There is a way around your dilema. First I would not take out a personal loan to purchase speculative, non dividend paying stocks - too risky from an investment angle and too grey from the tax angle. Below is a safer strategy that involves a combination of a personal loan and a Margin Loan. But first a note on Margin Lending.
A margin loan by definition is a loan secured by a "Blue Chip" share portfolio. You borrow money against the value of your holdings. You can't just say "I want to buy some spec stocks with borrowed money" and expect a bank to give you a Margin Loan. They wont. You have to come forward with some security first (Blue Chip shares or cash). Once you have done that you can borrow money against those shares and buy whatever you like (blue chips, specs, warrants, property, even a Holiday or a car). However, the interest is only tax deductible if you use the funds for investment. To guarantee the interest is deductible for all types of shares, set yourself up as "trader" rather than an "investor". This is quite straight forward. (see ATO Fact Sheet http://www.ato.gov.au/businesses/content.asp?doc=/content/21749.htm )
So gather up your Blue Chips or if you have some cash, buy some Blue Chips or Managed Funds (a couple of high yielding property trusts would help) then use these as collateral for a Margin Loan. If you don't have any shares or free cash then borrow some. Take out a home equity loan or if you don't have a mortgage, then take out a personal loan or Overdraft. Now use this money to buy a Managed Fund or Top 50 Blue Chips only (no specs). This interest will then definitely be tax deductible whether you are a trader or investor. Collect the dividends to help pay the interest. Now lodge these holdings as security and take out a Margin Loan. Now buy your spec stocks by drawing down the Margin Loan. Forget about the Interest on the Margin Loan and instead concentrate on making money by trading. Ultimately you want to end up paying Tax rather than tying yourself in knots trying to get a Tax deduction. Make the money first, then sort out the Tax once you're successful enough to have actually created a tax problem!!
This strategy gets you into the market with Blue Chips using borrowed tax deductible money (Home equity loan or personal loan). It establishes the security for a Margin Loan which can then be used to buy more Blue Chips (tax deductible) or spec stocks (only tax deductible if operating as a trader). Remember, in any case you only pay interest on the Margin Loan when you actually make a drawdown. Often times you have no drawdown as you wait for a trading opportunity to present itself. Buying a spec stock for a short term trade will attract very little interest cost so don't worry about it. Your main deduction will be the personal loan for the Blue Chips. Concentrate instead on making a profitable trade. Once you are paying Tax on share profits rather than claiming deductions on interest you will know you have succeeded.
Oh, and regarding vacant land I once heard a story that someone had a vacant block, and to ensure it produced some income they would let the land out to horse owners or dog owners for a nominal fee, hence guaranteeing the tax deduction. There is always a way around these things.
