Indi, that's completely different, as goods are changing hands and in most cases the tax is depleting each time.

Taxing the money is far more profitable for the tax collectors. Governments.

We could look at a flat tax of say 2% on every dollar spent and another 0.5% on the financial transaction.

phooey, you say Its amazing they sold it to us by saying it will force the rich to pay their share, when really the opposite is the case.

So how do you work that out.

If a low income earner buys say a fridge, for say $600, they pay $60 GST.

Many well off will pay up to $7000 for a fridge a d pay $700 GST, and so on.

Someone summed it up pretty well when they said that business claims their tools/items for work as a tax deduction, which is exactly what PAYG tax payers do with their tools/items. That's why they receive a tax refund, which by the way, businesses don't, although it is finally on the table.

There truly is no difference, other than the fact that companies are simply claiming their work related expenses prior to paying tax, rather than claiming it back.

If, by chance this was to change, we simply couldn't afford to live.

Now here's a question for all this who oppose negative gearing.

Many renters will always be renters and have no intentions of buying.

So, where will they live if investors stop investing in houses, which they will if the loose the tax incentives.

The only way they will continue to invest here is if they have posetively geared properties.

Given that most rentals return a net of around 3%, that would mean either rents would have to near double, or, house prices would need to completely crash, which can't really happen.

So you tell me whether we should get rid of NG?

"Many renters will always be renters and have no intentions of buying." may be true under current conditions not true renters would have no place to live, if rent were decreased (due to reduction in house price) would give tenants more buying power, many could now afford to buy their own home (sooner) thus decreasing the total number of people requiring rental properties in turn.

As for fridges example, this is a fair point. If that fridge is purchased for a rental property or intending it for personal use after claiming a deduction on income tax and GST, a well known and widely used scam. Or sold to trade up to a more expensive fridge, GST is "refunded" to some degree as the cost of new fridges is inflated and thus the sale price of their fridge. The poor have no such luxury, they will use the fridge until it dies and take it to the dump (which incidentally they now have to pay significantly for where well off people can offload desirable luxury goods offered for "free" by the side of the road). Conisder cars instead of fridges and it is a little clearer.

GST in principal is reasonable, but only on true luxury items and not items people in the lower half are likely to need as necessities.

Indi, if NG was abolished, I would suggest rents would actually increase, as there would be fewer rental properties available, as investors woud invest their money elsewhere.

Now while house prices may fall, they would still not be affordable to many, as the banks would tighten up lending, as they would know that if they had to on sell the houses, the buyers, many of whom are investors, would simply not be there any more.

Of cause, this wouldn't happen over night, as there would be a transition period, followed by a huge rental shortage and the building industry, along with industries it feeds, would all but collapse.

There is much more at stake if you remove NG than just a tax break.