Don't play with negative gearing
Don't play with negative gearing
Don't play with negative gearing

Five Reasons Not to Play with Negative Gearing

1. Over two million renters don’t know what will happen

Australia has 2.3 million renters. Take away negative gearing and landlords will need to make up their losses through higher rents.

Not only that, if you take away negative gearing, the impact on the rental property market will be high. Supply might be hit in different ways from city to city, but overall, rents will lift.

The fact is those people tinkering with it simply don’t know what will happen to them.

2. We need more people funding their own retirement, not less

Consider this : Over 770,000 Australians on taxable incomes less than $80 000 are planning their future using negative gearing. That includes 89,800 clerical workers, 48,900 teachers, 33,700 nurses, and 9,100 emergency services workers. That’s an awful lot of mums and dads. Knocking over the plans of these people is no small thing.

These folk are just like you – not rich, but trying to do the right thing and build an investment for a rainy day.

3. Property is vital to jobs

Not only is property Australia’s biggest industry, it’s one of the few sectors of the economy in a growth phase. It makes up one ninth of Australia’s GDP and employs 1.1 million workers.

Putting a brake on the property industry right now is slightly south of crazy. The construction of a typical house uses up to 40 tradies and subbies. That’s a lot of jobs that depend on investment in housing.

4. Our population just hit 24 million

Australia is growing – and faster than we thought. We’ve already got a housing supply crisis. Do we really want to make it worse by taking away the incentives to invest in housing? Around one-third of new dwelling construction is financed by investors each year. Fooling around with negative gearing could see investment grind to a halt.

5. It’s been around 100 years

That’s right – 100 years we’ve had negative gearing. So why would someone want to play with it. They can’t resist the temptation to tinker with something that is working well.

Playing with negative gearing means changing how, why, where and when people invest. When our politicians make these sorts of changes, things invariably get more complex and more expensive.