The economy isn't just made of the house-owning minority.
The economy isn't just made of the house-owning minority.

Why economists want to see the end of negative gearing

THE McKell Institute has released a new report on negative gearing, arguing the recent fall in house prices has done nothing to change the economic rationale for reforming the policy to apply to new properties only.

In fact, the Institute says reform is "even more urgent" now than it was in 2015, when it released its previous report on the subject.

That contradicts the government's assertions that Labor's proposed negative gearing changes will have a severely negative impact on the market.

There are five key findings in the report:

The economic rationale "remains unchanged despite recent developments in the housing market";

The recent drop in median house prices reflects "the centrality of variables other than negative gearing in dictating prices";

Property prices are still growing faster than wages;

Housing affordability has worsened "on most indicators" since the 2015 report;

Banks have raised their interest rates since 2015, increasing the government's tax expenditures on negative gearing by $1.6 billion.

All of that adds up to an argument supporting the restriction of negative gearing.

You can read the whole report here.

News Corp Australia

Increased fire danger across the Central and North Burnett

Premium Content Increased fire danger across the Central and North Burnett

The QFES area director for the Burnett has warned of increased fire risk across the...

Burnett mum calls principal ‘f--king bitch’, police called

Premium Content Burnett mum calls principal ‘f--king bitch’, police called

A South Burnett mum has been placed on a good behaviour bond after lashing out at a...

Police on hunt for three after Kingaroy bottle shop break in

Premium Content Police on hunt for three after Kingaroy bottle shop break in

Have you seen these men? Police are seeking public assistance with two break and...