onthebeach, whole Latham's criticism of the ALP was uncharacteristically right, your adding negative gearing reform to the list is utterly ridiculous. Labor should, as Latham said, be concentrating on economic issues. And the plan to restrict negative gearing has resulted in the Libs running round like headless chickens.

Aidan, "Latham's criticism of the ALP was uncharacteristically right"

No, Mark Latham is usually very well targeted. He doesn't mince words criticising the cant and hypocrisy that is the genuflecting to political correctness and on both sides of politics, although his passion and life blood is Labor.

Anyone who favours Left and Labour* policies are NOT being well served by the Fabian 'Progressives' who run Labor. Mark Latham is not even being a Devil's Advocate, he is remaining true to the labour and Left movements. I might not agree with all of his policies, but he is one of the very few staunch, conservative Labour leaders -as in what Labour has always been about and keeping the faith of the rank and file.

* The traditional not the idiotic PC spelling, that patronising elitists like Gough Whitlam don't believe that traditional Labor rank and file can spell.

Aidan, "And the plan to restrict negative gearing has resulted in the Libs running round like headless chickens"

That is all it is about too and it is the very point I was making. It is just more cynical shyte-stirring by Shorten and his lazy shadow ministers.

It is NOT about providing welfare or low-cost housing. It is NOT about supporting and improving the rental industry. It is about managing cheap, misleading headlines that run a very serious risk of destabilising the housing sector, long-term.

Shorten should be tarred and feathered and run out of Canberra on a rail for that. He would be too, were it not for the fact that the tabloids would run anything as a lead to get low-cost sensationalist headlines and an audience.

Onthebeach: Landlords who buy older and more expensive houses as investment, often have to put on the overalls and get their hands dirty and drive older vehicles.

Most new houses, even the cheaper ones, come with a minimum twenty year structural guarantee, and will have had some treatment to limit/prevent the opportunity for termite infestation.

A landlord in overalls is hardly a savvy investor, just a dumb rube sold a lemon by a realtor, often the only ones making real money from the sale of residential real estate?

Or someone devoid of morals and just trying to cram as many folks as is possible into a ruin with a roof?

Buy a doer upper with good bones by all means, but something you live in for long enough to avoid capital gains tax.

And then reap your reward from the sale of a refurbished residence/residences!

Smart money will invest in new structures, where the repairs and refurbishment will be somewhere in the distant future, and done when rents will have risen substantially?

The only folks with something to lose due to these changes are the money men and realtors, little wonder they and affected realtors are the ones screaming the loudest, in pain and anguish?

And indeed, mounting the mother of all misinformation campaigns?
Rhrosty.

In more than 50 years of studying the property market I have not encountered many rapacious landlords. I have however encountered many misguided legislators, Consellors and Councillors.

I have not met many people who have become millionaires through negative gearing but a number who became bankrupt through gearing.

The millionaires I did meet either made money by capital gain or by insider knowledge.

Labor's proposals show a great knowledge of gambling but not much about investment.

Ross, the problem as I see it goes back to the fact that the majority of our politicians are chosen from those who the corporate world rejected, so we end up with who we end up with.
The problem with this situation is that while some pollies may have some worthwhile ideas, the reality is they all too often fall short of the mark and are open to manipulation, usually by smarter rats. The failed insulation scheme, the first home buyers grant and the subsidy for rain water tanks are two such cases where the idea had merit, but the execution was a disaster. I mean, once a rain water tank is full, the owner has no obligation to use it, whereas something as simple as making the subsidy subject to having it plumbed would have solved this. As it stands, thousands of these catch no water because while the owner has been rewarded for buying it, they choose now not to use it.

The stimulus was another example where billions was pissed away, where a simple debit card, with a use it or loose it clause would have been much better for our stimulus.

As for the insulation, the 'cow boys' who often ran this scheme were only doing what they were able to do. Whereas the first home buyers grant should never have been a grant, it should have always been a loan, say interest free for ten years, provided you didn't use the equity in the home. At least then we could have used most of this money over and over again.

Negative Gearing.
While I am a user of NG myself, I have long said that using this tax payer funded gift to accumulate wealth should never have been allowed to be abused as it has, and a simple 'Return to Profit' test could fix all that.

Governments are simply not clever enough when it comes to planning.

Rhosty,

Your post reeks of dis-ingenuity and bad calculations.

I would strongly suggest that you read:

http://www.theaustralian.com.au/opinion/columnists/henry-ergas/labor-must-stop-denying-negative-gearing-truth/news-story/139f92a95957b02f8d7b1018d39e93ac

Firstly no prospective landlord would be able to buy a property for $500k, and if he did he would get considerably less than $500 p.w. Then on top of this he would pay land tax and services. The reality is that for rent to just cover costs and interest, the mortgage needs to be less than 50% of the property's value.

Similarly the market reaction would be similar to 1986 when labor removed negative gearing last time, and rapidly reinstated it when rents shot up. Effectively the elimination of NG is a tax on rental properties that is paid for by the tenants.