Australian Politics Forum - Bowen flags changes to negative gearing

longweekend58

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Re: Bowen flags changes to negative gearing
Reply #15 - Apr 24^th, 2015 at 5:25pm

Bam wrote on Apr 24^th, 2015 at 1:28pm:

Negative gearing: Labor treasury spokesman Chris Bowen says any changes to be taken to election

Quote:

Shadow treasurer Chris Bowen has left open the idea of Labor going to an election with a policy of winding back negative gearing.

It might not be popular; almost 2 million Australians invest in property, with the majority of them making net rental losses that they use to reduce their income tax bill, costing the federal budget up to $5 billion a year in revenue.

But Labor might be prepared to wind back negative gearing for future investors in property.

Mr Bowen was pressed about it last night by Leigh Sales on 7.30.

"Negative gearing is on the table as something you're having a look at?" she asked.

"What I said last time was that any changes we took to negative gearing would be taken to the next election," Mr Bowen responded.

"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.

"And I also I think said to you that I didn't envisage either side of politics abolishing negative gearing in its entirety.

"But of course when everything is being examined in a tough fiscal situation, any responsible opposition would be considering a range of measures. But we'll be upfront about anything we do before the next election."

Government rules out negative gearing changes

Prime Minister Tony Abbott ruled out changes to negative gearing last week, and was backed last night by Social Services Minister Scott Morrison.

Mr Morrison was speaking to former Labor minister, now Sky TV presenter, Graham Richardson, who argued negative gearing was a tax break for the wealthy.

"That is actually not true," responded Mr Morrison.

"Mate, a battler out there in the suburbs on $70 grand with the three kids, how many extra houses do you reckon he owns?" questioned Mr Richardson.

"You'd be surprised how many people ... particularly in small business, who don't earn a lot of money, have invested through negative gearing into properties to provide for their own retirement," Mr Morrison replied.

"That is a fairly common practice. I know plenty of people ... on meagre incomes. No, not even in a super scheme. They've just done it for their kids, they've done it for themselves, and they've made big sacrifices to do it."

Ken Morrison from the Property Council of Australia is another who argues that property investors are everyday Australians, and that they help by providing rental accommodation.

"Eighty per cent of people who own investment properties that negative gear them [are] actually on salaries of $80,000 or less," he said.

"So this is actually something that middle Australia uses to help build their household wealth, build for their future, provide security for their families.

"This is not a rich person's toy, this is not for the rich and famous. This is for middle Australia saving to get ahead."

Not so, responded Saul Eslake, chief economist with Bank of America Merrill Lynch Australia.

He replied that the $80,000 a year that Ken Morrison referred to was their income after they had minimised their tax.

The most recent Tax Office statistics put the number earning $80,000 or less at 72 per cent, and an ABC analysis last year showed how those figures massively underestimate the income of real estate investors.

Instead, Mr Eslake pointed to figures used by the Reserve Bank that show 60 per cent of the money borrowed for property investment is borrowed by those on the top 20 per cent of incomes.

"I can't think of anything that would provide more assistance to the increasing proportion of Australian young people and even middle-aged adults who would like to be homeowners than getting rid of negative gearing," concluded Mr Eslake.

well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it.

and PS they gotta get into power first.

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Bam

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Re: Bowen flags changes to negative gearing
Reply #16 - Apr 24^th, 2015 at 6:29pm

longweekend58 wrote on Apr 24^th, 2015 at 5:25pm:

well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it.

and PS they gotta get into power first.

You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties.

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Bam

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Re: Bowen flags changes to negative gearing
Reply #17 - Apr 24^th, 2015 at 6:37pm

Has anyone noticed how the property lobby misrepresents the facts?
Quote:

Ken Morrison from the Property Council of Australia is another who argues that property investors are everyday Australians, and that they help by providing rental accommodation.

"Eighty per cent of people who own investment properties that negative gear them [are] actually on salaries of $80,000 or less," he said.

"So this is actually something that middle Australia uses to help build their household wealth, build for their future, provide security for their families.

"This is not a rich person's toy, this is not for the rich and famous. This is for middle Australia saving to get ahead."

Not so, responded Saul Eslake, chief economist with Bank of America Merrill Lynch Australia.

He replied that the $80,000 a year that Ken Morrison referred to was their income after they had minimised their tax.

The most recent Tax Office statistics put the number earning $80,000 or less at 72 per cent, and an ABC analysis last year showed how those figures massively underestimate the income of real estate investors.

Instead, Mr Eslake pointed to figures used by the Reserve Bank that show 60 per cent of the money borrowed for property investment is borrowed by those on the top 20 per cent of incomes.

"I can't think of anything that would provide more assistance to the increasing proportion of Australian young people and even middle-aged adults who would like to be homeowners than getting rid of negative gearing," concluded Mr Eslake.

Ken Morrison (Property Counceil of Australia) is misrepresenting the facts here. Many people who have negatively-geared properties have low TAXABLE incomes. Their actual incomes, before tax, are greater; in some cases much greater. Morrison is confusing after-tax incomes with salaries.

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RUNVS

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Re: Bowen flags changes to negative gearing
Reply #18 - Apr 24^th, 2015 at 6:38pm

Bam wrote on Apr 24^th, 2015 at 6:29pm:

longweekend58 wrote on Apr 24^th, 2015 at 5:25pm:

well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it.

and PS they gotta get into power first.

You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties.

Nor will the majority of Australians be effected by Labor's new Super policy.

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crocodile

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Re: Bowen flags changes to negative gearing
Reply #19 - Apr 24^th, 2015 at 8:35pm

Ex Dame Pansi wrote on Apr 24^th, 2015 at 5:19pm:

John Smith wrote on Apr 24^th, 2015 at 1:53pm:

Bam wrote on Apr 24^th, 2015 at 1:37pm:

I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties

devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock?

if not who's going to upgrade all the old stock?

The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again.

What's this before negative gearing bit. Leveraged investments have been allowed for yonks. It just wasn't called negative gearing until the mid eighties.

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Very funny Scotty, now beam down my clothes.

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John Smith

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Re: Bowen flags changes to negative gearing
Reply #20 - Apr 24^th, 2015 at 9:04pm

Ex Dame Pansi wrote on Apr 24^th, 2015 at 5:19pm:

John Smith wrote on Apr 24^th, 2015 at 1:53pm:

Bam wrote on Apr 24^th, 2015 at 1:37pm:

I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties

devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock?

if not who's going to upgrade all the old stock?

The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again.

but nail doesn't want first home buyers to buy old asbestos riddled dumps, only premium properties are good enough Cheesy

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John Smith

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Re: Bowen flags changes to negative gearing
Reply #21 - Apr 24^th, 2015 at 9:07pm

Bam wrote on Apr 24^th, 2015 at 6:29pm:

longweekend58 wrote on Apr 24^th, 2015 at 5:25pm:

well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it.

and PS they gotta get into power first.

You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties.

1.8 million people is a good number of people to oppose it, especially when most of them are in the major centres . A lot of people that live outside the CBD's don't really give a fig either way.

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Our esteemed leader:
I hope that bitch who was running their brothels for them gets raped with a cactus.

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Bam

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Re: Bowen flags changes to negative gearing
Reply #22 - Apr 24^th, 2015 at 11:05pm

John Smith wrote on Apr 24^th, 2015 at 9:07pm:

Bam wrote on Apr 24^th, 2015 at 6:29pm:

longweekend58 wrote on Apr 24^th, 2015 at 5:25pm:

well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it.

and PS they gotta get into power first.

You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties.

1.8 million people is a good number of people to oppose it, especially when most of them are in the major centres . A lot of people that live outside the CBD's don't really give a fig either way.

Just so we're on the same page ... Bowen isn't actually proposing to remove negative gearing for properties that are currently held, nor I suspect for newly-constructed properties. Only purchases of existing properties that are made after a particular date (which would not be earlier than the 2017 budget) would be affected.

What really needs looking at though is the concessional rate of capital gains. This is causing more harm.

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You are not entitled to your opinion. You are only entitled to hold opinions that you can defend through sound, reasoned argument.

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Karnal Gold Member Offline Australian Politics Posts: 96575	Re: Bowen flags changes to negative gearing Reply #23 - Apr 25^th, 2015 at 12:03am Where’s Armchair asking why if this is such good policy, why didn’t Labor do it when they were in power? Pathetic, leftards, just pathetic.
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Grappler Deep State Feller

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Re: Bowen flags changes to negative gearing
Reply #24 - Apr 25^th, 2015 at 12:48am

RUNVS wrote on Apr 24^th, 2015 at 6:38pm:

Bam wrote on Apr 24^th, 2015 at 6:29pm:

longweekend58 wrote on Apr 24^th, 2015 at 5:25pm:

well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it.

and PS they gotta get into power first.

You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties.

Nor will the majority of Australians be effected by Labor's new Super policy.

Exactly correct - nobody on an income less than $250k pa, or with a super income under $75k pa will be affected.

I really don't see what all the fuss is about. Anyone who has an income of a quarter of a million a year and cannot put enough away without tax subsidy for retirement is not worth their salary.

Anyone who had enough to salt away enough to earn over $75k in super payout had enough to not need subsidy. It was only supposed to be aimed at those who would eventually draw a pension - which all those persons would not.

It was a gutless and self-serving policy the way it was pushed through and left the gate open to those who had no need for and never would draw a pension to exploit it for huge amounts of tax-free money.

The subsidy should always have applied to only those with sufficient income to deposit enough to create enough to not have to draw a Pension on retirement - not those with masses to put away.

For example - to garner $1m in super without paying any tax on annual payment, over 25 years of the operation of this scheme, and allowing a return of 10% - a person would have to put away a minimum of around $400k a year. anyone with that kind of residual discretionary income would never draw a pension and most certainly could engineer a comfortable retirement without this subsidy from the public purse.

It thus appears to me quite clearly that, rather than being a scheme to reduce the burden of pensions - this became just another way of allowing the rich cronies a handful of cash from the public coffers - and legitimising it. Certainly they got far more than those who would need a pension without the scheme.

Marcos would have been proud of this one....

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Grappler Deep State Feller

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Re: Bowen flags changes to negative gearing
Reply #25 - Apr 25^th, 2015 at 12:52am

One property as a private single operator of business - OK.

More than one - incorporation as a company with all the burdens associated with it, including no ability to offset against personal income.

Again it is the capital gains that is absurd on the face of it. Why should someone cop all tax deductions along the way and then another when they sell for a profit? Income is income and profit derived after sale after tax concessions is income full and simple.

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“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”
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Armchair_Politician Gold Member Offline Australian Politics Posts: 26347 Gender:	Re: Bowen flags changes to negative gearing Reply #26 - Apr 25^th, 2015 at 7:06am John Smith wrote on Apr 24^th, 2015 at 1:26pm: i'll wait to see the details before deciding if I like it or not Sure you will, John.
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John Smith Gold Member Offline Australian Politics Posts: 75162 Gender:	Re: Bowen flags changes to negative gearing Reply #27 - Apr 25^th, 2015 at 7:51am Armchair_Politician wrote on Apr 25^th, 2015 at 7:06am: John Smith wrote on Apr 24^th, 2015 at 1:26pm: i'll wait to see the details before deciding if I like it or not Sure you will, John. oh look, the village idiot is back ......
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Ex Dame Pansi

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Re: Bowen flags changes to negative gearing
Reply #28 - Apr 25^th, 2015 at 8:09am

John Smith wrote on Apr 24^th, 2015 at 9:04pm:

Ex Dame Pansi wrote on Apr 24^th, 2015 at 5:19pm:

John Smith wrote on Apr 24^th, 2015 at 1:53pm:

Bam wrote on Apr 24^th, 2015 at 1:37pm:

I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties

devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock?

if not who's going to upgrade all the old stock?

The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again.

but nail doesn't want first home buyers to buy old asbestos riddled dumps, only premium properties are good enough Cheesy

Not at the current price, but if/when NG is abolished, I'm sure lots of first home buyers will pick them up because investors certainly won't want them.

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John Smith

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Re: Bowen flags changes to negative gearing
Reply #29 - Apr 25^th, 2015 at 8:11am

Ex Dame Pansi wrote on Apr 25^th, 2015 at 8:09am:

John Smith wrote on Apr 24^th, 2015 at 9:04pm:

Ex Dame Pansi wrote on Apr 24^th, 2015 at 5:19pm:

John Smith wrote on Apr 24^th, 2015 at 1:53pm:

Bam wrote on Apr 24^th, 2015 at 1:37pm:

I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties

devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock?

if not who's going to upgrade all the old stock?

The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again.

but nail doesn't want first home buyers to buy old asbestos riddled dumps, only premium properties are good enough Cheesy

Not at the current price, but if/when NG is abolished, I'm sure lots of first home buyers will pick them up because investors certainly won't want them.

who do you think is going to sell them?

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Our esteemed leader:
I hope that bitch who was running their brothels for them gets raped with a cactus.

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