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The Forum > Article Comments > Supply is code for windfall gains > Comments

Supply is code for windfall gains : Comments

By Karl Fitzgerald, published 30/8/2013

The bureaucrats' golden pen tick from farming to residential re-zoning creates overnight millionaires for those who own land in the right location.

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We are the only nation on earth with negative gearing!
It costs the tax payer around 5 billions per.
Instead of negative gearing, we need to inculcate a mindset of positive gearing, that is no longer dependent on the taxpayer or the budget bottom line!
Look, one can buy investment houses in mining districts, for zero dollars down, and tenants that pay enough to manage the mortgage, the rates, management fee and a guaranteed return to the owner of around $67.00 a week?
While these houses might be "worth" $400,000.00 today, capital gains could jack the price up by around 400%, when the mortgage is fully paid off!
Moreover, this a capital gains component, remains largely untaxed?
If there was a indexed for inflation, capital gains tax component, that basically wiped out the unearned income, these money for nothing schemes would be less desirable!
All these schemes make housing for the average mug voter, less and less affordable!
Rents are now so high that the cost of a bedsitter, in places like Sydney, are now higher than the pension.
It really is unacceptable that somebody's mum or dad, having worked, struggled and strived all their lives, has to face the twilight of their years, as charity dependent homeless oldies.
Perhaps if some of these alluded to investors, had to spend a year or two, walking in those very shoes, they might see the value of actually earning their own money, from the honest sweat of their own brows, rather than that of blood sucking parasites!
[And then we wonder why there is this enormous infrastructure shortfall in this country!]
And no, I don't include Soldier settlers in that description, given they more than anyone, have earned what they eventually end up with!
Rhrosty.
Posted by Rhrosty, Sunday, 1 September 2013 10:53:41 AM
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Rhrosty, sometimes you do cut & post rubbish.

If I borrow money for any business, be it for machinery, premises, stock, consumables, or even to pay the wages, the interest on those borrowings are tax deductible.

I can borrow to buy shares, & the interest is tax deductible.

Borrowing to fund a premises to rent, industrial or domestic is no different to any other investment, & should be treated the same way.

In fact, with domestic rental being such a lousy investment today, the government should perhaps be offering free psychoanalysis to those fool enough to do it.

This doesn't apply in the US, where rents are high enough to pay off a house bought on minimum deposit, with a little return to the investor as well. As they are generating a profit, the profits are taxable, as will profits on Oz rentals, once income exceeds outgoings.
Posted by Hasbeen, Sunday, 1 September 2013 11:27:33 AM
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Karl,
Design the issue out,we designed it in.

No more wishful thinking and lies.

Great to read your article !

It only takes 10-15 minutes every 3 years ,to use the preferential system and number on the Senate ballot paper the 110 candidates below the line .
Not a big ask compared to having half one's face or testicles blown-off in Afghanistan.

By doing this , you can send the only message to the major parties, that they respect .

Every major problem we face from housing, university funding, child neglect, jails, environment, manufacturing collapse, casualization of the workforce, selling public assets, massive public/private borrowings, traffic chaos, growing poverty, social security blow-outs.....(.very happy to dialogue the back stories on all this)...is made catastrophically worse by one design blunder..................POPULATION GROWTH .

By preferencing the Stable Population Party first, then your major party second ( after that, just do the numbering because it won't matter ), we have a chance to turn the place around.

The positive message is that we have designed the mess in, so we can design it out .

Very best Karl ,

Ralph
Posted by Ralph Bennett, Monday, 2 September 2013 8:36:08 PM
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Hi Ralph

Population growth might be an issue, especially with Australia's high growth rate. But until there is accepted data like infrastructure cost per capita, the claimed effects can only be speculated. What is less in doubt is the huge increases in the controls and restrictions upon landowners to develop property. It may be the case that the resulting restriction of supply is far more significant with respect to housing costs.
Posted by Fester, Tuesday, 3 September 2013 7:20:54 PM
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This headline "Supply is code for windfall gains" is misleading and not in the public interest and only suits those who game the housing market without building anything but profits off the back of supply constraints. A fools paradise indeed..
Posted by Dallas, Wednesday, 4 September 2013 10:30:34 PM
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