunity to HAVE A POINT OF VIEW. You won't see that from the above list! Only government focussed propaganda of the worst kind.
    I normally do not behave like a genY yobbo from Auburn. I apologised because I did not feel right about being abusive. Not normally in my nature, but I occasionally get A gutful from this sort of BS.
    BE ACCURATE, BE FAIR, BE HONEST AND AVOID LIES and I'll not come after you.
    Cheers.
    Richied
    26th Apr 2016
    5:07pm
    MD: Negative gearing is only useful if you have other income streams that you would like to offset from a tax purpose.

    Remember that negative gearing means you are spending more on the investment than the income in generates. Unless you are certain the capital gain (less tax) will be greater than the total loss you make while owning the investment, negative gearing is a silly financial planning strategy on its own.
    LiveItUp
    26th Apr 2016
    5:44pm
    Properties can have a positive tax flow but be negatively geared. Depreciation and other non cash allowance make this possible.
    Richied
    26th Apr 2016
    6:03pm
    Yes, it can have positive tax flow, but generally investors expect the gross income generated by the investment, at least in the short term, to be less than the cost of owning and managing the investment. It is only through this financial leveraging (ie. using someone else's money, and being able to offset losses) does negative (as opposed to positive) gearing really benefit.
    KSS
    26th Apr 2016
    8:58pm
    MICK:
    As long as I agree with you, you won't be abusive, is that it?

    And when the " right wing radio shockjocks, the blatant right wing 7 and 9 prime time TV broadcasts" contribute to this forum, I may have a comment to make, just as I do when and if I have something to say when the ABC are quoted by YLC and others.

    The difference between us MICK is that I have NEVER been rude or abusive to anyone and have in fact on many occasions asked that opinions be given and countered with respect by everyone. This it seems, is too much to hope from you MICK.
    MICK
    26th Apr 2016
    9:57pm
    No, but you push the right wing BS, often contrary to both reality or facts.
    If I am rude it is because I occasionally get a gutful of the big end of town and its dishonesty and propaganda.
    I stand on what I said above. I have never heard you object to blatant right wing serving articles.
    By way of example 9 News ran government propaganda 'story' (more like fairytale) less than a week ago. Both Turnbull and Morrison were given oxygen as they attacked Labor for demanding a Royal Commission into the banks. We then had Narev (CBA CEO) and Westacott (Business Council of Australia spokesperson) stating how a Royal Commission into the banks was unnecessary and a waste of money. They would say that...after 2 decades of one scandal after another!
    So where were you on this KSS? Not to be seen. Do you get my point?
    Clare bear
    26th Apr 2016
    1:26pm
    If anyone is interesetd in the issues of income and wealth inequalities, I highly recommend a free four week online course being offered by the Open University UK. It is called Challenging wealth and income inequality. It addresses issues raised by this article and by readers below. To register go to https://www.futurelearn.com/courses/inequalities-in-personal-finance/3/register
    It is open to anyone and brings together in one place a whole lot of interesting information. As a recent female retiree who has gone from being in the middle income percentlile (as a salaried employee) to a low income recipient courtesy of the aged pension and a small annuity, I am finding the course very illuminating.
    LiveItUp
    26th Apr 2016
    1:55pm
    Income and wealth inequities are part of human nature in a capitalist society.
    MICK
    26th Apr 2016
    2:30pm
    You won't find too many of the rusted on Liberals posting on this site who would be interested. These guys just post Liberal Party propaganda where debate is little more than 'left wing comments'.
    Rae
    26th Apr 2016
    2:52pm
    You are so right Bonny. Even in this Capital will still be able to negatively gear into property trusts and corporations but ordinary wage earners ie labour will be told that they can no longer play with the really big rich kids.
    LiveItUp
    26th Apr 2016
    3:29pm
    When are people going to get it. You can't tax the rich without hurting the poor more in some form or another. Higher taxes mean less spending so more people will lose their jobs. Higher property holding costs will flow through into rents.

    Unless our government works out a way to stimulate and grow the economy neither the LNP or Labour government will be popular.
    MICK
    26th Apr 2016
    4:13pm
    And when are the rich going to get it through their heads that THEY ARE NOT EXEMPT FROM THE TAX SYSTEM BECAUSE THEY HAVE WEALTH?
    LiveItUp
    26th Apr 2016
    4:21pm
    No one is exempt from taxes but everyone has the right to minimise their taxes but not to avoid them. I can't see why you have a problem with that Mick.
    Wstaton
    26th Apr 2016
    7:11pm
    Hmm! I think some people really should signup for the open Uni course (free of Course) There are some real eye opening things there. Especially the comparison and consequences between countries where income inequality is less and those where the income inequality is high.
    MICK
    26th Apr 2016
    8:39pm
    And the rich are 'entitled' to employ accountants and lawyers and use offshore tax shelters to AVOID TAX Bonny.
    student
    27th Apr 2016
    12:43pm
    thanks for that info Clare. I'm studying politics and philosophy so will find your site very interesting,
    Again, thank you.
    Clare bear
    26th Apr 2016
    1:26pm
    If anyone is interesetd in the issues of income and wealth inequalities, I highly recommend a free four week online course being offered by the Open University UK. It is called Challenging wealth and income inequality. It addresses issues raised by this article and by readers below. To register go to https://www.futurelearn.com/courses/inequalities-in-personal-finance/3/register
    It is open to anyone and brings together in one place a whole lot of interesting information. As a recent female retiree who has gone from being in the middle income percentlile (as a salaried employee) to a low income recipient courtesy of the aged pension and a small annuity, I am finding the course very illuminating.
    Wstaton
    26th Apr 2016
    3:54pm
    Thanks Clare have signed up.
    ozrog
    26th Apr 2016
    2:25pm
    Other countries don't have negitive gearing and property investment still happens. Properties are left empty to gain maximum consession and tax breaks, how does that help provide affordable housing. It's just a cash grab by the rich.
    MICK
    26th Apr 2016
    2:31pm
    Correct.
    LiveItUp
    26th Apr 2016
    2:40pm
    Properties need to be rented otherwise negative gearing is not allowed.
    Grateful
    26th Apr 2016
    3:06pm
    Investors in real estate would receive a huge investment boom if negative gearing was only applied to newly constructed homes.

    The property market at this time is starting to recede primarily due to the huge prices that have to be paid. Rents can only go so high and is one of the main reasons for the current "plateauing" of house prices with a drop also becoming inevitable due to tighter lending requirements of the banks.
    With negative gearing restricted only to newly constructed houses, investors can actually buy two houses for about the same as they have to now. Just do your own sums there to check.
    That would enable many more new houses to be constructed providing hundreds of new construction jobs and many more from the industries that supply all that is needed for a new home.
    The rental on a much lower cost home would be much cheaper, thus providing more rental housing, apart from providing more reasonably priced homes for first home buyers.
    Investors would in fact become positive gearers and turn what currently is only a tax deduction ON A LOSS (by definition) with little hope now of much, if any capital gain, into a very reasonable income stream and with a much better chance of making a capital gain also coming from a lower price base. Also enabling them to purchase MORE properties from the positive income being generated!!!
    Without removing negative gearing altogether, as some economists are asking, without any policy from the government, the Opposition idea is certainly worth pursing.
    This matter is WAY above the realms of politics, it is economically, and most importantly, sociologically,sound and fair.
    LiveItUp
    26th Apr 2016
    3:22pm
    Investors will want to buy the cheapest houses possible to get the maximum rent possible. This will impact on the quality of homes built which is not a good idea at all.
    MICK
    26th Apr 2016
    4:14pm
    Bonny: people who do not own property HAVE TO RENT. Life will go on if investors left. You included.
    LiveItUp
    26th Apr 2016
    4:25pm
    Agree Mick but what will they pay to rent?
    Richied
    26th Apr 2016
    5:15pm
    'Other countries' is a broad statement. The UK and Netherlands do not allow offsetting investment costs against other income, and Canada doesn't allow offsetting investment costs against wages/salaries. But all OECD countries allow negative gearing in some form.
    Richied
    26th Apr 2016
    5:58pm
    Bonny: Actually, you cam negatively gear without an income from that asset. It's up to the lender to determine whether they will loan the money. So for example if someone invests in a classic car and can get a loan to buy it, they can negative gear the loan against income from other sources.

    That is one problem with the current system - it encourages speculative investment. This was less of a problem before negative gearing as income/losses from property were segregated from income from personal exertion, and property losses were carried to subsequent years and could only be offset against income from the property.
    LiveItUp
    26th Apr 2016
    6:13pm
    There is a requirement regarding the purpose of a loan in that the interest has to be applied against the asset bought with that loan. So your car loan can only be applied against the income of that car or carried forward and added to the asset value of the car in calculating CGT.
    MICK
    26th Apr 2016
    8:41pm
    And the sun has to shine to have a sunny day Bonny......
    And a bird in the hand is worth 2 in the bush......
    LiveItUp
    26th Apr 2016
    3:01pm
    Labor is not doing themselves any favours by their policy as it is the poor renter than is going to lose out the most here. Today's subsidised rents are the true value rents of tomorrow. Not only that we will see a shortage of housing and an even bigger shortage of affordable housing.

    I find this completely unfair that having people who can afford to pay more tax actually causing so much hardship to those who can no longer afford a roof over their heads.
    MICK
    26th Apr 2016
    4:16pm
    A shortage in housing has resulted from a couple of decades of rising property prices and state governments who have not released new land. Of course much of this available land is held by big business interests....which only release small small portions to keep prices high. Get it Bonny!
    Richied
    26th Apr 2016
    5:20pm
    Governments have not forced (or even encouraged) investment in affordable housing (some local councils have policies around affordable housing quotas in new developments, and these policies have been tested at state level - ie. in Land and Environment in NSW). That with the issues raised by Mick do no favours for affordable housing availability.

    I think both parties are missing an opportunity to not only better balance the budget but to provide affordable housing and keep investors relatively happy, by directing/encouraging investment to affordable housing.
    MICK
    26th Apr 2016
    10:01pm
    In the US they have housing which can only be purchased by full time residents. Not allowed to be rented out. I think that it might also have income thresholds.
    This housing is much cheaper than housing without restrictions and if we are looking to house people who do not have high incomes then this may be the way to go. I'd like to see this happen here. The big end of town would prevent it.
    niemakawa
    26th Apr 2016
    3:01pm
    "Cost the Government 11 billion dollars a year". Nonsense. Those who choose this investment tool are actually helping the Governments(s) in providing much needed housing stock, which ALL Governments will not finance. The "tall poppy" syndrome alive and kicking in Australia. Too many in our society today expect to be provided with all their needs, without lifting a finger to make a contribution and are dependent on others to do this, the so-called "wealthy". Governments cutting here, cutting there but where is the money going and how is is being used? Not wisely I should imagine. The Government should leave negative gearing, along with superannuation, well alone.
    LiveItUp
    26th Apr 2016
    3:09pm
    I was recently involved in discussion about changes to rental laws in NSW and I was amazed by the number of people who thought that landlords were just lazy people who sat on their backsides and collected rent for doing nothing. I was left wondering how they thought landlord got these properties in the first place.

    Unless something changes with the welfare mentality of Australia today and people get up and do something rather than whinging then our future is not looking good.
    Rae
    26th Apr 2016
    3:55pm
    I have to agree Bonny. It is amazing the things people do to rental property and very few people realise that the yields are not very much. It always surprises me that renters don't realise how much it costs just to own a property.
    MICK
    26th Apr 2016
    4:22pm
    niemakawa: sounds like you are milking negative gearing too mate.
    Whilst you are on the money about the growing pool of lazy Australians who have the perception that they are entitled to never work your view on negative gearing is not on the money.
    Houses would be built, owned and rented whether we had negative gearing or not. It's all about supply and demand, as are rents.
    Negative gearing is of course NOT constrained to property investment alone. Investors in the share market and any number of other investments use the same policy. Share markets, like property markets, have been bid up by people who are borrowing at historically low interest rates to make a killing on capital gain. Of course they may lose the lot too.
    LiveItUp
    26th Apr 2016
    4:34pm
    Good idea Mick I'm glad I now cashed up and waiting for opportunities. A wrong move by either party could just provide me with a real good ones.
    MICK
    26th Apr 2016
    8:43pm
    Your smile will be on the other side of your face if the world economy implodes under debt which cannot be repaid, along with currency collapse.
    We live in strange times which have the same feel about them as when the sea is sucked out before a tsunami hits.
    Pamiea
    26th Apr 2016
    3:05pm
    Bunch of crooks. Will not vote Liberal to help support their fat cat friends and themselves.
    LiveItUp
    26th Apr 2016
    3:11pm
    If you think Labor is going to do any better think again.
    MICK
    26th Apr 2016
    4:24pm
    AT the very least Bonny Labor is not about taxing working Australians so that it can send truckloads of money to the rich with massive tax cuts. Turnbull and the Business Council of Australia have been trying to engineer this for some time.
    If this government is re-elected it will be a deal done and the rest of the nation will be taxed like never before.
    LiveItUp
    26th Apr 2016
    4:55pm
    I wouldn't hold my breath on that one Mick. Labor will tax working Australians just as much if not more because it is simply the easiest way to get the revenue it needs.

    We live in a world economy now so multinationals have a choice in which country they pay their taxes. Remember all those free trade deals.

    Labor also has their eyes on all those assets of our age pensioners as well including their homes.
    MICK
    26th Apr 2016
    8:44pm
    In your dreams Bonny. Labor may be forced to tax but it will not come after average citizens whilst giving the rich tax breaks. THAT is the difference.
    LiveItUp
    26th Apr 2016
    8:53pm
    Not enough rich people to tax Mick. Lots more average people to tax.
    MICK
    26th Apr 2016
    10:02pm
    So we should let rich folk not pay tax and hit wage earners who earn $60,000 pa hard. Right Bonny?
    Rae
    27th Apr 2016
    7:47am
    And that MICK is the main problem. That $60 000 income that hasn't changed in real terms for about four decades now.If it had risen in line with the productivity growth then by now it would be higher and more tax would be flowing to revenue. Instead we bought the story of the poor old business owner who could not afford to raise labour costs.

    Where has the profits gone? Well Leon has bought $80 million of property to knock down and build a mega mansion.

    Mansions, yachts, fancy cars and toys, high living for a few. That is where the productivity gains have gone.

    If you earn income from being an employee or a small business owner or contractor you have suffered huge loses of income.

    Yet this very real problem is never addressed by the media nor the government. There may not be a solution in a globalised world that is downsizing first world nations middle class to build a middle class in the developing world.

    The real problem is the huge rise in asset prices and fixed costs including such essentials as food,water and shelter. We now have to compete with a rising number of wealthier global consumers.

    Take a look at the meat section of the supermarket in the poorer part of your town or city and see the increase in sausages and ground meats and chicken as prime cuts are priced out of ordinary income earners baskets. That is just one very visible example of the decline in our living standards.
    Adrianus
    27th Apr 2016
    8:03am
    Rae, we bought the story because employers were paying the increases into workers retirement savings.
    Are you saying it was a mistake to force retirement saving onto workers?
    Isnt that just typical? It's just like people to do an Oliver Twist when the pay packets aren't rising.
    Bashing those who have a go is un Australian.
    MICK
    27th Apr 2016
    8:28am
    Actually Frank "bashing" deadbeat Australians who avoid paying a fair share of tax because they believe they are exempt. What part of high income = high taxes do the rich not understand?
    Anonymous
    1st May 2016
    6:46am
    Frank, what's the point of retirement savings when it's all taken away from you on retirement?

    My posts on other pages detail how a homeowner couple with $823,000 will be way better off by spending $450,000 in a big hurry!

    We are being conned by a stinking neoliberal LNP that wants to crush the working and middle class for the sake of lining the coffers of the rich, and the Panama Papers evidence just how obscenely they are lining the rich man's coffers.

    Yes, it WAS a mistake to force retirement savings onto workers, because it was a lie and a con - a cheap, dirty trick to further rip the worker off.
    Adrianus
    1st May 2016
    7:24am
    Rainey, I actually agree that you may have a point. Could it be, when Hawke and Keating thought they were ripping off the employer they were in reality selling a dummy to the worker. There is a big difference in "doing good" and "appearing to do good."
    jamesmn
    26th Apr 2016
    3:31pm
    turnball is a darn liar the same as his predecessor he could not lie straight in bed leaving the negative gearing un touched will affect turnball himself and all of his liberal mates he is 2 faced the same as Barnaby and this idiot treasurer then you have a absolute clown of a health minister with her report yesterday saying that all top end prescription drugs will go onto a data base well for this idiots information oxycontin already is any doctor can only prescribe you 2 weeks supply without getting government approval from Canberra all gp's have to ring up the govt to get the approval over the phone or send in a request by mail if a specialist has not prescribed it you only get 2 weeks supply and they the gp's have to have a authority she is just flapping her gums as usual.
    niemakawa
    26th Apr 2016
    3:48pm
    Negative Gearing is no different from any business that can offset "expenses" against other income. These expenses are used to generate income.So why not disallow all expenses for all businesses and tax them on their GROSS income.??
    MICK
    26th Apr 2016
    4:25pm
    Sounds more like you are trying to justify negative gearing niemakawa. Read my post below.
    Paulodapotter
    26th Apr 2016
    4:31pm
    Correct Mick. You can smell vested interest a mile off.
    LiveItUp
    26th Apr 2016
    4:39pm
    I'm left wondering who would invest in such a business.
    niemakawa
    26th Apr 2016
    4:42pm
    Mick it is justified , it is a legitimate business expense. Try it take some risk, because there are plenty of those too. But those sitting on the fence would have no idea what is involved in a business venture, yet continually criticise the risk takers in our society. Australia is fast becoming a "bludgers" paradise, but once the investors leave, then they may wake up.
    LiveItUp
    26th Apr 2016
    4:47pm
    Agree why work for someone to make a profit when you can work for yourself and keep those profits.
    niemakawa
    26th Apr 2016
    4:49pm
    Bonny, "I'm left wondering....." Very few. I was making an analogy.
    MICK
    26th Apr 2016
    8:48pm
    PLease do not lecture me of all people about "risk" niemakawa. I lost money on the share market years ago and it hurt. One of the best life lessons I ever had though.
    I understand that very few other countries have negative gearing....and their real estate markets and rental markets work fine. Apparently only in Australia would the world end.
    I agree with your comment about bludgers and I understand that around two thirds of all taxes collected go to welfare of all types. That is wrong.
    Adrianus
    27th Apr 2016
    10:39am
    I don't wish to lecture you MICK, so let me just ask this question? How does it work in the USA?
    Adrianus
    28th Apr 2016
    7:03pm
    Bong, times up MICK!
    "A home mortgage interest deduction allows taxpayers who own their homes to reduce their taxable income by the amount of interest paid on the loan which is secured by their principal residence (or, sometimes, a second home). Most developed countries do not allow a deduction for interest on personal loans, so countries that allow a home mortgage interest deduction have created an exception to those rules. The Netherlands, Switzerland, and the United States each allow the deduction. In Belgium, Ireland and Sweden, only a minor part of mortgage interest is deductible."
    We are not alone. In fact there are other countries which are more generous.
    Richied
    26th Apr 2016
    3:54pm
    Negative gearing applies to all investments, not just property. So changes to that would favour other investments, and disadvantage investors in property.

    Discount on capital gains tax is only applied to property investments, and is done to encourage investment in property over other investments, which do not benefit from this discount. It is generally supported by both major parties, given that lost revenue via the discount is seen as cheaper than the cost of governments investing in public housing. Whether it is better for government budgets or not can be debated. However what makes this probably bad government policy is that governments do not restrict the discount to 'affordable housing' properties - the ones that should replace the now-disappearing public housing.

    So keep negative gearing (to maintain a level playing field for all investment types), and look closely at CGT discount - perhaps abolish the discount and increase spending (to a lesser extent) in public housing; or restrict CGT discount only to properties that meet an affordable housing criteria.
    MICK
    26th Apr 2016
    4:26pm
    Not really. If you hold shares for 12 months you also get it on that.
    LiveItUp
    26th Apr 2016
    4:30pm
    It is simply not worth investing in growth assets and paying tax on any gains without some form of inflation adjustment.
    Paulodapotter
    26th Apr 2016
    4:32pm
    Rubbish Richied.
    Paulodapotter
    26th Apr 2016
    4:33pm
    Boy, you can smell the greed all over this blog.
    LiveItUp
    26th Apr 2016
    4:38pm
    It just a matter of knowing the rules and playing the game. No greed in doing just that.
    niemakawa
    26th Apr 2016
    4:44pm
    Bonny, of course it is not greed, but investment by well motivated businesses and individuals.
    Paulodapotter
    26th Apr 2016
    4:46pm
    The smell just got stronger.
    LiveItUp
    26th Apr 2016
    4:48pm
    What smell? The one of envy.
    Paulodapotter
    26th Apr 2016
    4:48pm
    Playing by the rules is fine, but as soon as you start windging about the rules that change benefitting others rather than yourselves, that smell gets pretty rank.
    Paulodapotter
    26th Apr 2016
    4:56pm
    I'm independently wealthy, Bonny. I don't need to screw others to get ahead.
    Richied
    26th Apr 2016
    5:33pm
    Apologies - yes CGT discount is available on all asset classes after 1 year.

    Reading the history of CGT discount, it was applied to encourage investment in appreciating assets. The examples given in the Howard government policy paper included that it would encourage investment in residential property, thus "allowing state governments the flexibility to adjust their public housing policies."

    Bonny: The CGT discount isn't to offset inflation, but to encourage investment. Having a discount favours bigger individual investments and people with bigger incomes. The current rules are not fair.

    Paulodapotter: I hope you haven't read any greediness into my post.
    LiveItUp
    26th Apr 2016
    5:40pm
    Selling big value assets can produce big capital gains. Having to pay tax on these big gains even for a low income earner can be a big tax bill. This is where it is simply not fair.
    Richied
    26th Apr 2016
    6:26pm
    A low income earner probably didn't have the opportunity to buy a big value asset in the first place.

    I'd rather have to pay tax on (say) $500,000 giving me (say) $300,000 profit, than pay tax on $100,000 with a $80,000 profit. The government is offsetting the generation of both those profits through negative gearing - so the person with the opportunity to borrow to buy the bigger investment is getting more benefit from the government.
    LiveItUp
    26th Apr 2016
    7:20pm
    Lots of wealthy people have low incomes.

    Someone with a second house relying on that rental income for example. If they sell that house they could have a big gain of $500,000 or more. That's a big tax bill even at 50% CGT.
    Wstaton
    26th Apr 2016
    7:42pm
    Isn't the top tax rate 49% be cheap to pay it than the 50% cgt
    MICK
    26th Apr 2016
    8:51pm
    Bonny: we do need the introduction of indexation. It is not fair that selling an asset for more than you paid for it should attract tax unless the 'value' of the sale is indexed by the CPI.
    As for "playing by the rules" this is BS put out by vested interests. The big end of town make the rules for themselves.
    Paulodapotter
    26th Apr 2016
    11:21pm
    No Richied, my comments were directed at KSS, Bonny and Niemwaka. They sweat greed.
    MICK
    26th Apr 2016
    4:32pm
    Some information about capital gains tax:
    Australia used to have INDEXATION so that assets (property, shares, art, precious metals, etc.) when sold would be fairly treated. The then government abolished this system and replace it with what we have now...where investors only pay tax on HALF of the capital gain. This was a fiddle at the time as investors who hold an investment over a long period of time are going to be taxed at a much higher rate than if indexation had been left in place.
    Indexation means that you establish a 'today' price for something you bought at a long ago price. Quite fair really!
    In effect the argument we are now having is to really increase tax altogether. SO let's bring back indexation. That was fair. Sadly the extra cash has been built into the government's coffers and is now a done deal. Next one wanted!!!!
    LiveItUp
    26th Apr 2016
    4:37pm
    I still have some investments that come under either system so I might actually benefit by the bringing back of indexation.
    Paulodapotter
    26th Apr 2016
    4:53pm
    Play by the rules and playing the system is very different. I'm happy for the system to change if it means making this country a better place. On this remembrance period, I would hope the sacrifice made by all those who died, results in us not wasting that sacrifice by becoming better people. Blocking ways of making this world a fairer place doesn't seem to gel with that sentiment.
    Paulodapotter
    26th Apr 2016
    4:59pm
    Just in case you missed it Bonny. I'm independently wealthy. I don't need to screw others to get ahead. As a multi property holder, I don't need to negatively gear to secure my future. I don't feel right about those who are not so well off, paying for my tax concessions.
    Paulodapotter
    26th Apr 2016
    5:02pm
    And like MIck. I wouldn't vote for either of the major parties even if you held a gun to my head.
    LiveItUp
    26th Apr 2016
    5:23pm
    Paulodapotter you got that one wrong too. We didn't go to war to make the world a better place etc but because our prosperity at the time relied upon us sending exports to Britain so that had to be protected.
    Richied
    26th Apr 2016
    5:36pm
    Agreed. Indexation is a fairer system. The discount favours larger investments and those with larger incomes.
    Paulodapotter
    26th Apr 2016
    6:31pm
    Bonny, that wasn't what the troops thought. Don't demean them in such a way. No one consciously goes to war to make someone else rich even if we know that's what war is all about. Young people are just fodder for those who would manipulate them.
    Paulodapotter
    26th Apr 2016
    6:35pm
    We should honour their intent, not their gullibility.
    LiveItUp
    26th Apr 2016
    6:41pm
    As a little girl I knew quite a few WWI diggers and they all hoped that the ANZAC march would die out with them. So today I respect their wished and have nothing to do with ANZAC day and just treat it as a normal day.

    Nothing much has changed as the same mistakes are still being made told.
    MICK
    26th Apr 2016
    8:55pm
    And nothing has changed where the strong continue to abuse the weak for their own greed Bonny. You are clearly happy to use that sort of system. I am not...and I am not poor. There are people in the world with morals! You are just not one of them.
    LiveItUp
    26th Apr 2016
    9:21pm
    If having morals means going with the crowd then I have none as I prefer to think for myself and not do things just because I am expected to do them without question.

    As I have said before I am poor if one takes any notice of those income levels required to have a decent level of income.

    I never accept the word "can't" from anyone by reminding them that "won't" is the more correct word to use. I never abuse anyone rich or poor but can be quite assertive for the right reasons.

    I believe everyone has the right to learn the rules and play the game in whatever life throws at them.
    MICK
    26th Apr 2016
    10:09pm
    You flow with the big end of town Bonny. Your comments are testament to that.
    Funny how you always talk about your dividends and share appreciation. And you are poor? Really?
    The rules have been put in place by the rich for the benefit of the rich. I consider rules which are fair should be the in place rather than rules which can only be accessed by the rich. When you talk about "rights" you might like to also talk about manipulation and avoiding paying your fair share.
    LiveItUp
    27th Apr 2016
    7:02pm
    I pay all my taxes required by law so nothing unfair there.

    I have nothing to do with the big end of town but I do know the rules and use them to ply the game. Anyone can do this.

    Next tine you go to Centrelink ask them for the rules before you give them any information. Then learn the rules and give them your information in a way that is within the rules but benefits you. Last thing you should do is give them your information and let them work it all out for you. They have FIS (Financial Information Officers) officers who are more than happy to take you through all the rules. Might take a little bit of time but it may be worth the effort.
    Tarzan
    26th Apr 2016
    5:16pm
    Damned if they do and damned if they don't, and that sums up both sides of politics
    niemakawa
    26th Apr 2016
    5:32pm
    Time to get out of your comfort zone and change tack. Vote ALA , they will get my vote at the GE. They have strong policies and a commitment to AUSTRALIA Better still contact them, I have, and help with their campaign. Lib/Lab/Greens same old, same old. All they are doing is moving around the deck chairs.
    LiveItUp
    26th Apr 2016
    5:35pm
    No thanks.
    Adrianus
    26th Apr 2016
    6:22pm
    I think AMP will drag a lot of votes from the ALP. They hope to gain at least 2 seats in the Senate.
    Paulodapotter
    26th Apr 2016
    6:33pm
    Just remember the Senate is a House of Review, not an extension of the major parties as it is today. Give me microparties and independents anytime.
    MICK
    26th Apr 2016
    8:58pm
    Well that is the game plan Frank: put up a whole pile of apparent 'Independent' parties which are just fronts for the Liberal Party, and whose votes flow directly to....guess who....the Turnbull led government.
    Strategy: ASK BEFORE YOU VOTE. AT the polling booth. If they claim not to know then don't vote for them. If they say LNP don't vote for them. Play the game!
    LiveItUp
    26th Apr 2016
    9:28pm
    It won't make any difference Mick as the LNP will be returned in both houses. Let's face it who would be silly enough the vote a Labor government back in after their last attempt at governing the country?
    MICK
    26th Apr 2016
    10:15pm
    The right wing media is doing its best but many people are tuning out and into the ABC which does not run propaganda.
    You are dreaming Bonny. The government may be directing what you are saying but from what I hear this dirty, lying low life government is finished.
    Voters remember the Paid Parental Scheme lie. They remember having been the target of tax increases whilst the rich are getting tax cuts. They know that attacks on independent senators is about destabilising the senate because the government wants a rubber stamp.
    We'll all soon see Bonny. Voters may be pretty dumb but you can only betray them so many times before the backlash.
    Paulodapotter
    26th Apr 2016
    11:28pm
    I hope you're tright Mick, but the public are swayed pretty easily by who "sounds" plausible rather than who "is" plausible. The public are like fish - no long term memory and very little short term as well.
    MICK
    27th Apr 2016
    9:57am
    I agree with you Paulodapotter. Hopefully there is a bit of memory with being done over at the last election by possibly the worst bunch of liars ever to grace our political system. Nobody should reward this government on that basis alone.
    I recall the Alan Jones "she lied" campaign. Still waiting to see the 'he lied' one though. About most promises, not just one. We'll see in July I guess.
    Happy Jack
    26th Apr 2016
    7:00pm
    Here we go again- Hanky Franky's either into negative gearing or being taken as a poor unfortunate sucker by this LIEberal party Govt and can't see the wood for the trees. The Grattan Institute, the most respected think tank in this country has laid the facts bare for all to see. The top earners are the one's benefiting from negative gearing in addition to the lucrative cut in CGT introduced by, no prizes for guessing, the worlds greatest Treasurer, the one and only Costello. That along with the pork barrelling middle income hand outs during his and little lying Johnn'ys reign sowed the seeds for the dire predicament we find ourselves in today. And what action will Tumbles Turntable take? none whatsoever because he hasn't got the guts to stand up to the extreme right who he is beholden to for installing him in the coup. All we need now is for germsjerk69 to come out in support of this do nothing moribound mob- God help us.
    niemakawa
    26th Apr 2016
    7:04pm
    Your pseudonym does not reflect in your sentiments. Big chip on the shoulders maybe!!
    MICK
    26th Apr 2016
    9:00pm
    You missed what I recall happened Happy Jack. The CGT was cut from 100% to 50% but INDEXATION WAS REMOVED. Am I correct? If so then bear in mind that the casino won that day! Typical LNP sleight of hand!
    Happy Jack
    26th Apr 2016
    7:03pm
    Would Jackie Lambie please move to NSW- she'll get my vote that's for sure.
    LiveItUp
    26th Apr 2016
    7:16pm
    No way leave her in Tassie.
    MICK
    26th Apr 2016
    9:01pm
    I would prefer an honest straight shooter to a lying low life lying snake any day of the week Bonny. Clearly you would not.

    26th Apr 2016
    7:31pm
    If you believe the Grattan Institute then you will believe anything. Grattan Institute was set up by Kevin Rudd with $50 million of tax payers funds and everything that comes out of their mouths supports the Labor spin.
    Paulodapotter
    26th Apr 2016
    9:37pm
    Rubbis! The Grattan Institute is an independent think tank unlike the IPA which is an insidious extension of the LNP.
    Robin7
    26th Apr 2016
    7:32pm
    In my grandparents day they had 3 "have-nots" living under the stairs, if one needed ones bum wiped in the middle of the night one needed to only ring the bell beside the loo and the "have-nots" would wipe, and be glad of the privilege too.
    Today, shamefully, the "have nots" instead have rather too much.
    "the haves" must stand firm, and must not rest until working conditions have been eroded to such a state that we can return to those glory days.
    MICK
    26th Apr 2016
    9:04pm
    More like a bipolar society methinks. Politics on steroids....but the big end ALWAYS gets its cut. That has never changed!
    student
    27th Apr 2016
    8:56am
    yep Robin, it is shamefull that the have-nots dare to want a better way of life. How dare they!! I'll bet they want to eat bread too , well let them eat cake! Off with their heads!! Let them work harder for less reward so the haves can continue to rule. It is the job of the have-nots to form a subclass below the poorest, so the haves have more people to kick. Let the haves make all of the laws to keep people like me in-line. But remember, too much power destroys the powerfull. So who will look after the s***t kickers then?

    The gap is getting larger between the 2% and 'the rest'. I had great expectations when PM Turnbull was elected, how wrong was I!! He appears to be ruled by the wealthy, not his compassion for his fellow man.
    MICK
    27th Apr 2016
    9:58am
    Yeah student. Turnbull often said he was a "team player" but I guess we all thought he would be a good administrator. Sadly Turnbull has become the next mouthpiece and puppet for the rich.
    student
    27th Apr 2016
    12:59pm
    MICK, I can not work out where PM Turnbullstands. He seems to want to be fair but then the Party steps in and he tries to be everything to everyone. I honestly thought he had the good of the nation at heart, but how wrong was I !

    When unemployment rises and wages stagnate (as has been happening for a long time now, wages I mean) then there is no money to buy the goods that are produced or imported. That means less or greatly reduced profits and we hear the cries for tax rebates etc and the 'trickle down effect' (which does not exist except in the minds of a few producers) to help employ people. Sadly I thought PM Turnbull's back ground in merchant banking would lift him above the class of majority of politicians we have, but (and I hate to admit it ) I was wrong.
    MICK
    26th Apr 2016
    8:13pm
    Turnbull was interviewed on 7:30 Report half an hour ago. Leigh Sales asked Turnbull several times about statements he had made where Turnbull had quoted 'research', which when challenged he was unable to respond to. More Liberal Party lies? Sounded like that.
    Sales then put it to Turnbull that three quarters of the negative gearing benefits went to the top 10% of income earners. The response was more BS. The story was starting to look familiar..... Welcome to the defender of the rich at work.
    niemakawa
    26th Apr 2016
    8:20pm
    Long live the so-called rich, without them this Country would be in a far worse state. Be thankful for small mercies.
    MICK
    26th Apr 2016
    9:07pm
    Would it really? I guess the 0.1% of Americans which own 90% of everything think the same way as they prostitute politicians and thieve their way to prosperity.
    We think differently niemakawa...but I do take your point about the scum on the bottom who bleed the nation dry. Nice to agree on some things I guess.
    Paulodapotter
    26th Apr 2016
    9:40pm
    You hit the nail on the head, Mick. Turnbull prides himself on well credentialled argument. He can't sustain that one on negative gearing. His perspectives cannot be justified by evidence and that is going to hurt him big time.
    Paulodapotter
    26th Apr 2016
    9:43pm
    This country is suffering because of the excesses of the rich, Ninny and have been for so long we now have a deficit that will not be reduced by either of the major parties. Our only hope is another fortuitous occurrence like the last mining boom. Maybe the price of baked beans will skyrocket.
    LiveItUp
    26th Apr 2016
    9:46pm
    Disagree as it will hurt the Labor a lot more when people realise the truth of how it will effect them.

    Personally I can't stand Leigh Sales and the way she puts everyone down.
    Paulodapotter
    26th Apr 2016
    10:08pm
    Prove that one, Bonny and yes I agree Leigh can be annoying, but she's getting better at it.
    Paulodapotter
    26th Apr 2016
    10:11pm
    The trickle down effect has been proved to be rediculously ineffective, but there will always the vested interests to keep the myth alive. It's perpetuated by the over privileged and believed by the ignorant and ill informed.
    Paulodapotter
    26th Apr 2016
    10:17pm
    I have been a great supporter of Malcolm Turnbull and had maintained a dialogue with him unitl his Prime Ministership. He does not believe in half of what he supports. He is totally compromised and I know first hand, he is not against modifications to negative gearing. In fact, if Labour had not stolen the march on him, he would have come up with a similar proposition before he got stomped on by his own party much like his other proposals. I actually feel very sorry for him. He's destined for an unhappy political ending.
    MICK
    26th Apr 2016
    10:19pm
    Leigh Sales asks the hard questions which this government refuses to answer. The latest tactic has been to avoid the questions and launch into an attack on Labor irrespective of whether it pertains to the question or not.
    What are you paid for a day trolling the political forums Bonny?
    LiveItUp
    26th Apr 2016
    10:20pm
    I'd like to know where she got the 23 million taxpayers from? ATO statistics only show just over 10 million.

    She needs to get her facts right.
    Paulodapotter
    26th Apr 2016
    10:26pm
    You weeren't listening Bonny. That's what Malcolm said by accident.
    LiveItUp
    26th Apr 2016
    10:36pm
    Why didn't she correct him then?

    I'd avoid her silly questions to.
    MICK
    27th Apr 2016
    8:09am
    Turnbull refused to answer the questions despite them being repeated. The next one in this bunch. All with the same brand.
    Turnbull shot himself in the foot during the interview. He did what he often does and talked about research........which he could not verify when Sales asked him what research he was referring to. Clearly BS and deceit from the leader of the nation. We need an election!
    Happy Jack
    26th Apr 2016
    10:16pm
    Hey, Tactful! can you enlighten me please- is the Lucy Turnbull, listed as a member of the board of Directors of the Grattan Institute in fact the Prime Ministers wife.
    Awaiting your reply with great in trepidation. Happy Jack.
    Paulodapotter
    26th Apr 2016
    10:21pm
    I wouldn't be surprised. I have no doubt there would be some deep discussions between husband and wife over how hubby has been compromised by the ridiculous right in his own party room.
    Paulodapotter
    26th Apr 2016
    10:23pm
    https://grattan.edu.au/news/lucy-turnbull-joins-grattan-institute-board/ Cop that young Harry!
    Paulodapotter
    26th Apr 2016
    10:24pm
    Oh I just love this blog!
    student
    27th Apr 2016
    1:03pm
    you're right Happy. She is also on the board of directors for some Sydney think-tank. He runs the country and she runs Sydney! The Lucky (ooops typo!!) Lucy and Mal show??
    Adrianus
    27th Apr 2016
    1:38pm
    Wasn't Lucy mayor of Sydney at one time? Anyway what has that got to do with the PM's decisions? He obviously disagrees with the Grattan Institute's take on this matter. I will admit it is refreshing to see a highly skilled woman as first lady who isn't waiting for the PM to arrive home to draw the bath and wheel out the slippers and newspaper.
    I will never understand how women lobby hard for female rights and then cut down the women who are successful. Therese was too busy to wait around drawing the bath once that application for the government contract was successful.
    In Outer Orbit
    27th Apr 2016
    12:35am
    Whatever happens folks, remember Australian property is the most over-valued vs national incomes and rental values in the OECD. It is as sure as the grass is green that Australian property values are going to go thro a major downward 'correction' at some stage, with or without political interference. Bubbles never last and this one is no exception. Rental returns become a lot more interesting when there is no incentive to sell (ie no capital gain).
    Paulodapotter
    27th Apr 2016
    7:51am
    Well said.
    Rae
    27th Apr 2016
    8:09am
    Yes I agree. Rental returns are part of a balanced income stream. Admittedly the one that costs a lot and requires a bit of management.

    With the thousands of units being built right now in Sydney, Melbourne, Brisbane and Adelaide I doubt there will be a shortage of rentals or property for young ones to buy anytime after 2017 for a decade or two at least. Depending on immigration numbers of course as if you bring in millions of new population without preparing for them it will always be a catch up situation. Won't it?
    MICK
    27th Apr 2016
    8:11am
    Sound logic Outer Orbit.
    MD
    27th Apr 2016
    8:36am
    Ouch !!! Methinks you may have just hit the wrong nail I.O.O. I'll wager that your prescience will likely effect more than just the typing finger's of quite a few poster's herein.

    But maybe the lyrics of Billy Joels' song are fitting -- "You may be right (but then) I may be crazy.

    I doubt I'm the first person possessed by devils to be asked my name - anything other than the original answer may be blasphemous, thus; "My name is Legion , for we are many ".
    Robin7
    27th Apr 2016
    2:40am
    Before you can start bagging all people trying to find work as “bludgers” you need to end 457 visa’s (some 200,000 of them) and end the scheme where overseas citizens on “holidays” can work to extend their time allowed in country.
    You need to end those awful automatic checkouts – every one of those checkouts adds another person to the unemployment queue, and adds their unemployment benefit to your tax bill!

    You are paying for those checkouts with your taxes!!!
    Paulodapotter
    27th Apr 2016
    7:51am
    Rubbish! You are speaking emotionally with absolutely no evidence to back you up.
    MICK
    27th Apr 2016
    8:14am
    Can't stop progress Robin. Automation is going to reshape society. The real question for politicians is whether the rich and the few with paid jobs are going to be taxed so that people without jobs are able to survive. If that is not forthcoming there will be a revolution in the streets.
    niemakawa
    27th Apr 2016
    5:47am
    Most people have family, so that family has the responsibility to take care of them. I have no interests in problems of anyone else. Those that claim to be "poor" pay very little taxes , so they should be grateful. Yet they demand more. Again I reiterate there are no poor people in Australia , if they do exist the n it is the so-called rich,
    Paulodapotter
    27th Apr 2016
    7:52am
    Balderdash as usual. Spoken by a greed merchant.
    Anonymous
    29th Apr 2016
    2:06pm
    What disgracefully self-indulgent nonsense, niemakawa!

    Yes, people have family. In one case I know of, where a child grew up institutionalized, abused and deprived, that family was crippled by war injury, then denied a pension on the basis of a third-party assessment of ''disability'' performed by an unqualified person (''social worker'' with no medical training) whose assessment contradicted that of 4 highly qualified medical specialists and a GP. The family was left to wallow in abject poverty, resulting in the child being taken away to suffer hideous deprivation and abuse in ''care''.

    There are a great many examples of children growing up in poor families because their fathers gave their lives in war - defending the freedom and lifestyle of selfish, unappreciative people like you!

    I know of a qualified teacher gave birth to a seriously disabled child who needs special care 24/7. She is unable to work more than 1 day a week now. That one day pays barely enough to cover the cost of a trained carer for that day. The family is now living in poverty, meeting high costs for special care and education for their child and with their income more than halved. I suppose her aged-pensioner parents, who struggled to survive the psychological impact of imprisonment during the war and war injuries, and who had no education of job training, should be able to support her and her child?

    I also know of a father of 4 young children whose wife died of cancer leaving him a mortgage, debt on two cars, a pile of medical bills, and funeral expenses. Fortunately, he can claim a supporting parent benefit. Unfortunately, it doesn't go anywhere remotely close to enabling him to service debts that were incurred when both partners were enjoying good incomes. As the son of a poor widowed pensioner, he can hardly ask family for financial help.

    These are just a few of the instances I know of personally. There are hundreds of thousands more.

    Perhaps you - being so self-serving and selfish - would declare that somehow this kind of misfortune is the FAULT of the unfortunate. I wish fate would deal people like you some of the savage blows it deals those you condemn. It's sickening that there are people in the world who think as you do.
    niemakawa
    27th Apr 2016
    5:47am
    Most people have family, so that family has the responsibility to take care of them. I have no interests in problems of anyone else. Those that claim to be "poor" pay very little taxes , so they should be grateful. Yet they demand more. Again I reiterate there are no poor people in Australia , if they do exist the n it is the so-called rich,
    Paulodapotter
    27th Apr 2016
    7:56am
    To write it again speaks volumes. The minimum of investigation shows how little you understand about the gap between the haves and the have nots. Your persistance in this logic is illogical.
    Paulodapotter
    27th Apr 2016
    8:16am
    Don't let me keep you from your charitable work among the homeless.
    MICK
    27th Apr 2016
    8:21am
    You are correct Pauladopper. The divide is humongous and growing.

    I do have some sympathy with niemakawa's view given that the bottom end has the belief that it is justified in demanding ever more whilst contributing nothing to society other than pain....and demanding social security as a lifestyle. It is the opposite end of the scale to the obscene rich with both ends having beliefs which defying reality, human decency and fairness.
    Adrianus
    27th Apr 2016
    12:58pm
    The ABC 7:30 Report stated that a plumber on $100k pa is wealthy. Of course their target audience is not a true representation of the population. How many plumbers earning $100k would have the time to watch that political nonsense?
    Anonymous
    29th Apr 2016
    2:10pm
    I hope I'm mistaken, but I seem to recall niemakawa screaming ''hands off my home - it's for me to pass down to my children'', which implies that he/she is a pensioner? Otherwise why worry about the government including the family home in the pension means test.

    Now if this is a pensioner protesting that people should rely on their family, no matter how challenged that family may be, then he/she is about the worst kind of hypocrite in existence. Not just a hypocrite, but a selfish, greedy, self-serving narcissistic hypocrite completely lacking in empathy at any level. Disgusting!
    Happy Jack
    27th Apr 2016
    9:16am
    ARE YOU THERE? 'TACKY TACTFUL', ARE YOU THERE? I am waiting intrepidly for you reply-: is the Lucy Turnbull on the board as a director of the Grattan Institute the wife of our Lieberal party Prime Minister, Tumbles Turntable? If you are in difficulty here, perhaps your offsiders, Hanky Franky and germsjerk69 can assist in your research! I do need an answer though- I'd hate to think there was a divide in the big house.
    Paulodapotter
    27th Apr 2016
    3:52pm
    Oops, I think they are looking the other way, Happy. Funny how sight difficulties and deafness increases when things get a little too difficult.
    MD
    27th Apr 2016
    10:54am
    I'm also interested to learn if the Leon Kamenev (see KSS post) is in any way directly/indirectly related to the the eponymous triumvirate member (with Comrade Stalin) of former USSR leadership. Could be the makings for a very interesting conspiracy.

    On another matter, with due apologies for being off topic, it also occurred to me that; although generationally seperated, we have had something akin to our own holy trinity in our three MALs - Mal Fraser, Mal Brough and Mal Turnbull.
    For future reference perhaps we could moniker them respectively:
    Malfeasance, Maladroit and Malcontent. Who knows, who cares ? I'm just a voice in the wilderness.
    Paulodapotter
    27th Apr 2016
    5:49pm
    Like most course actors, you have the right words, but in the wrong order.
    Paulodapotter
    27th Apr 2016
    5:50pm
    Try Malcontent, Malfeasance & Maladroit in that order.
    Happy Jack
    27th Apr 2016
    11:10am
    Just watched a re-run of last nights 7:30 interview with Tumbles Turntable.
    You know- he's big problem is simply that his hearts not in it. He's knows that he is trying to defend the indefensible on negative gearing and the effects it is having on the Australian housing market and the ability of younger Australians to purchase their own home. Bob Menzies would turn in his grave. Just let me say, in closing-
    I really feel for the fella. His out of his depth and in the wrong party, to boot.
    Paulodapotter
    27th Apr 2016
    3:55pm
    Agreed, I have been a great supporter of Malcolm Turnbull and had maintained a dialogue with him unitl his Prime Ministership. He does not believe in half of what he supports. He is totally compromised and I know first hand, he is not against modifications to negative gearing. In fact, if Labour had not stolen the march on him, he would have come up with a similar proposition before he got stomped on by his own party much like his other proposals. I actually feel very sorry for him. He's destined for an unhappy political ending.
    Happy Jack
    27th Apr 2016
    7:07pm
    TOO TRUE, TOO TRUE, PAULODAPOTTER. IT'S ALL RATHER VERY SAD.
    Anonymous
    1st May 2016
    6:54am
    If he's too gutless to come out publicly and declare his position, he deserves an unhappy political ending, and nobody should offer sympathy. It can't come soon enough. There is nothing more contemptible in this world than a gutless wimp who won't stand up for what he believes in.
    MmtuMoja
    28th Apr 2016
    4:20pm
    Everyone should be able to negatively gear up to two properties against their wage. Two only either residential or commercial capital gains tax concession should apply. If they choose to buy one or two investment properties and choose not to negatively gear then they should be permitted a 25% capital gains tax discount when they sell. Similar rules should apply to shares / ETFS and so forth purchased with margin loans.
    Happy Jack
    28th Apr 2016
    6:40pm
    Great MmtuMoja, if in fact as you say "'everybody should be able to negative gear two properties" all Australians would be living the dream, my friend. But sadly that is not the case. Thousands upon tens of thousands of young Australians are battling to a rack up a deposit for one home, let alone two. And the reason for this- Housing, which should be affordable for all Australians who are prepared to save has become unaffordable because house purchasing has become a means of creating wealth, not for the basic sheltering of family's. To back this point, look at our housing prices compared to overseas. Much more expensive. The pity of it all is the politicians know this but for their own political expediencies choose to prop up the top end of town. Just look at Joe Hockey's final parliamentary speech, on his departure, where he said " negative gearing should be abolished. That just about sums up what a big pretence the argument for maintaining it is. Really it is just a farce.
    Happy Jack
    29th Apr 2016
    9:06am
    Hey, hanky waving franky, germsjerk69 and tacky tactful!!! I'm waiting intrepidly for your reply!! Is the Lucy Turnbull, who is a director on the board of the Grattan Institute, Tumbles Turntable's our fearless PM's wife? three long days now and no response. Not really good enough, chaps.
    Not Senile Yet!
    30th Apr 2016
    1:01pm
    Most of you have missed the point on negative gearing!!!
    It was used to save the Government from Investing any money into New Government Housing for over 30 years! Neither Government has or will build affordable Government Housing for the Low Income Earners or previously titled "Battlers"!
    Housing Commission Estates were only a failure because they Rented some.....but those that were sold were well looked after!!!
    Removal of Tax Subsidies for investors is NOT necessary......it only needs to have a ceiling placed on the Amount and Quantity of houses to which it applies!!!
    2 to 3 Houses is reasonable to encourage investors......however any more than that creates RORTING and does nothing but cost the Tax Payer at the expense of Investment of the Tax Dollar into Health & Education....where it is now needed More than ever!!!
    Proof is in the Statistics.....top 10% Income Earners......are the ones getting wealthier at the expense or from subsidised Tax Reduction!
    Time to Curb it! But to simply remove it altogether would be a disaster!
    Rational thinking suggests a gradual reduction over 10 years with a Cap on the amount of properties that it applies to....would be a better compromise!
    Remember....even if they only half it.....it would be a better way to save on expenditure of tax than continual Cutting of Welfare......and the savings are greater!
    Happy Jack
    30th Apr 2016
    1:31pm
    Hey, Not Senile Yet! you've hit the jackpot, mate. Talk about being on the money- just vote Labor and your wish will come true because they are not proposing abolishing across the board , only on future purchases of existing dwellings. New constructions and existing negative gearing properties will still be negative geared. If anything, I'd say it will lead to an increase in new housing stock.

    1st May 2016
    6:51am
    So now we have no ''budget emergency'', because the working class and lower middle class have been ripped off to the greatest extent the government believes tolerable without massive revolt, so now the government is engaging in a vote buying exercise, giving handouts to the better off for ''bracket creep'' that we all know isn't happening, because wages aren't rising.

    What a filthy lot of lying, cheating, neoliberal scumbags we have running the show!

    Sadly, greed will likely prevail and people who gain from this vote buying exercise will vote this mob of corrupt incompetents back in, and then watch them strip retirees of all they have worked for decades to accomplish, and wipe out the social structure that made Australia great.
    Adrianus
    1st May 2016
    7:28am
    Talking about greed.....I think Sean Costello needs to explain where he got all that money?
    Janran
    3rd May 2016
    1:30pm
    What the Libs don't spell out when they talk of the MAJOR EVIL of "bracket creep", is that those earning over $80,000 aren't so worried their salary will be taxed more (only the bit over $80,000), BUT THEIR INVESTMENTS and CGT payments will be taxed at the higher rate.

    Now there's a crisis!!!
    Adrianus
    3rd May 2016
    2:39pm
    That's another reason why dropping tax for small and medium sized companies is a good idea because it reduces the tax advantage of Superannuation salary sacrifice arrangements. Let's face it when company tax is reduced 60% of the money flows to households.
    Happy Jack
    3rd May 2016
    6:32pm
    Frank1 Your saying that 80% of cuts in tax to business flows through to households!!??
    Well, let's cut out the red tape and give it straight to the households.
    HA, HA, see how stupid your argument is. It really ranks with the stupid utterings of our LIEberal party Prime Minister, Tumbles Turntable and our simply amazing Lieberal party treasurer, Moaning Morrie, who if you watch him carefully, moves his lips faster than a fly buzzing around a horses arse.
    Happy Jack
    3rd May 2016
    6:32pm
    Frank1 Your saying that 80% of cuts in tax to business flows through to households!!??
    Well, let's cut out the red tape and give it straight to the households.
    HA, HA, see how stupid your argument is. It really ranks with the stupid utterings of our LIEberal party Prime Minister, Tumbles Turntable and our simply amazing Lieberal party treasurer, Moaning Morrie, who if you watch him carefully, moves his lips faster than a fly buzzing around a horses arse.


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