I think that there are clear benefits to having a negative gearing policy (as opposed to government housing - which is disastrous in many other countries) and I don't think it should be removed completely but changes to need to be made.
Eg. A homeowner could buy an "investment property" in Toorak that they eventually want to move into - rent the place out for a few years and claim the losses from the government (basically having the government pay part of the loan for them) - then sell their PPOR and move into the Toorak place.
Clearly a situation such as this is not generating affordable housing for those that need it. It is simply middle class welfare subsidised by taxpayers. There need to be changes that address this sort of problem.
