Image from news.com.au : Photo by Tim Hunter
There have been times when the tactics of the Liberal Party in this election campaign have confused me. Apart from having Dutton do most of the talking, letting some of the other shadow ministers appear has also been a grave mistake. I understand that their original plan was to be a small target, so they’d have been better sticking to that and all going on holiday in the hope that the electorate forgot who they were. That seems to have been very successful for Barnaby Joyce…
But given their decision to appear on debates and interviews, some of their talking points seem a little hard to follow.
Take negative gearing. Labor have said that they have no plans to make any changes, even if Dr Chalmers asking for something from Treasury that apparently wasn’t modelling because he said that it wasn’t… I presume that I can call him that in spite of him being referred to as “so called Doctor” by Mr Dutton… or so called “Mr Dutton”…
Anyway, I noticed that a number of Liberals have been suggesting that, contrary to Labor’s protestations, they are planning to make changes to negative gearing. Labor are dismissing this as a scare campaign, which I also find puzzling.
I mean the thing about a scare campaign is that it has to be scary. Telling me that if I elect my opponent, they’ll tax billionaires and use the money to give me an all expenses paid trip to Paris doesn’t fill me with fear and loathing. Telling me that David Littleproud could be acting PM, on the other hand, fills me with trepidation but it can’t be called a scare campaign either because that’s exactly what might happen should Dutton win on May 3rd…
And so, I’m trying to work out who is going to go: “Changes to negative gearing? Oh no, how will those poor blokes with 26 houses cope?” And, as for those are negative gearing, they’re probably astute enough to realise that any changes would be grandfathered and that their tax… um, arrangements are safe enough for the foreseeable future. Either way, they’re probably not the swinging voters that the Liberals need to win over.
From what I can see on the internet, polls and focus groups don’t have a positive attitude to negative gearing. Most people think that something should be done to make it a little bit less generous to people who are generally using it to minimise their tax… (Actually, that’s the only reason people are using it. If you can find someone who’s only doing it so they can increase the number of available properties for rent, please let me know and find even greater altruistic acts they can perform.) So, to constantly suggest that Labor might actually do something, begs a follow-up question like: “The Greens want something done about negative gearing, so are you suggesting that they should direct their preferences to Labor?”
As I’m fond of pointing out, politicians need to be careful about what the listeners hear, because it might be different to what they intended as the takeaway. For example, during Covid the complaint: “Thanks to these state lockdowns, you might not get to go to your grandmother’s funeral!” has a rather ambiguous message.
John Howard’s message when he was campaigning to return Curtin from the grips of evil in the form of the satanic Kate Chaney who had the temerity to steal a Liberal seat was very clear: “I think the question is whether enough people who voted for Chaney last time out of anger with the Liberal Party have repented, and want to return.”
Yes, if you voted against the Liberal Party it was in a fit of pique and if you’re truly sorry, you can repent and you’ll be forgiven and they’ll accept your vote. A great message for Easter there. I guess they’ll still accept your vote even if you haven’t repented but I don’t know enough about repentance given many of my sins are still current, even if the temptation to vote for Monique Ryan has been taken away from me by the changing of the electoral boundaries which moved me into Menzies…
And when Jane Hume was commenting on the backdown on working from home and doing the sort of mea culpa I’ve come to expect from politicians*, I noticed that she wasn’t completely admitting defeat. “It was a good policy that hadn’t found its appropriate time!”
One presumes that the appropriate time is AFTER the election.
*You know, the “we got the policy right but we didn’t explain it well enough for you morons to understand it, so we’re changing it!”
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Do landlords receive any negative gearing if the homes a fully rented?
FH, with ng, landlords can deduct the cost of debt against any rental income. No income, no problem. Costs can be offset against unrelated PAYE anyway. The real purpose of ng was to increase the amount of debt an investor could go into while simultaneously disadvantaging home-buyers at auctions. It worked real good.
Florence
The trick with Negative Gearing is first to make a very bad investment in property. You know you are on the right track when all the other bidders, including prospective first homebuyers, at the auction have left the floor to you.
Having established that what you have paid for the property cannot pay for itself i.e. after paying your mortgage, insurance, repairs & maintenance you find that, even with todays' highly inflated rents, you are behind the eight-ball : more money going out than coming in you are negatively geared and the Liberals love you.
But not to worry, you still have the income from your regular job on which you pay income tax. This is where John Howard saves you from being an absolute silly sausage and allows you to offset your losses on your investment property against the tax you are paying on your regular earnings (as a doctor, dentist or as the Liberals like to say, as a nurse or policeman - that's where Spud got the idea). So you are actually paying less tax than another property investor who made a sound or positively geared property investment i.e. one where the rental income covered your outgoings and left you with a small margin of profit - these investors are known as the silly sausages of the property investment game.
The idea was that the property investors would, in theory, build new houses that they would rent out at a loss and thus increase the stock of rental properties and at the same time offset their losses against other taxable income by NG. The big bonus then came when they sold this dud investment and got to pay half the capital gains tax that would normally apply: this was known as the John Winston 'come in spinner' award.
In fact, the property investors rarely build new homes, they 'churn' existing homes thus increasing their value and taking them beyond the reach of the average homebuyer.
So, you may well ask why don't we scrap this rort and the answer has to be spineless politicians who don't want to be seen doing something that is right but which can be used against them relying on community ignorance.
Have I missed anything ?
Thank you Rossleigh for your clear concise explanation of the COALition ''policy'' on housing. The Shorten amendments to the Negative Gearing (NG) legislation IMHO are essential to slow the rampant price rising of residential real estate across the nation..
Briefly, established arrangements will be grandfathered and fresh investments in residential real estate will have NG limited to ''new builds only'', thus encouraging an expanding supply of new residential housing.
Then Little Johnnie Howard's overgenerous cuts to CGT need to also be restored to former levels, also as a grandfathered amendment. Really Howard policies were the cause of most of these shortages in residential housing aided by nine (9) years of neglect by the RAbbott Turdball Scummo COALition.
Perhaps NOtional$ Little-to-be proud-of has been hard of Beetrooter restraining him to our New England electorate until 04 May 2025. Poor dear has only attended one pub event in the newly added to the electorate southern end, away from the economically and socially backward real New England where the ladies of Tamworth appreciate the male ""NOtional$ Family Values'' of adultery, alcoholism, bigotry, corruption, deceit, fornication, sexual harassment and misogyny.
Still, the miners of Musswellbrook are fit & feisty with reputations for being built like large concrete dunnies, two axe handles across the shoulders and fight like threshing machines, so their ladies there will likely be safely squired to all NOtional$ events.
The resurrection of Howard is a worrying sight for political commentators. Seventeen (17) years after he was booted into political obscurity, my mate Blind Freddie can see that the LIARBRAL$ have had no fresh policies for Australian voters only nine (9) years of corrupt maladministration under the RAbbott Turdball Scummo misgovernment.