Once again, the Coalition has been caught out lying on negative gearing, claiming that last time it was ‘abolished’ (i.e. losses quarantined) – between 1985 and 1987 – it pushed up rents.
As revealed by ABC Radio this morning, Prime Minister, Tony Abbott, claimed the following to the Liberal State Council in Queensland over the weekend:
“We are not going to fiddle with negative gearing. Because the last time a Labor Government fiddled with negative gearing, it destroyed the rental market in most of our major cities”…
“Most of our major cities”. Really? Then how do you explain the fact that real rents only rose in Sydney and Perth when negative gearing was abolished in the 1980s (see red line):
Whereas rental growth was flat or fell elsewhere:
But don’t just take my word for it. Here’s what the 1987 Cabinet Submission on negative gearing said about rental growth (my emphasis):
“Data for individual capital cities suggest that, as might be expected, rents have risen more rapidly in those cities where vacancy rates have been tightest. In the twelve months to March quarter 1987, rent increases in six of the eight capitals lagged the CPI“.
Now, if there was any truth whatsoever in Abbott’s claim that abolishing negative gearing “destroyed the rental market”, then wouldn’t rents have risen Australia-wide, rather than in only Sydney and Perth?
Abbott has also conveniently have left out that rents only rose in Sydney and Perth because rental vacancy rates were very low at the time in these two cities – as shown in the 1987 Cabinet Submission on negative gearing (see below table) – not because of negative gearing’s temporary ‘abolition’.
For once, could we please have some honesty on this issue, not propaganda?
