What politicians need to know about negative gearing
Low and middle income earners benefit most from negative gearing. To abolish negative gearing would make investment more difficult for low and middle income earners.
80 per cent of Australians who utilise negative gearing have an income of under $150,000, and the median income of Australians negatively geared is $88,751.
Changing negative gearing will make it more difficult for these Australians to provide for themselves in retirement.
Negative gearing is not distorting the Australian taxation system - it reflects efforts to make the tax system neutral across asset classes.
The Labor Party's proposal would result in barriers to entry for those who would be forced to buy new expensive housing stock instead of potentially cheaper existing housing stock.
The Coalition's policy to reduce "excessive" negative gearing is contrary to their philosophy of encouraging investment and entrepreneurial growth.