Investing in fucking up the economy

Australian politicians do a great job of pretending to care about the cost of living, yet each year our government spends billions of dollars to make the cost of living more expensive.

Negative gearing is mind-blowingly stupid. It basically involves us paying rich people to make poor investments. In the 2010-11 financial year negatively geared investors lost $13.25 billion dollars. These losses were claimed as tax deductions. 

As well as costing us billions each year in forgone tax revenue, negative gearing has massively inflated the cost of housing. These inflated housing costs flow through the economy. To meet the basic need of having a roof over their heads, workers require higher wages, which means businesses have greater costs, consumers pay more and Australia becomes less and less internationally competitive.

If we still wish to throw money at property investors, we should at least limit negative gearing to landlords who purchase new properties. This would increase the supply of properties and mean first time buyers have a fairer go when bidding on the run down 1970’s apartments that are actually within their price range.

If we wish to provide incentives for investment, we should be far more thoughtful about where we direct the money. Rather than artificially propping up property prices we should be encouraging investors to put their money in areas which actually improve the country.

How about incentives for investing in science and innovation? Or incentives for investing in environmental projects? Oh wait, we have Abbott for prime minister. I blocked that out. Maybe we could just have incentives for investing in more toll roads.