Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Abolishing negative gearing a recipe for disaster

By Elizabeth Crouch - posted Monday, 20 February 2006


Both sides of politics have acknowledged the importance and value of negative gearing. In 2003 when the subject last surfaced as an issue, then Opposition Leader Simon Crean remembered the consequences of 1985, saying the removal of negative gearing would have “serious consequences” for the building industry.

Prime Minister John Howard was even more damning, describing the abolition of negative gearing as “just one of those crazy ideas that people who don’t understand the economy play with”.

The abolition of negative gearing and other tax breaks which the Business Coalition says must be traded to pay for its general tax reduction, takes a valuable tool of regulation out of the hands of government. One example: if it were decided that a major research and development effort into finding an efficient hydrogen fuel cell for cars was needed, then a targeted tax concession would ensure the funds for such a project became available.

Advertisement

By following the Business Coalition’s proposals the government would lose the leverage of the tax system to advance national priorities. Given the existing demand for rental accommodation, surely the proposal of the Business Coalition must also advocate increases in government spending for social and public housing alternatives? Few would doubt that such an option would be considered by government or pose a cost-effective solution to that which currently exists.

HIA has never resiled from the need for tax reform, and in the past has contributed actively to the debate. However, this proposal can only result in soaring rents, deteriorating affordability and a collapse of the housing industry - an industry so vital to the ongoing success of the economy. The Business Coalition’s proposal signals a return to the bad old days of the mid-1980s, a decision Australians can ill afford.

  1. Pages:
  2. 1
  3. Page 2
  4. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

24 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Elizabeth Crouch is the Housing Industry Association’s senior executive director – Industry Policy.

Other articles by this Author

All articles by Elizabeth Crouch

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Elizabeth Crouch
Article Tools
Comment 24 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy