Negative gearing reform is dead, buried, cremated

After unsuccessfully taking its negative gearing and capital gains tax (CGT) reforms to the past two elections, Labor is set to officially dump the policy from its platform. From The Australian:

Anthony Albanese has given his biggest signal yet that he will dump Bill Shorten’s negative gearing and franking credits reforms, responding “No” when asked if they were still party policy…

When The Australian approached Mr Albanese’s office, a spokeswoman said: “All of our policies are under review. Franking and negative are not our policies any more.”

Mr Albanese’s office later clarified the policies were under ­review, and had not been dumped.

The two policies and Labor’s costing plans have been wiped from the ALP website…

After writing literally hundreds of articles advocating negative gearing and CGT reform over nine years, I am relieved that I can now put the issue to bed and focus on other things.

I remain of the view that Labor’s negative gearing and CGT reforms did not harm Labor’s election fortunes. Rather, it was Labor’s franking credits policy and open borders extremism that poisoned the well, alongside Labor’s kowtowing to the inner-city progressive elite, rather than its traditional working class base.

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Comments

  1. Haha!

    /NelsonMuntz

    Labor truly munted.

    We can all go back to speculating on property now.

    • And how good izzat? The Labor show makes Engadine Maccas look like a variety spectacular fit for the royals!
      .
      .
      .
      What a pack of muntz!

      • WTAF are the ALP doing? look at the dopey try hards running scared from this massively popular govt. a govt possessing a gargantuan 1 seat majority. a govt that is 1 by election from a hung parliament…the alp are craven idiots possessing a heart of gold…small and yellow

    • DominicMEMBER

      That’s it. I’m falling in and buying my very own fire-prone dog-box this coming weekend.

      To be rich is glorious!

  2. 2 elections? They are in opposition. All policies are dumped until the next election which is totally sensible.

    • GunnamattaMEMBER

      They take nothing to the next election they wont be elected, and there will be people in their midst that know that.

      But a lot of the hereditary whig wing of the ALP are quite comfortable with that, and it frees them from needing to implement progressive economic reform

      • They could have just gone with the NG and CGT (which were carry overs from 2016) but they massively overplayed their hand with franking credits etc.

      • Torchwood1979

        No, they promised to deliver a surplus and provide tax cuts that got rid of something called “bracket creep”, which is apparently killing Australians on low and middle incomes.

        Now that bracket creep is a thing of the past in five years time (delivered with no cuts to services, whee!!!) and the Coalition has already delivered a surplus next year all their election promises (including being Not Labor) are fulfilled.

  3. JosephSMEMBER

    Thank goodness. MB went out if it’s way to avoid any constructive criticism of Labor’s negative gearing policy, despite it’s flaws. I hope if Labor reconsiders a change to negative gearing in the future it’s not the half-baked policy approach they’ve just abandoned which would have allowed wealthy investors to continue the status quo (negatively gearing established homes against investment and other non-salary income).

    • I have a simple rule Joe: don’t let the perfect be the enemy of the good.

      Expecting all policy to be perfectly crafted without flaws is deluded. Labor’s policy wasn’t perfect, but was an improvement on the status quo. So I supported it.

      Pedantry will ensure no policy at all, given none is perfect.

      • JosephSMEMBER

        You can support something, while pointing out the flaws. It shows that you prioritise the politics over truth / reality, which is a shame because in the last few years as a subscriber it has meant I need to view all posts on this site through the same lens.. i.e. what political agenda is being pushed, how has this data or chart been changed to support a narrative, etc, rather than taking the posts as objective analysis.

      • To be fair Joseph, they consistent that nothing is perfect but it was the right change for now.

      • JosephSMEMBER

        Andrew, I think I recall seeing a mention of the policy being ‘not perfect’ in a few articles of probably 1000 written here on negative gearing over the last several years, but don’t recall any of them exploring what those flaws were. I don’t think it’s unreasonable when making a case for a particular policy to explore in detail the pros and cons, then explain why the pros outweigh the cons (in the writers opinion). At least do that in some articles or one of them. If not, then the posts come across as propaganda, not analysis.

      • Jeezus guys…I am thankful that MB exists. I think this handful of smart people work really hard to produce relevant content each day for almost free. It’s not perfect. Big deal, think of the alternatives. Please think about where your dissatisfaction might be more appropriately be directed (eg almost anywhere like MSM, politicians, lobbyists etc)

      • Yep. And that’s why they are completely irrelevant at the moment and likely to remain so until they cease to exist as a force in Australian politics. Normal people hate globalism and open borders, and don’t give a fat rat’s ar$e about the majority of SJW issues. For the ALP to believe that the solution to their problems is to double down on more of what actually caused them to lose is deranged.

        The ALP is no longer a party that represents Labourers, it is largely a bunch of self-righteous and pompous but delusional Fake Left inner city chardonnay sipping lawyer nutters like Penny Wong. They’ve all got soft hands and soft minds, and have never built anything in their lives, or worked in a shop or done anything useful at all really, and they’re now all standing around gazing at each other’s navels and wondering WTF just happened to them. I could tell them, as could anybody really, but they wouldn’t listen.

        The people who do care about Social Justice and all that other nonsense are a noisy minority. They enthusiastically vote Labor or Greens, but nobody else wants a bar of it. And it doesn’t matter how enthusiastically the minority vote for you, they’re still a minority and you lose.

        The collective psychological disturbance that prevents the ALP apparatchiks from understanding these very obvious facts that are perfectly clear to almost everybody in Australia would make a good PhD dissertation.

    • How good is Australia? But also how good is Labor now? They basically are the Liberals, but the red version.

      • I would much rather Red Pill thanks.
        Insofar as, in the 1999 film The Matrix, the protagonist (Neo) is offered the choice between taking a blue pill that will restore his ordinary experience of reality and a red pill that will reveal its true nature.

        So, Red Pill has since been used to refer to a process by which a person’s perspective is dramatically transformed, introducing them to a new and typically disturbing understanding of the true nature of a particular situation.

        https://en.wikipedia.org/wiki/Red_pill_and_blue_pill

        I’d rather know and understand the ugly truth and deal with it than believe in pretty lies.

      • I agree. I’d also take the red pill. But when it comes to the Libs vs Labor, I’ll take a xanax.

  4. yeah dump two most sensible things and continue helping the rich while spruiking identity policies

    real “fake left”

  5. Hanno Son of Bomilcar

    isn’t it remarkable that you had a labor party leader from the *right* faction of the labor party who lost labor the election bc the entire platform he was selling was a bunch of confusing crap or stuff no one cared about (like franking credits and climate change zzzzzzzzzz) and labor’s response to that inevitably losing is “let’s go further to the right on everything except immigration” ???? labor didn’t lose bc of negative gearing or franking credits, it was bc their entire platform was BORING, no one cared, there was nothing exciting or interesting or sweeping there, so in the face of that you might as well just go with the incumbent. imagine if they had ran on big ticket stuff like substantial immigration cuts or bringing back the CES/a working unemployment services network in this country, they would have killed it.

    • Once the link with the working class was lost, so was everything else. Setka is an exemplar.
      There’s not enough votes in the neurotic upper middle classes to win an election, as the Australian Democrats…UK Lib/Dems…and probably the US Dems…like to demonstrate to us.

    • You deluded if you think it was anything other than Libs telling everyone they’re a winner, and here’s some ‘free’ money.

  6. SoMPLSBoyMEMBER

    Ha!
    Labor wises up to understanding the country is run from Pitt St (Sydney) and Collins St ( Mel) and those ‘servants’ in Canberra know their place.Any policy to crimp the ‘style’ of the lenders will always fail.

    • C.M.BurnsMEMBER

      who is on Pitt Street ? Westpac are on Kent and CBA are on Harbour; and Macquarie are on Martin Place.

      Are you referring to the RBA ?

  7. labor has been a champion of neoliberalism since early 80s
    Hawke should be celebrated by neolibs more than Reagan or Thatcher

    • Haha!

      What would anyone expect to happen, when there is a massive housing shortage due to the constant inflow of people and lack of land that can be built on. Farkenell!

    • Prices will fall enabling more renters to buy as debt-laden investors who can’t do maths exit the market before they lose their homes and lease cars.

    • Rents are rising in NZ because despite all Jacindas waffle, migrants are still pilling into the country. If investors are pulling out of the market then house prices should decline as they sell the properties and previous renters can become owners.

      Unless investors are not selling and not renting the property out then rents should not go up. If they are doing that they are not good investors as they are unlikely to be making much in speculative gains.

      You might as well come out with the classic quote that investors will put up rents if negative gearing is ended. That assumes the parasites were not charging as much as they could already which is incredibly unlikely.

    • DominicMEMBER

      You’re not suggesting the average Joe may like to keep more (rather than less) of what he/she is earning are you?

      Pretty controversial. What about the ‘common good’?

  8. JunkyardMEMBER

    I’ll keep saying it, Labors only chance of ever getting elected again is to wait for the Lib’s to completely destroy the joint to the point the population is basically begging for a change. In this context policy is largely irrelevant.

    In the meantime Lobor can spend their time looking for a leader with an actual personality.

    • DominicMEMBER

      Labor still won’t have worked out by then that dialling back immigration aggressively is the route back into power.

      Change will come when this whole obsession with social justice, virtue-signalling, hipster beards and ethically sourced avocado toast is tossed in the bonfire where it belongs and the focus returns to real-life issues.

      • ++(think of the biggest number, then add one to it).

        I think I said much the same in a more long winded rant above, if it makes it through moderation.

  9. How good is Deutsche Bank?

    https://www.news.com.au/finance/business/banking/deutsche-bank-axes-18000-staff-around-the-world-including-sydney-new-york-and-london-offices/news-story/52e1fcd6057de7eb8c771bb789c7c3ef

    The German bank plans to close all of its equity trading business and cut some parts of its fixed income operations in an overhaul expected to lead to 18,000 job cuts. The bank’s Australian equities division, which has offices in Sydney, Melbourne and Perth, will be impacted in the global axing.

    • reusachtigeMEMBER

      Very good. The surplus human capital needed to be eradicated so as to work on profit maximization. Well done.

    • DominicMEMBER

      The legends who are the architects of DB’s balance sheet debacle have long since left, multi-million $ bonuses safely banked.

  10. Karl FitzgeraldMEMBER

    Thanks for all your hard work on the issue LVO. One day sanity will prevail. Good luck to ours in the meantime.

  11. Ronin8317MEMBER

    Negative gearing is the scapegoat, ‘Big Australia’ is the dead horse that ALP refuse to get off, because the echo chamber of internal polling tells them it’ll be a winner. Until the sampling bias issue is resolved, the ALP will not change policy.

    • Strange Economics

      Polling was conducted in the front bar of a Brunswick pub, where the average house price is $1million. No polling in west melbourne, or west sydney. No funds left to to get the train for a day….

    • DominicMEMBER

      No sane person wants Big Australia outside of the FIRE industry and gubbermint.

      Instead of laying the foundations for productive economic endeavour the lazy farks who rule over us would prefer instead to import ‘GDP enhancements’ — far less effort and has the side benefit of ensuring a comfortable retirement.

  12. No harm in dumping that dud policy.

    Need something much simpler and much more effective.

    Remove CGT from new builds completely but leave the current CGT discount for existing property.

    After all NZ doesn’t even have a capital gains tax.

    That will drive investors and speculators to new builds and the resulting buffer housing stock will snuff out capital gains and kill off negative gearing as well as a strategy.

    ScoFry cannot complain about removing a tax.

    Natural the half wits in the ALP looking for something to tax so they can hand out treats will hate it.

    Simplest solution for affordable housing.

    https://theglass-pyramid.com/2018/10/27/alp-and-negative-gearing-why-risk-it/

  13. reusachtigeMEMBER

    “I remain of the view that Labor’s negative gearing and CGT reforms did not harm Labor’s election fortunes”

    … LOLOLOL.

    Tell that to the people of Penriff (Lindsay) who love their trades and their property investment. It was once a safe Labor seat. They voted in a Liberal candidate, Melissa McIntosh, with the biggest margin ever and quite possibly this seat won the election for the Great Liberal Nationalists.

    • christ on a fcken popstick, doesn’t she just ooze talent….
      McIntosh was born in Penrith, and studied at Western Sydney University, graduating with a Bachelor of Arts in journalism, communications, public relations and video production.

    • Even though sometimes I think your saying things purely out of satire reua in this case your exactly right. I’ve met a few people in that area and other marginal seats and NG/CGT was definitely THE most important issue. Marginal seats where elections are won and lost are not held predominately by retirees who care about franking credits. They are held by 30-40 yr old something’s (typically families) who are at the mortgage stage of their life. Negative equity and more importantly the loss of tradie jobs coming from it was a centre issue.

  14. John Howards Bowling Coach

    I think I could pretty easily craft a strategy to defeat the LNP, but I don’t think the ALP deserve it because for every decent Australian in that party who wants to see us as a nation exceed our potential as a global leader, there are 10 idiots like Plibersek, Shorten, Bowen, and Albo who are just career idiots ready to Virtue Signal this nation to kingdom come. In the current dogma the answer would be easy, just be another wrecker, another Abbott, or Scummo, or Frydenberg. Just lie, lie, lie and ruin everything the LNP try to do regardless of if it is good or not. The Lies are swallowed by the morons and the greedy, who want to believe the immigrants are making them rich, are not flooding the nation with those who oppose our values and who want to snatch up every last penny of public funding. They want to think the economy is strong regardless of lack of national income of growing private debt, and a wholesale foreign investment invasion. They want to aspire to be a greedy selfish C++T like Turnbull who the very next job after pretending to care for our nation was to join the largest foreign raider fund on the planet. So lie to them just like Scummo and Abbott and they will elect you. Wreck the LNP agenda and lie about everything, the greedy public and the greedy immigrants eager to also grab all the benefits themselves will vote for you the very first chance they get. For those on PR and TR, who cares, they can’t vote anyway. Don’t put forward any positive ideas, people react more to fear than perceived good things in the future, especially if they are scared of losing their opportunity to ‘get ahead’. Howard that nasty old chap was the champion of this and pioneered the lies to middle class idiots who thought they would one day be Kerry Packer, Howard’s battlers were the mass delusion suckers, this nation is flooded with them.

    • Keep that under your hat. Let them figure it out on their own. It’s more fun to watch.

  15. I’m WFH today and have had the TV on the in the background. I walked past a few hours ago and saw Jim Chalmers give a press conference. The Libs will win another term if Jim Chalmers is the best talent that Labor have. He will become another Chris Bowen with his tough talk and complete lack of humility. What a cvnt.