Calls to curtail negative gearing need to be assessed in the context of the whole tax system, says Shane Oliver, chief economist at AMP Capital. He says negative gearing is not the reason housing affordability is poor in some parts of Australia, because it has been in place for a long time.

Removing or restricting the deductibility of interest expenses incurred in property investment will cause a distortion in the tax system because negative gearing would still be available on other investments, thus unfairly biasing investors in favour of shares over property.