Getting rid of negative gearing seems like a great short term idea, but it will quickly turn to haunt the Government like it did in the 80's. Investors will shy away from property, which will lead to a rental property shortage and increasing rents. The increase on public housing, which is already strong, will be damaging for state governments.
Negative gearing encourages investors to buy rental properties, which reduces the number of tenants dependent on public housing. Simple as that.
