Former Prime Minister John Howard has reminded the electorate that negative gearing was removed in 1985 – and reinstated in 1987 because of the problems caused by its elimination.
Speaking at a First National Real Estate convention, Howard lamented that the ongoing debate about negative gearing policy – in the lead-up to the Federal Election – was not giving enough airtime to its removal in 1985.
“When negative gearing was removed by then Treasurer Paul Keating in 1985, it was quietly brought back in the 1987 Budget,” he said. “The debate needs to focus on that piece of field evidence because the experiment with removing negative gearing was widely regarded as a failure. That’s more important than glossy economists’ reports.”
Howard said the high cost of housing largely results from supply-demand issues, the product of poor planning and decisions by State Governments and local councils, rather than the taxation system.
“Overall, the negative gearing debate is a triviality in terms of the real issues influencing housing affordability and home ownership,” Howard said.