Why Negative Gearing Won’t Get Repealed
Something that is not exactly on people’s minds is just what kind of assets our politicians own, and how that might influence how they vote. Turns out only 13 of the 226 MPs in the Federal parliament do not own properties. Of those who do own property, many of them own multiple properties and the best way to describe it is that it is their favorite investment vehicle. This would likely be because of negative gearing, which is a wonderful thing if you have investment properties but is one of those policies which is contributing to the property bubble in Australia – yes, the one everybody has a vested interest in denying and of course we’re starting to see why.
The article goes on to tell you how deeply invested our federal MPs are in the property market and so draws the conclusion that they are such beneficiaries of negative gearing that they are highly unlikely to vote for an end to negative gearing. one would imagine that there would be a corresponding number of people invested in property working for the Treasury and the Reserve Bank. Add in the banking bosses who are also likely to be in the same boat and you have picture of people who like having high prices and would like to keep the prices high and not have to cash it in.
It’s funny because in the American ‘House of Cards’ Kevin Spacey’s Frank Underwood tells us that a man who chooses money over power is a man who chooses a flimsy MacMansion over a solid house built of stone and made to last. It appears that in Australia the sole purpose of power is to gain more wealth. It’s hardly exciting that real life pollies in Australia think with about as much imagination as your local slum lord, but evidently that is what we have got going. Our politicians favour real estate as an investment vehicle over equities or bonds, venture capital projects or for that matter manufacturing and services. If you combine it with the fact that figures such as Clive Palmer are heavily invested in mining, there is a prosaic materialist tenor to all of this that bodes ill for culture and the arts as well as science and technology.
It’s pretty hopeless. Especially when you consider that the point of capitalism is to bring capital to bear to produce things. Producing houses is one thing, but that’s not what they’re doing. They’re literally rent-seeking on their investment properties while minimising their tax obligations. Does that sound like the sort of group of people who might have a view to the future industries of this country?