The negative gearing argument rages on – currently various parties are making submissions to the Parliamentary Inquiry into home ownership.
Property Council chief Ken Morrison told the Parliamentary Inquiry into home ownership last week: Negative gearing is not a tax lurk for the wealthy, negative gearing helps everyday Australians save for retirement.
Speaking to the House of Representatives’ Standing Committee on Economics, Morrison said:
“we’re not talking about sheep stations. The idea that in fact negative gearing is something that’s dominated by rich property barons who are masquerading as cleaners in their day jobs to dupe the tax office, I don’t think that stacks up.”
Morrison told the Inquiry that negative gearing was used by Australians on modest incomes to invest in one or two properties, with net rental loss deductions averaging $8000 a year.
“These are not people who reside in a particular postcode. They’re not just the Tooraks and Mosmans of the world. These are people that are spread throughout the community, quite often people who don’t see the share market as a natural place for them to invest but have a greater affinity with bricks and mortar.”
Instead of demonising negative gearing, the Abbott Government must set its sights on planning reform, the Property Council says.
According to the Property Council’s submission to the Inquiry, Policy solutions to improve housing affordability, the greatest barrier to housing affordability is a lack of supply for a growing population and outdated planning and taxation systems.
Household formation figures from the Australian Bureau of Statistics confirm that 164,000 households are being formed each year, with the number expected to climb to 172,000 from 2016.
However, the 153,000 homes completed per year for the past decade has resulted in a significant deficit of housing in Australia.
The ability of supply to keep pace with demand, and keep downward pressure on prices, depends on streamlined and efficient planning systems.
To improve planning, the Property Council recommends: more land for housing; simpler planning and faster processes; fewer taxes on new housing; better links between housing and jobs; and incentives for reform.
For more read:
- The Property Council’s submission to the Inquiry, Policy solutions to improve housing affordability.
- Who really uses negative gearing?
- Why be so negative on negative gearing?