As the 2016 Federal Election Campaign continues, negative gearing remains the hottest topic of discussion. To find out what negative gearing is and how it could affect you, go back to part 1 of the discussion here.
What did the former PM have to say on the subject?
The negative gearing debate continues with the former Australian PM, John Howard, leading the discussion last week at the First National Real Estate Convention in Cairns. He took to the stage in Cairns to discuss the affects removing negative gearing had in 1985.
Elimination of negative gearing in the past saw huge changes to rental affordability and did not decrease sale prices as much as expected. Mr. Howard had a lot to say on the subject.
“When negative gearing was removed by then Treasurer Paul Keating in 1985, it was quietly brought back in the 1987 budget,” said Howard.
“The debate needs to focus on that piece of field evidence because the experiment with negative gearing was widely regarded as a failure. That’s more important than glossy economist’s reports,” he said.
“Overall, the negative gearing debate is a triviality in terms of the real issues influencing housing affordability and home ownership,” said Howard.
Negative Gearing and the real estate industry leaders
Other leaders in the industry have spoken up on the issue with the Real Estate Institutes from around Australian and other leading Real Estate Agencies have formed a campaign to show these changes are beyond a class war and negative gearing affects everyone.
The campaign website states “this site is part of a campaign by real estate groups across the country who have united with the Real Estate Institute of Australia to make Australians aware of these disastrous consequences. Our industry participants pride themselves on being apolitical, but this time, the issue is far too important not to speak out.”
CEO of the Real Estate Institute of Victoria, Enzo Raimondo said the campaign’s key strategy is to inform the public about negative gearing so Australians can make an informed decision.
“The debate about negative gearing for property investment has become an emotive argument lacking facts and it is important that the mistakes made in 1985-87 are not repeated” stated Mr. Raimondo.
Mr Raimondo said the value of residential property in Australia is over $6 trillion which is the highest asset class in Australia. The majority of which are ordinary homeowners. The consequences of removing negative gearing would be significantly detrimental for the Australian economy home owners, investors and renters.
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