Terry Ryder – Founder of hotspotting.com.au 
THERE’S NO REASON FOR IT TO BE CHANGED
I would say categorically, no and I’m absolutely 100% certain that they won’t be. It’s an issue that just keeps getting brought up but no politician with his head screwed on is going to make that change to negative gearing.
There’s no reason for it to be changed, it’s a system in place for clear reasons, for valid reasons and it works. The one and only time that a government in Australia decided to scrap it precipitated a disaster in the rental market and they had to bring it back very quickly. That happened in the era that Bob Hawke was prime minister and Paul Keating was treasurer.
Particularly in our capital cities, negative gearing is necessary for the viability of people buying investment properties. Without it, there would be a sharp reduction in the number of people who a buying properties in the capital cities because it’s very, very hard in our major cities to buy an investment property that’s positive cash flow. The vast majority are cash flow negative and without the tax benefit, it’s not a viable investment, therefore the pool of rental properties that are needed for those who rent, would dry up very quickly.
I’m not arguing from the viewpoint of vested interest, I don’t buy negatively geared property, I always buy positively geared. From my personal viewpoint, I don’t care whether it exists or not because I’m not affected but I think it would be a disaster for the property market for people who need to rent if it were removed. As it happened previously when Paul Keating removed it briefly before bringing it back.
Peter Bushby – President of the Real Estate Insitute of Australia (REIA).
NEGATIVE GEARING NEEDS TO BE RETAINED, STAMP DUTY NEEDS TO BE ELIMINATED
We [REIA] strongly agree with the report’s [Grattan Institute Renovating Housing Policy] recommendations to eliminate stamp duties, however it’s essential negative gearing be retained in its current form for the purpose of property investment.
REIA has always supported negative gearing because it helps in the provision of rental accommodation. Negative gearing for property investment is complementary to the goals of the Government’s Housing Affordability Fund (HAF) in addressing the supply of rental accommodation.
To remove it would show that we haven’t learnt anything from history. When negative gearing was abolished in 1985 it had disastrous consequences for the property market and for people trying to rent. Rents rose 37% across Australia and by 57% in Sydney. Thankfully, negative gearing was reinstated in 1987.
It is far too short sighted to link investor interest in housing to negative gearing alone. Negative gearing is only one of a range of factors that contribute to the level of investment in property. Other factors include interest rates, availability and accessibility of finance, share market performance, the unemployment rate, housing supply and consumer confidence.
The myth that negative gearing is a plaything of the wealthy also needs to dispelled. The majority of taxpayers with a negatively geared property earn less than $80,000 a year. With the new government, expectations that industry will be involved in finding workable solutions to these old issues are high.
The debate is quite prominent in the twittersphere, with Catherine Cashmore and Oliver raising their concerns.
@CCASHMORE_BUYER ..I seem to recall in late 80s NG was curtailed only to be returned after its removal reduced the supply of rental accom
— Shane Oliver (@ShaneOliverAMP) October 22, 2013
If you would like someone’s opinion added to the list, please email ntrotman@propertyobserver.com.au and we’ll consider getting their viewpoint.
This article first appeared on Property Observer.
