ABC Fact Check has demolished the Turnbull Government’s claim that the majority of people using negative gearing are “average” income earners:
The claim
Assistant Treasurer Kelly O’Dwyer says that Labor’s policy on negative gearing disadvantages average earners who rely on salaries or wages.
Ms O’Dwyer said on the ABC’s Q&A on May 9 that Labor wanted to allow “people who are very, very wealthy” to use negative gearing by deducting property rental income against other investment income.
“The average income earner who relies on a salary or a wage won’t be able to do that,” she said.
“And two-thirds of people who negatively gear, two-thirds of people, have an income of around about $80,000 or less and that is more than 47,000 teachers who negatively gear, more than 40,000 nurses and midwives negatively gear.”
Fellow panellist Cassandra Goldie, chief executive of the Australian Council of Social Service, tried to interrupt Ms O’Dwyer, saying: “That is the taxable income.”
After Ms O’Dwyer finished speaking, another panellist, Shadow Assistant Treasurer Andrew Leigh said: “The $80,000 figure is taxable income, in other words that’s the income after we’ve taken account of negative gearing.”
Ms O’Dwyer said “yeah”, but did not amend her claim, responding to Mr Leigh: “But your policy favours the wealthy.”
Are two-thirds of negative gearers average salary or wage earners on incomes of $80,000 or less? ABC Fact Check investigates.
The data shows 56 per cent of people who use negative gearing have an income of $80,000 or less…
82 per cent of all taxpayers have taxable incomes below $80,000.
But that this large category represents only 67 per cent of negative gearers, indicates that negative gearing is disproportionately used by taxpayers with higher incomes…
ABS data shows that the median annual cash earnings for all earners, male and female, full-time and part-time, was $52,052.
The ATO statistics show that those with a total income of $52,000 a year or less represent 59 per cent of all taxpayers.
Only 4 per cent of these people use negative gearing.
Before negative gearing reduces their income, around 33 per cent of people who use negative gearing have a total income less than $52,000.
Yet more lies from this government who does not seem to understand that the $80,000 taxable income threshold represents the top 12% of income earners, not “average” earners.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
