You will forgive me if I consider the analysis of people like Saul Eslake and Ken Henry over some internet forum anonymous VIs.
*yawn* I don't believe Ken Henry never said total tax take would increase and we could build heaps of public housing if NG was abolished. You mean you rather believe Macrobusiness because you paid your $100 bucks for their crummy advice
WTF?
While tax returns would taper downwards, if you abolished negative gearing tomorrow there would be a huge tax windfall for the Government.
And the removal of such incentives would make it easier for aspirant FTBs to compete.
But , you know, if you think the current level of investor activity in the market versus aspirant OOs is just right than so be it.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
She has not "turned" maybe she is spruiking for more government help for buyers as this could effect her hip pocket.
I've had my doubts about her Skamy. But when she starts talking about doing away with NG, the CGT concession and/or bringing in a broad based land tax, she IS starting to sound positively 'born again'. All of those proposals are direct attacks on the very heart of the property industry in this country. Shute, I'm a bear and even I don't agree with two of them. And while I'm a bit more ambivalent about the other one, I'd still not actually favour introducing it.
You will forgive me if I consider the analysis of people like Saul Eslake and Ken Henry over some internet forum anonymous VIs.
Instead of hurling abuse, why not try to address the point Trojan was making?
If NG is abolished, then the losses are simply deferred until the IP becomes cashflow positive.
So while there may be a temporary increase to government revenue, it would be reversed after a few years.
"Hurling abuse"
I'll add that to the Glossary of Shadowisms.
Nobody is hurling abuse at anyone.
anyway, there would be an increase to Government revenue, temporarily at least, which is exactly what I said.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
You will forgive me if I consider the analysis of people like Saul Eslake and Ken Henry over some internet forum anonymous VIs.
Instead of hurling abuse, why not try to address the point Trojan was making?
If NG is abolished, then the losses are simply deferred until the IP becomes cashflow positive.
So while there may be a temporary increase to government revenue, it would be reversed after a few years.
And that's assuming a blanket removal - which is NEVER going to happen. If anything were ever to happen on this front, it would be a grand-fathering approach, so only newly purchased properties would not be able to be NG'd. Likely also that any change would still allow it on new builds. So really, it would have stuff-all impact on government revenue, even in the short term, and in the long term net impact = zero for the reasons you state.
For Aussie property bears, "denial", is not just a long river in North Africa.....
You will forgive me if I consider the analysis of people like Saul Eslake and Ken Henry over some internet forum anonymous VIs.
Instead of hurling abuse, why not try to address the point Trojan was making?
If NG is abolished, then the losses are simply deferred until the IP becomes cashflow positive.
So while there may be a temporary increase to government revenue, it would be reversed after a few years.
And that's assuming a blanket removal - which is NEVER going to happen. If anything were ever to happen on this front, it would be a grand-fathering approach, so only newly purchased properties would not be able to be NG'd. Likely also that any change would still allow it on new builds. So really, it would have stuff-all impact on government revenue, even in the short term, and in the long term net impact = zero for the reasons you state.
Which again contradicts nothing that I said.
Perhaps another time, we can talk about all the other positive long term benefits that reform/ removal of NG would be bring.
Well, to be precise, I and a couple of others could do that and Team Bull could go about its business defending every single facet of the Australian tax code as it is currently constituted.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Only if you accept that fundamental reform cant produce a more egalitarian outcome.
For example, imagine how much public housing could be built using the increased tax take from the abolition of negative gearing.
Who wants to live in public housing? not you and certainly not people who are down on their luck. It is much better for poor people to be housed within the community in private rentals than to be housed in ghettos of drug addicts etc. I met do gooders like you when I was homeless as a child with their "aren't you lucky to live in a country like the UK with public housing" " Beggars cannot be choosers" when my Mum refused public housing in the roughest estate in Leeds.
The government is facilitating the community to provide low cost rentals and that, young man, is a much superior solution to public housing on any measure.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
I agree with Joye and all who are calling for Macroprudential etc., though would probably take it much further.
However, consider this...
Private credit is growing at around 4% p/a. There is no doubt that we are in a deleveraging cycle and if it continues to decline we would soon go into a deflationary spiral…(we are probably already in one…or at least in the early stages)
The general rationale is that we need credit growing at a level that creates 2-3% inflation. And to do that the RBA drops interest rates until this objective is accomplished…
I totally understand whey in a fractional reserve system we MUST maintain this minimum…
But…
If we are in an “age of deleveraging”, and the RBA drops interest rates as far as they have…and credit does not materially pick up…then what?
See…there is evidence to suggest that the majority of (conservative) mortgages owners are using the low rates to pay down debt…taking deposits AND credit out of the system…
In this scenario, where the general population becomes averse to debt, it is possible that the low rates alone could actually work diametrically counter to what the RBA wants them to do…if people don’t play ball…the low interest rates could actually drop credit FASTER
I believe there is enough evidence to suggest that this is possible…
So what they are doing now is exactly right in one sense, getting ANY credit going is a good thing right?…at least that is the theory…and perhaps if they can get house prices up a bit, homeowners might leverage up a bit more…keeping the flame alive…
Only problem is that to keep credit (money supply) growing, the banks are on the one hand having all the prudent conservative owners paying down debt, and transferring it to over in-debted speculators…
Not good.
Macroprudential tools right now would probably stifle the only real chance the RBA have of stopping money supply contracting???
Where this ends up, I don’t really want to know to be honest…
Only if you accept that fundamental reform cant produce a more egalitarian outcome.
For example, imagine how much public housing could be built using the increased tax take from the abolition of negative gearing.
Who wants to live in public housing? not you and certainly not people who are down on their luck. It is much better for poor people to be housed within the community in private rentals than to be housed in ghettos of drug addicts etc. I met do gooders like you when I was homeless as a child with their "aren't you lucky to live in a country like the UK with public housing" " Beggars cannot be choosers" when my Mum refused public housing in the roughest estate in Leeds.
The government is facilitating the community to provide low cost rentals and that, young man, is a much superior solution to public housing on any measure.
Skamy, believe me when I tell you; you haven't a clue what you are talking about.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Who wants to live in public housing? not you and certainly not people who are down on their luck. It is much better for poor people to be housed within the community in private rentals than to be housed in ghettos of drug addicts etc. I met do gooders like you when I was homeless as a child with their "aren't you lucky to live in a country like the UK with public housing" " Beggars cannot be choosers" when my Mum refused public housing in the roughest estate in Leeds.
The government is facilitating the community to provide low cost rentals and that, young man, is a much superior solution to public housing on any measure.
I was never homeless as a child. 'Course me olds did live in a tent when they were becoming 'upwardly mobile' - Mum sewed flower bags together so we didn't have a dirt floor; 'N used ta run out 'n get the locos ta stop 'n give her a tin bucket of hot water so her little precious could have a warm bath - She and the old boy got cold ones of course. Heck, they even had a 'meat safe' they hung up; 'N a pump up kero lamp - Yep; Fuck the 'good ole days' ... ('N remind me one day ta tell ya how me grandad lived Skamy. ) 'Course it was (and remains) generally warmer in Oz than the UK I guess.
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
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