The wider property industry (of which real estate is a big part) is the largest employment sector in Australia, providing around one in four of all jobs in this country.
If negative gearing is abolished, it’s estimated some $19 billion annually will be slashed from Australia’s GDP: that’s not rich people’s profits, but money that washes through the system in the form of consumer spending, which will mean more business closures and fewer jobs.
That means less tax revenue for the government, not more as claimed, as fewer people paying tax wipes out any “saving” from ending negative gearing.
It means less money for government to spend on services: unless they borrow it, that is.
It means more people requiring social housing, which in turn means even greater demands on government.
It means lower superannuation payouts for ordinary workers, as funds exposed to investments in residential property deliver smaller returns to their members.
It means fewer homes being built at a time of rapid population growth.
Whilst the economy would eventually recover from the shock, in the short term wiping $19 billion out of it could very well induce a recession, the effects of which go far beyond the property sector, wiping out jobs and businesses and livelihoods.
And why? Because some people are pushing the message that abolishing negative gearing simply equates to the removal of a tax lurk that will “hit the rich.”
A recession, which would shackle an industry that is vital for Australia’s continued transition from the mining boom, is quite a price to pay just for that – especially because it’s not even true that negative gearing is only a perk for “the rich.”
It just doesn’t make sense.
Negative gearing affects everyone. Why risk so much right now?
Authorised by Jock Kreitals, 16 Thesiger Court, Deakin ACT 2600
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