Late last year, a group of business leaders lambasted negative gearing on the ABC’s Q&A program, acknowledging that the system was inherently flawed and acted to push-up property values by unfairly subsidising wealthier investors at the expense of poorer taxpayers.
Amongst this group of business panelists was Aussie Home Loans founder, John Symonds, who also came out swinging over the weekend in the AFR, claiming that negative gearing is killing the first home buyer market:
Aussie Home Loan founder John Symond told AFR Weekend the tax break [negative gearing] favoured investors and was distorting the property market.
“Negative gearing is a great tax break, but it needs a total overhaul to make it fairer. First home buyers have no hope of getting into home ownership these days unless they’re helped by their families,” Mr Symond said…
John Symond reckons putting a cap on the value of property which can be negatively geared is another way to give first home buyers a better shot of competing with investors.
But if the cap is too low, it could see investor demand becoming even more concentrated in the parts of the market targeted by first home buyers, he said.
“It’s been great for my business, but the government really needs to look at capping it a level,” he said.
The number of first home buyers going through Aussie Home Loans for finance has dropped by 50 to 60 per cent in the past four years.
“They’re walking away from what used to be the great Australian dream,” he said. “But with interest rates at their lowest point in history, and house prices only just coming off the bottom, if first home buyers can’t afford property now, they never will,” he said. “I’m very pessimistic on the outlook for them.”
Greens Senator, Dr Richard Di Natale, has also today requested the Coalition’s Commission of Audit address the negative gearing “sacred cow”, which he claims costs the Budget billions in foregone revenue and worsens fairness and efficiency:
Senator Di Natale said he was concerned that some savings options, such as negative gearing and the private health insurance rebate – which cost $5.5 billion in 2012-13 – were being spared from consideration for ”ideological reasons”.
”This is a case where the government’s ideology is trumping not just fairness but efficiency”…
We live in hope…
