Friday, May 08, 2015
The truth about negative gearing (?)
A bit of superficial cleverness below from the Farr-out one. I am guessing that he has no qualifications in economics. He uses the brief previous period of suspended negative gearing to make pronouncements for all time. The ancient economic truth that raising the price of something will reduce demand for it is not for him. He cannot see that making investment in rental accomodation dearer will reduce investment in rental accommodation.
He is supposed to be a political reporter but he naively swallows the deception you can expect from the Leftist ABC. The fact that rentals rose only in Sydney and Melbourne last time refutes nothing. It probably shows that the supply of rental accommodation was tighter there so the effects showed up there more rapidly. Economic changes commonly take a while to work their way through the system and two years was not long enough to see the effect in other Australian cities
IT’S the tax concession governments dare not touch even though there could be savings currently estimated at $12 billion a year if it were it scrapped.
And again this year, negative gearing — the claiming of costs related to investment properties as tax deductions — has escaped the Budget axe.
Prime Minister Tony Abbott has said it won’t be touched: “The government I lead wants taxes to be lower, simpler, fairer,” said the Prime Minister.
And his government is not about to upset some 1.2 million Australians who use the tax rebate to cover expenses of investment properties, such as mortgage payments and repairs.
There are two issues at the core of this debate:
WHO NEGATIVELY GEARS?
The common view is that only the rich can buy a rental property so only the well-off benefit from negative gearing. So eliminating the concession has been depicted as a measure of fiscal equality.
“The reality is that over half of geared housing investors are in the top 10 per cent of personal taxpayers and 30 per cent earn more than $500,000,” said Dr Cassandra Goldie of the welfare sector body ACOSS.
Well, that used to be the common view. It’s now a crowded debate.
“There is an urban myth running around that negative gearing is the province of the rich and should be for the high jump,” said Social Services Minister Scott Morrison recently.
Sometimes the same set of figures have been used to make competing arguments.
Research by the Australia Institute think tank found a third of the rebates from negative gearing went to richest 10 per cent of households. More than half went to the wealthiest 20 per cent.
But another reading of the same data found more than a million people were negatively gearing, and, said a report in The Australian, “the widespread use of the tax losses in areas once considered ‘blue collar’ Labor territory in suburban Brisbane, Melbourne and Sydney”.
Scott Morrison used a Property Council analysis of Tax Office data. He said it showed negative gearers included 83,000 clerical workers, 62,000 teachers and child carers, and 12,000 emergency service workers “who aren’t the rich and famous”.
Negative gearing is often blamed by first home buyers who can’t crack into the property m
Negative gearing is often blamed by first home buyers who can’t crack into the property market. Source: ThinkStock
Certainly the well-off are better placed to buy property and use the concessions, but the Australian obsession with property means second-home ownership is no longer a province of the rich.
WOULD RENTS RISE?
This is the big obstacle faced by the anti-neg gearing side: The notion that eliminating the concession would halt investment in rental properties and push up rents.
“If you abolish negative gearing on investment properties, there’s a strong argument that rents would increase,” warned Treasurer Joe Hockey.
The tax concession has been dumped only once, by Labor between 1985-1987, and, Mr Hockey said, “The net result was you saw a surge in rents.”
Well, rents did rise but only in Sydney and Perth. The ABC fact checking unit has taken exception to Mr Hockey’s reading of history.
“During the period that negative gearing was abolished real rents notably increased only in Sydney and Perth — where rental vacancies were at extremely low levels,” said the fact checking verdict.
“This is inconsistent with arguments that negative gearing was a significant factor, with negative gearing likely to have a uniform impact on rents in all capital cities.
“At the same time, high interest rates and the share market boom of the mid 1980s increased consumer demand for rental properties, encouraged existing investors to pass on high mortgage costs to renting consumers, and discouraged additional investors from investing in the rental property market.
“While the rent increases in two cities did coincide with the temporary removal of negative gearing tax deductions, it is unlikely that change had a substantial impact on rents in any major capital city in Australia. “Mr Hockey’s claim doesn’t stack up.”
Smearing Tony Abbott as a homophobe is victory for hatred
Given Tony Abbott has been dubbed a misogynist, Islamophobe and racist, I suppose the -occasional allegation of homophobia shouldn't be a surprise.
But having met Abbott through a mutual, and dear, gay friend more than 20 years ago, it has -always bemused me. Each time it is attempted, the slur is revealed as increasingly absurd and desperate.
Christopher Pearson, a former columnist for this newspaper, was my openly gay editor at The Adelaide Review in the 1990s when he developed a friendship with -Abbott through an organisation that was anathema to me, Australians for Constitutional Monarchy. Pearson, from the start, said Abbott was going places and -invited the backbencher to launch a magazine issue, insisting I attend.
In those days Pearson was an "out and proud" bon vivant who, famously (or infamously), had been in a long-term relationship with the chief justice, was active in the gay liberation movement and -was ensconced as a gadfly on the Adelaide arts scene.
Prodding what he saw as my suburban, family man naivety, Pearson often tried to shock me with revelations about what he called his "tragic deviant" lifestyle.
He was the same with others.
He also challenged me intellectually and introduced me to a wonderful array of music, literature, ideas and people. He often told me he loved me. And I know he was the same with others. He became very close to Abbott, as a trusted friend, political confidante and editor of books and speeches. Back in 2010, when the then opposition leader spoke of being "threatened" by homosex-uality, Abbott suffered a sustained media attack over alleged homophobia.
It seemed a high price to pay for poor expression and sometime after that Pearson told me how Abbott was supporting his sister, Christine Forster, in what was then a private family matter of a broken marriage and lesbian relationship. (This has since been -spoken about publicly by Forster and Abbott.)
Pearson was tempted to make these matters public at the time to kill off the political jibes but wisely thought better of it - respecting Abbott's understandable priority on family and friendships.
Pearson, to the surprise of most of us, abandoned the Anglican Church, converted to Catholicism and espoused his own version of radical celibacy. He didn't live to see Abbott -become prime minister, dying -almost two years ago.
Abbott was a pallbearer and, just two months shy of winning the election, he led an eclectic group of mourners at the Victory Hotel at Sellicks Hill in Adelaide, as Labor and Liberal MPs, journalists, Latin mass Catholics and writers of gay, straight and varied dispositions warmed themselves with wine, poems and jokes after a wintry burial. No one there could have doubted the bond - let's call it love - between these men. Since then we have read of Abbott's -relationships with his sister, Christine, and transgender mate Catherine McGregor.
In the midst of the election campaign, on a whistlestop Adelaide visit, Abbott found time to honour a commitment to Pearson, looking in on his elderly father.
These are mere snippets, and it seems sad to feel the need to air them, but whatever people's gripes with his politics or his policies, -attempts to smear Abbott as -homophobic can only be a triumph of hatred over humanity.
Greens leader Christine Milne leaves behind a team in turmoil
FORMER GP Richard Di Natale was elected unopposed as the new leader of the Greens on Wednesday - but don't be fooled. The obscure senator won thanks to a secret plot that will actually leave the party even more divided.
That plot - and that division - is part of the troubled legacy of Christine Milne, who quit on Wednesday as leader after only three years.
Forget the media praise for Milne, whose resignation surprised even party founder Bob Brown. She actually cemented the Greens' reputation as zealots incapable of compromise, blind to the terrible price of their pure politics.
Milne refused to use her party's huge power over the Gillard Labor government to change the border policies that lured 1200 boat people to their deaths.
She helped to extract from the Gillard government a $10 billion clean energy fund that won't actually change the world's temperature.
Since the Abbott Government's election, Milne also helped Labor to block spending cuts in the Senate, claiming "we won't have a bar of the nonsense around the whole Budget repair story", despite government now spending nearly $1 billion a week more than it collects.
With Milne it was all about seeming, not achieving.
She became so obsessed with the alleged wickedness of Prime Minister Tony Abbott that she even helped the Senate to block the Government's planned rise in the petrol excise levy, even though Greens' policy calls for taxes on fossil fuels. The result: Milne's Greens appealed to a permanent minority of Australians who get high on moral outrage - but they frightened off the rest.
Indeed, Milne was hammered in her one election as leader, in 2013. The Greens' Senate vote fell from 13.1 per cent to only 8.65, with just four senators added to the six elected in 2010. In the Lower House the Greens only retained Adam Bandt's seat of Melbourne.
The polls suggest some recovery since, but nothing in Milne's leadership showed the party would go anywhere fast, despite the unwavering support of the ABC and many academics.
Now it is up to Di Natale to find a way out of Milne's dead end. He has advantages. He's more reassuring and more pragmatic than Milne. "I am not an ideologue," he insisted on Wednesday. "I follow the evidence."
He even hinted he would change Milne's irrational opposition to the petrol excise increase and broaden the Greens' appeal. He said his interests weren't just global warming and the environment, but Medicare, healthcare, multiculturalism and "social justice".
But can he bring his team with him?
Di Natale's first problem is his low profile. Half the Greens MPs are better known.
In fact, the ambitious Bandt is the party's best media performer, yet was on Wednesday humiliatingly replaced as deputy leader by Scott Ludlam and Larissa Waters.
Bandt later implied he'd just wanted to prepare for the arrival of his baby, but he seems instead to have been knifed.
Milne refused to comment on claims by angry Bandt supporters that she'd given Di Natale and Ludlam advanced warning of her resignation so they had time to stitch up a leadership deal that froze out the unsuspecting Bandt.
Di Natale also wouldn't comment, yet gave the game away when a journalist asked if he'd discussed standing for leader with his family. "I had a long chat with my partner, Lucy, and the impact it is going to have on my life," he blurted, before realising his mistake and adding: "I was talking to Lucy six months ago."
He then admitted "someone may have been disappointed by the outcome" before Milne hastily terminated their press conference.
His deal with Ludlam may have given Di Natale the leadership, but it's also created a powerful rival and brake. Ludlam in return wasn't just made co-deputy but chairman of the parliamentary party.
Nor do the divisions end there. Milne and Brown long fought to contain the rise of "watermelon greens" - Greens MPs who are actually socialists.
The ultimate watermelon is Lee Rhiannon, a former communist trained in the Soviet Union who backs a boycott of Israel and fights to protect the CFMEU, a construction union accused of corruption by the royal commission into trade unions.
Sure enough, Rhiannon on Wednesday tweeted her objection to the way Di Natale was chosen. "Members should have a vote," she protested, knowing a ballot of members would favour radical candidates like her.
Does this seem a happy team of big huggers - one able to negotiate out of Milne's cul de sac and deliver Kumbayah at last?
Your regulators will protect you -- NOT
Paedophile doctor in NSW 'practiced for decades'
The head of the state's health care watch dog told a royal commission its investigation into allegations about paedophile doctor John Rolleston was "indefensible". Health Care Complaints Commission boss Kieran Pehm? said the agency was beset by lengthy delays and poor information sharing at the time sex abuse claims about Rolleston were first received in the late 1990s.
In evidence before the Royal Commission into Institutional Responses to Child Sexual Abuse, Mr Pehm admitted allegations about Rolleston were not investigated thoroughly and complainants were treated poorly. "It's bad. It's indefensible," he said.
He told the royal commission that when he started at the HCCC in 2004 delays of two or three years were not uncommon and recalled there were 700-800 unallocated files piled up in a corner office.
The commission heard when a sex abuse survivor, known as AWC, complained about Rolleston to the HCCC in 1998 it took almost a year for an investigation to commence.
Justice Peter McClellan?, who is presiding over the public hearing into health care providers and regulators, expressed surprise that Rolleston's failure to respond to HCCC investigators was provided as one reason for terminating the inquiry.
"If you have a complaint but you haven't had a response from the person complained about, that that is a reason to discontinue an investigation? It defies belief," he said.
"I agree," Mr Pehm replied.
The commission was told the historic nature of AWC's complaint was another reason for ending the inquiry in 2001, despite the fact Rolleston was still practicing as a doctor.
When the HCCC received a fresh complaint about child sexual abuse involving Rolleston from another man in 2003 it failed to connect the new claim to AWC's case.
Mr Pehm blamed "poor information systems" at the time.
He agreed the response to Rolleston's victims was "completely inadequate" but said the HCCC had improved the time frames for investigations and simplified the process for complainants.
Rolleston was arrested in July 2009 and convicted of more than 30 sexual offences relating to adolescent patients he abused at his practices in St Ives, Whalan and at the Royal North Shore Hospital.
In earlier evidence, a senior medical practitioner who was molested by Rolleston as a child said he was stunned to learn his abuser was still allowed to practice while being investigated over sex offences.
The man, known as AWF, told the commission it was "incomprehensible" that health care regulators allowed Rolleston to continue to work as a doctor after allegations first surfaced.
The evidence before the commission is that Rolleston, who was imprisoned in 2011, was not de-registered until 2013.
"It seems to me that Rolleston could theoretically re-apply for re-registration as a medical practitioner after four years, which is in May 2017, which I find troubling," he said.
AWC, who was molested by Rolleston at Royal North Shore Hospital in 1979, told the commission that that the HCCC was "completely ineffectual" in examining his report.
Mr Pehm is expected to continue to give evidence on Friday.