rehctub,

"Poirot. I have communicated with Saul via email,however, once I put my case forward about where is the new land going to come from, he ceased communicating. I also invited him to participate in the relevant thread, but he obviously declined, just like everyone else did.

He may well be a respected economist, but it appears that not even he is willing to enter in to the debate."

Oh really?

What's this then?

http://forum.onlineopinion.com.au/thread.asp?discussion=6518&page=0#194134

"Rechtub", what I was saying on the ABC yesterday morning..."

and...

http://forum.onlineopinion.com.au/thread.asp?discussion=6518&page=0#194167

Two lengthy posts on your thread "An open letter to Mr Saul Eslake"

Here's your reply:

"Firstly, thanks Saul for participating, your input and knowledge is much appreciated and, if I misunderstood your statement to the ABC, I apologize."

So your tune has changed markedly. Why did you attempt to paint Saul in a bad light - especially since he did the honourable thing and took the time to engage you on OLO?

rehctub,

"Why on earth would one do such a stupid thing, unless the rent covers the costs of all shortfalls, meaning either one does not buy, or the tenant bets a big fat rent increase."

I dunno...

Here's an investment chappie explaining the "positives" of negative gearing:

"Negative gearing is the strategy of generating short- to medium-term tax losses – arising from tax-deductible costs that are higher than investment income – and leveraging this to increase exposure to potential gains and losses.

This strategy is popular because the tax losses that arise can usually reduce an investor’s other taxable income, resulting in a lower annual income tax bill. The savings generated can help to at least partially pay the investment’s way.

http://www.yourinvestmentpropertymag.com.au/property-tips/the-positives-of-negative-gearing-79707.aspx

"... is the strategy of generating short- to medium-term tax losses..." no less!

And this one's even better:

"How is losing money considered a wise investment strategy?

Buying an investment property is an important financial decision that is part of an overall strategy designed to meet both your shortand long-term goals. This strategy should be based on your current financial position and personal circumstances.

With this in mind, the main reason investors use negative gearing as a strategy is to reduce taxable income, while building wealth through potential capital growth. Put simply, if you make a loss on an investment property, you can claim a tax reduction on your income (known as a tax offset). You can then use the tax offset to lower your tax bracket, meaning you pay less tax.

Negative gearing is a particularly popular strategy with high-income earners who are looking for ways to build wealth and have the tax department help fund the investment...."

http://www.whichproperty.com.au/News-Articles/Negative_gearing_explained

Gee you will have to do better than that Poirot, that thread was about two or three years ago. Yet another diversion.

I have also sent a letter to my local member (well where my work is) Mr Wyatt Roy, he has replied, and another to Mr Bill Shorten, with no reply.

My communication with Mr Eslake was recent and although he did respond via email, he has not debated the serious issue to my knowledge, but I will check.

Now back to the serious question once again, where do you propose the new land will come from, to build the new houses, the only ones that will allow NG. It's not a hard question to ask, but a very hard one to answer if you are NG negative such as yourself.

Unless one can provide such an answer then one is simply caught up in the moment without a clue as to how this policy will effect investors, builders and their workers, retirees who want to cash in or renters wanting more houses to live in.

So many potential looses with such little gain, if any.

I say 'if any' simply because while the investor may write off the NG aspect of their expenses, at anywhere from 25 to 48 cents/$, the lenders pay company tax @ 30 cents/dollar on every single dollar they charge on the interest.

Of cause this is a whole new subject, and one that nobody has cottoned on to yet.

rehctub,

"Gee you will have to do better than that Poirot, that thread was about two or three years ago. Yet another diversion."

Jeepers...what was I thinking.

You start a thread in the General section titled: "An Open Letter to Mr Saul Eslake" in 2014. The man himself actually deigns to respond to you respectfully.

Now you see fit to write this derogatory line above, :

"He may well be a respected economist, but it appears that not even he is willing to enter in to the debate."

And then you opine that because it was some time ago it doesn't count.

Btw, it was August, 2014 - way less than two years ago.

Next you tell us he responded to your recent email - and you're still happy to bag him.

This top economist appears to have engaged you, a humble butcher, above and beyond what one could reasonably expect - and the best you can do is bitch about him to us.

Says more about you than it does about Saul.

A word of warning, opinion, as ever, between economists is changing.
More are realising that energy is the real problem with coal an
immediate problem and oil & gas less immediate.

Economists are now noticing that neither austerity nor stimulus are
doing what is expected.
The escalating cost of search & developing for new energy sources is
causing considerable concern in financial circles.
Deloitte has stated that between 30% and 60% of energy producers and
service companies world wide will become bankrupt this year or next.

The following well known companies are on the list;
Quote; In a prescient report published last November, Carbon Tracker
identified the energy majors with the greatest exposures—and thus
facing the greatest risks—from stranded assets: Royal Dutch Shell,
Pemex, Exxon Mobil, Peabody Energy, Coal India and Glencore.
unquote

ps by stranded assets they include those not economic not just inaccessible.

Peabody, the largest coal producer went bankrupt last month.
Peabody has mines in Australia. Presumably as a different company.

Nothing is predictable under previous rules, it is all changing.
And the pollies are arguing about negative gearing ? Oh dear !

"No one has any issue with being able to deduct business expenses....."

Hooray, a statement of belief we can work with. Now, where does that lead us?

Q1: Should any rental loss be able to be written off against income from paid work, or, should business loss only be able to written off against future earnings?

Q2: Should CGT at the investor's full marginal tax rate apply to nominal gain on rental housing, or, gain calculated after CPI indexation of the cost base of the asset?

Q3: Same as Q2 but with a 25% concession on the marginal tax rate thrown in per Labor policy.

The answers to these questions affect the entire investment outlook on housing for M&D's and corporates. The wrong answers will turn housing investment into a wasteland, if it's not already there in some cities.