Vertigo these people have investment properties and will do anything to defend negative gearing, they don't care about anyone but themselves and vote with their backpocket.
When they are out in the street and someone bashes them one day and they wonder why nobody would help them they can know they contributed to the way society is.
They don't care about young people or first home buyers...ps I own my home and its a 7 figure house... Iw ould never invest in property until negative gearing is scrapped.
Map: Australia
Senior economists have suggested the Federal Government should scrap negative gearing, a move that would save $5 billion in the first year.
Negative gearing allows property investors to claim expenses for a rental property including interest payments, repairs and council rates to reduce tax paid on any other income.
Bank of America Merrill Lynch chief economist Saul Eslake said the original idea behind the tax break has not worked.
"In my view it's serving to push up the price of the existing dwelling stock to the disadvantage particularly of younger people, who would like to become home owners, and previous generations who would have been home owners by now already," Mr Eslake said.
He said that the original idea of negative gearing on residential property was to promote the construction of new houses and increase the stock of rental properties, but that has not worked.
"We've reached a point now where investors account for more than half the borrowing that's undertaken for the purchase of established properties, and nearly half of all the borrowing for purchases of properties of any type," he said.
He said using negative gearing was hurting the long-term supply of housing. Video: Watch Sabra Lane's report (7.30)
"Many people, of course, do continue to argue that it does something to increase the supply of housing," Mr Eslake said.
"But that - like so many other things said by proponents of negative gearing - doesn't stand a moment's confrontation with the facts."
The Housing Industry Association's chief economist Harley Dale disagreed.
"One of the principal arguments made by opponents of negative gearing is that it would supposedly magically unlock all this housing stock as it's offloaded and becomes available for first homebuyers," Mr Dale said.
"I don't think the world works in that simple naive manner." Negative gearing 'pushes property prices up by 9 per cent'
Ratings agency Moody's estimated that negative gearing has pushed up property prices by 9 per cent.
In its recent financial stability statement, the Reserve Bank said the composition of the housing and mortgage market had become "unbalanced", with new lending to investors "being out of proportion".
Negative gearing in its current form is untenable. We need to have a mature, considered debate in this country about modifying it, over a number of years, but we need to begin now.
Senator Nick Xenophon
But with 1.25 million Australians using negative gearing to invest in property, it is a political football.
One politician arguing for change is Independent Senator Nick Xenophon.
"Negative gearing in its current form is untenable," he said.
"We need to have a mature, considered debate in this country about modifying it, over a number of years, but we need to begin now.
"That has been a sacred cow that really needs to be challenged sooner rather than later."
A new paper on tax reform to be published soon by global accounting giant PricewaterhouseCoopers showed that any move to cut negative gearing would save the government $5 billion in the first year.
It also calculated that abolishing the concessional capital gains tax rate would add another $4 billion to that saving.
But tax partner Paul Abbey warned that negative gearing was just one part of discussion, and that no one should rule out anything.
"For each person who thinks it is unpopular, there is a person who think it is a necessary piece of reform," Mr Abbey said.
"What that means is that we need to discuss each reform, work out what we should do and shouldn't do.
"That's a big debate, that's putting everything on the table."
Photo: Bank of America Merrill Lynch chief economist Saul Eslake said negative gearing was pushing up the prices of existing dwelling stock. (ABC: 7.30)
