Negative gearing has a useful function in the first 3-5 years of owning a property as it is during those years that improvements and debt reduction should be implemented. Negative gearing however becomes self defeating and destructive when it is perpetuated for the sake of minimising tax and nothing else.
In the 80's and 90's it was a useful way of minimising tax whilst buying as much property as possible to maximise capital gain which was taxed quite lightly compared to other types of income.
