Rona, As I said, it will take a number of measures to improve...

Rona,
As I said, it will take a number of measures to improve the current situation. One idea alone cannot do it and that includes supply. Lets take your example of high priced Sydney. Now lets face it, not everyone wants to liv e near the Blue Mountains, or en route to Canberra or the Central Coast, but is someone going to increase supply in Sydney's East, or between Sydney and Strathfield, or between Sydney and Hornsby. No they are not, and that is not because they don't want to but because it's impossible. But what they can do is provide incentives to people in those area. For example encouraging single elderly's living alone in large houses they cannot upkeep or sometimes even afford to stay in, but who find the expense and complications in selling /buying / relocating unmanageable. That would require a policy change and (dare I say it) an effort in Macquarie St, and probably cancelling of stamp duty - at least for those people.
I can think of a dozen or so ideas of this nature but what is clear is that one regulation alone can't apply to all of them. Flexibility would be required. And part of that flexibility to take pressure of rapidly escalating rents in Sydney is to find ways for young and modest income working people / families into their own homes. Tax deductability for mortgage repayments is an excellent starting point for that. So I don't agree with your assessment of Gassins idea but I do accept that it would need to be 'tailored' to aim specifically at the target market. The main problem for me is that any discussion with policy makers in my (rather too long) experience is that mention of the word flexibility produces an instant meltdown. Furthermore, I have to say and I hope not to offend you because its not my intention, the single idea of increasing supply is one of those inflexible ideas that policy makers would love.
If you want to advocate the removal of NG for investors alone, frankly I would not instantly argue but I would firstly want to hear from genuine experts about the possible impact that would have on supply. You see where I am going here don't you. If removing NG for investors reduced supply, - well !!