Negative gearing debate reignites

Negative gearing debate reignitesWhile the Prime Minister has ruled out changes to negative gearing, Shadow Treasurer Chris Bowen has suggested that concessions may be tightened under a Labor Government.Negative gearing enables Australians to invest their hard-earned money in real estate to “give themselves and their children some financial security”, Treasurer Joe Hockey said last week.The Treasurer also pointed out the “very strong argument that if you were to abolish negative gearing, you would see a significant increase in rents”.The Treasurer’s statement followed comments by Shadow Treasurer Chris Bowen that negative gearing concessions could be limited to new houses or just one investment property under changes being considered by the federal Opposition.Speaking at a National Press Club event, Bowen said that it would be “irresponsible to rule out going to the next election with changes to negative gearing”.Later, on the ABC’s 7.30, Bowen said that “our principle would be that people who’ve invested in good faith with existing rules shouldn’t be disadvantaged and anything we do should not take away from new housing stock, which is very important for housing affordability”.Social Services Minister Scott Morrison responded, arguing that “where Australians try to build their wealth and finances for their own retirement, we should just say thanks rather than putting them in our tax sights”.Property Council analysis of Australian Taxation Office data underscores the fact that negative gearing is used by middle Australia to help build their household wealth.The data finds that those claiming negative gearing concessions in 2013 included 83,000 clerical workers, 62,000 teachers and child carers and 12,300 emergency service workers – all of them earning under $80,000 per annum.”These people aren’t the rich and famous, nor are they property barons, but they do deserve a fair go,” says Property Council’s chief executive, Ken Morrison.The Property Council will be updating this information when 2012-13 data is released by the Australian Bureau of Statistics.