While Prime Minister Malcolm Turnbull continues to drown in negative gearing lies, Liberal MP John Alexander has broken rank and admitted that negative gearing has driven a boom in “speculative investors” and helped to make housing unaffordable. From ABC News:
Liberal MP John Alexander led an inquiry into affordability, and told Four Corners negative gearing has led to a housing market “dominated by speculative investors”.
“Too often we see the young couple getting beaten out at the auction, and then renting out the very place that they were trying to buy,” he said.
First home buyers are competing with experienced investors equipped with tax breaks and negative gearing.
Last year, more than half of new home loans went to investors, rather than to people wanting to buy a place to actually live in.
“We’re travelling towards a market that is dominated by speculative investors. First homebuyers have really been unable to compete,” Mr Alexander said..
While his Liberal colleagues are singing the praises of negative gearing, Mr Alexander said it had helped to create the current price boom…
“The moment that it intrudes on the marketplace and stops young families from buying the house, that’s not ideal. And that’s what’s happened in this moment when interest rates have gotten so low.”
Prime Minister Malcolm Turnbull used to think like you JA. In his 2005 Tax Policy Paper, Turnbull described negative gearing and the CGT discount as a “sheltering tax haven” that is “skewing national investment away from wealth-creating pursuits, towards housing”, and has caused a “property bubble”. He also admitted that “Australia’s rules on negative gearing are very generous compared to many other countries” and that “the normal deductibility principles do not apply to negatively geared real estate such that the taxpayer is not obliged to demonstrate that the negatively geared property will generate positive cash flow at some point in the distant future”.
Shame Turnbull has chosen lying over sound policy.
