The land release is surely contributing to the problem, a problem that negative gearing isn't solving. So if it's not addressing the core problem, it's hard to see the value in it - but more specifically it seems a real stretch that it would be catastrophic to remove it.
I don't blame negative gearing for the prices going up, but I can see it might in fact do more harm than good if it encourages excess speculation on the existing stock, instead of expanding supply (because supply expansion is being restricted by other factors, resulting in the demand chasing existing stock instead). Increased demand chasing the same pool of stock can only have one outcome, and it's not lower rental prices.
