The ongoing debate about "Negative Gearing"

The legislation, now known as "Negative Gearing" was apparently initiated by the "lyons" government in 1936.

The motives or reasoning were then unclear,as the term was not described in that form. However, since that time it has been contentious. Never seriously challenged, by our so-called political masters, the two-party system that still prevails in our parliament to this day. In 1985 the Hawke/ Keating government rightly challenged its place in our taxation regulations. Recognising at least in part, that it was a tax rort that favored the higher income earning taxpayers, particularly when it came to be used expressly for housing finance . It was supposed to supply and overcome the increasing demand for housing. This apparently was the justification for this lurk in 1936. All that was achieved from the beginning, was the benefit to those earning higher incomes.

It has never truly helped in this context and since about mid 2019 to 2022 when the RBA reduced the bank rate to below 1.0% which by the way enabled our banks to increase their lending margins significantly, every investor thought it was xmas and it was then, that property/ house prices escalated enormously. Unfortunately, this allowed every high-earning opportunist as well as those from overseas, to leap in and drive the market to extremes. Once again our so-called political masters sat on their hands or even participated in what was seen as a time of mana from heaven. The fact that inevitably, interest rates would eventually resume their normal levels, has now resulted in those that should have been more conservative, agitating for the RBA to reduce the bank rate.

For those of us who since about mid1965 until about 2000, have rarely had to accept mortgage rates below 7.5 % which is about the rates being currently charged, we find it frustrating that current mortgagees are now demanding the RBA reduce rates so that they can subsist. Surely those who joined the bun fight and paid far more than they should have, deserve little sympathy. By the way,

our average income earners should be pressing their local MP's to encourage the government to closely monitor cash rate margins.

As is usual our politicians will do nothing, as they sit on their hands, enjoying their munificent parliamentary packages.

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