Turnbull’s huge negative gearing blunder

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By Leith van Onselen

If only Malcolm Turnbull had stared down the property lobby and held firm to his long held opinion that negative gearing and its partner-in-crime – the capital gains tax discount – were a “sheltering tax haven” that is “skewing national investment away from wealth-creating pursuits, towards housing”, and have caused a “property bubble”.

Then Turnbull would have opted for reform of these tax lurks, without jeopardising his electoral standing.

You see, ABC’s Vote Compass has revealed that more Australians (47%) are in favour of reforming negative gearing than maintaining the status quo (41%):

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Surprisingly, however, it is the oldest members of society that want negative gearing to be reformed (59%):

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But unsurprisingly, it is the wealthiest members of society that want to keep negative gearing to line their own pockets (51%):

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Whereas Labor voters are more in favour of change (63%) than Coalition voters (31%) – no surprise there:

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While the data is no slam dunk either way, it does highlight why Malcolm Turnbull should not have ‘sold his soul’ to the property lobby. He could have pursued reform – as he previously advocated – without risking the election. In fact, judging by the above polling, he might even have gained a few votes.

Instead, Australia has itself a limp-wristed Prime Minister that is too afraid to stare down the rent-seekers and pursue reform in the national interest – precisely the type of leader Australia does not need in the challenging years ahead – and Turnbull’s own standing has collapsed.

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About the author
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.