Negative Gearing Gains Largely for the Wealthy, Despite SA Scare Campaign
Looking purely at the number of people who use negative gearing in South Australian electorates, rather than who makes the most money from the scheme, is an intentionally misleading way to analyse the impacts of potential changes to the policy, an independent think tank has said.
“New research from The Australia Institute has shown that nationally the top 20% of income earners get half of the financial benefit from negative gearing and that those over 40 years-old enjoy more than 70% of the income that results from the policy,” Noah Schultz-Byard, The Australia Institute’s South Australian Projects Manager said.
“It doesn’t matter whether people who own investment properties live in Labor or Liberal held seats. What matters is that the policy is locking young people out of the property market and increasing the gap between the rich and everybody else.
“South Australia, as a state, actually gets very little from negative gearing, with our research showing that the average deduction per investor in SA is the second lowest in the country.
“Having said that, Labor’s policy would see anyone who is currently engaged in negative gearing insulated from the changes and allowed to maintain that arrangement. It would also encourage the building of new houses, which could still be negatively geared.
“Saying that the 90,000 South Australians who currently use negative gearing would lose out due to the proposed policy change is incorrect.”
Key results from Australia Institute research into negative gearing;
- Those aged over 40 years old receive 71% of the benefit of negative gearing, while those 40 and under receive only 29% of the benefit
- The top 20% of income earners receive 49.8% of the benefit of negative gearing compared to the bottom 20% who only receive 6.2% of the benefit