Suse,

"individual, you are not understanding me.
Where, exactly, would rental homes come from if there were not these tax incentives to buy them?"

Here's what Saul Eslake posted earlier in the thread.

"To the points made by "suseonline" and "individual", if negatively-geared investors didn't buy dwellings, then those dwellings would be bought by people who are currently unable to compete with negatively-geared investors. The supply of rental housing might drop - but so would the demand for it, and by an equal amount. So what's the problem?"

Poirot quoted;
but so would the demand for it, and by an equal amount. So what's the problem?"

That is an assumption. I do not see that those not able to rent would
be able to raise the deposit. A few might, but the majority displaced
from the rental market, no.

Bazz,
You're confusing me, what is it you don't understand about "all business" ?
Forgive my ignorance in matters of money (I don't have enough) but should business be about one lot getting a better deal than the other or should it be what's commonly referred to a level playing field ?
I fail to comprehend how it would be possible to have both ? Why should investors get a better option than those who rent from them ? You have, I want, I pay & you supply. Isn't that what business should be ? Not you have, I want as much as I can of what you have with the support of NG.
If you're not smart or good enough to offer a fair deal than you should not have the right for other taxpayers to back you. Because backing you they do when you write things off the tax.
Is that what you don't understand or is it because you don't like it ? I dearly would love to get more but I can't get myself to rip taxpayers off as do so many. I pay for the fuel for my boat, my car, my electricity, my whatever AND I provide a service but I don't claim it all back because even if I wanted to I can't whilst I'm on wages. Why should people who provide a service under the guise of a business name be able to do it ? I think it's wrong & it's gradually bringing our society to it's economic knees.

I did miss your bit about all business.
That won't work, any business that wanted to expand its plant by
investing multiple millions of borrowed money into the new plant would
not be able to offset the interest on profit in the whole business
with your suggestion.

That would kill increased business and increased jobs as well.

However it is irrelevant as growth is needed to be able to repay
borrowings and interest and growth is ending.

That would kill increased business and increased jobs as well.
Bazz,
well, this is where we have to agree to disagree. It would slow down growth that is becoming unsustainable anyway but it would not kill jobs, on the contrary as people would have more to spend. Instead of growth we'd have a rolling economy nicely steadying itself. The greedy well, they'd get less & that's a good thing in anyone's book. Frivolous industries would certainly get a wake up call but this too would turn into a positive for society as a whole.
We are now at the doorstep where we're faced with thinking for either just ourselves & only ourselves or do we still have the humanity of looking after ourselves as a society. I know many aren't interested in the latter but that's where a flat tax, no NG & a non-military National Service would come in. Participate & pull your weight or go it alone. Disabled of course are given the special consideration they need. We can see that the system we've had until now is no longer working & is actually to our detriment now.

Indi

The ONLY reason jobss exist is because people, whether they be large or small, take risks.

Now, if you remove the safety net from those risks, they being tax deductions, then the risk takers will stop taking risks. It truly is that simple. Jobs are not a given, they are created. Even government jobs are only ever created from the taxed generated from the risk takers. (note I didn't say paid by)

As for the removal of NG leading to an increase in affordable housing, I just can't see it. For a small few perhaps, but not for the majority, because if someone can't afford a house at 4.5%, and a 5-10% deposit, the balance by way of mortage insurance, then they will never be able to afford one. Not to mention the 1st home owners grant, another stupidly executed policy.

If we remove investors from the market, sure, house prices may fall, let's assume by 20%. Not an unreasonable assumption by any means, especially given there would be far fewer buyers out there to compete.

So, your $400K home in now worth $320K. But, if this were to happen, the banks would get very nervous and, rather than lend to 80%, they would most likely only lend to 70%, which means, the deposit you needed at 80% of $400K ($80K) would now be $96K. Plus, very few mortage insurers would make up the increased gap,( an additional 10%) especially given the sharp decline in property values.

The other importance about investors is that they provide a safety net for the banks, as they are a back stop, as once the buyers are gone, (investors) those investors with money will have a field day and, there would be little doubt banks would be putting marginal owners under plenty of preasure to increase the equity in their devalued property. Otherwise it would be Australia's version of the US sub prime mortage, only here, individuals are liable for the debt.

Be very careful what you wish for, because there would be few winners, but plenty of losers if we remove NG.