Former Prime Minister John Howard OM AC today told 350 delegates at the First National Real Estate convention in Cairns he was intrigued that there had been very little reference, in the federal election debate about negative gearing policy, to the experience of its removal in 1985.
“When negative gearing was removed by then Treasurer Paul Keating in 1985, it was quietly brought back in the 1987 budget,” said Mr 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 economists reports.
“Affordability of rental property is a critical element of the debate and, as a society, we should always be conscious of the less fortunate who could be affected. We shouldn’t be interfering with something that has been a principle of our taxation system for a very long time.
“When negative gearing was restored in 1987, the justification was that Capital Gains Tax had been introduced, but the Capital Gains Tax had been introduced when negative gearing was suspended”.
Commenting on housing affordability, Mr Howard indicated he believed the high cost of housing is fundamentally a product of the forces of supply and demand, the product of poor planning decisions by State Governments and local councils, not the taxation system.
“Overall, the negative gearing debate is a triviality in terms of the real issues influencing housing affordability and home ownership” said Mr Howard.
Issued by: First National Real Estate
For further information contact: Stewart Bunn, National Communications Manager, First National Real Estate, on 0413 624 317