Graeme Wolfe, HIA’s chief executive of industry policy and media, said new housing is one of the most highly taxed sectors in Australia’s economy, and the removal of negative gearing would only make the situation worse and discourage investment.
“Negative gearing promotes private investment in the rental market, both stimulating economic activity and taking the pressure off social housing and the public purse,” he said.
“With an ageing workforce and future pressure expected on publicly-funded services, policy settings such as negative gearing that promote wealth creation and self-sufficiency in retirement should be promoted.”
Mr Wolfe said it is important to remember that negative gearing is not the domain of ‘wealthy investors’.
“Figures from the ATO demonstrate that 79 per cent of tax payers with a rental property declare a taxable income of less than $100,000,” he said.
“In fact, seven out of 10 tax payers with a rental property earn less than $80,000.
“A body of independent research has been developed over a number of years that demonstrates categorically that negative gearing is a positive force for the Australian economy,” Mr Wolfe said.
[Related: My take on negative gearing reform]