Frydenberg: “[Treasury] said that Labor’s policy could put downward pressure on housing prices, and also that it could create real problems in a cyclical downturn in the housing market.
“The Labor Party’s policy is designed — in the words of Chris Bowen himself — ‘to put downward pressure on prices'”.
Modelling from the Property Investment Professionals of Australia (PIPA) has reported that by limiting negative gearing and reducing the CGT discount, the government would lose $32 billion in revenue over 10 years.
PIPA’s found that Labor’s assertion that their policy would save $32 billion over a decade was a ‘flight of fancy’, claiming that the reverse would be true if investors are driven out of the market.
Comment: Not even Wayne Swan, whose deficits averaged around $40b per annum, could get it so wrong on just ONE POLICY.
PIPA added that fewer investment properties would drive rents higher and further hinder first home buyers from entering the market.
The modelling also found that:
- If investment activity reduced by 15 per cent, there would be 390,000 fewer properties available for rent, with the total loss of capital gains tax revenue to government being $31.6 billion over 10 years.
Source: Mortgage Business
In 1976, Carlo M. Cipolla, professor of economic history at UC Berkeley, published an essay outlining the fundamental laws of Stupidity:
Stupid people, Cipolla explained, share several identifying traits:
- they are abundant,
- they are irrational, and
- they cause problems for others without apparent benefit to themselves
…thereby lowering society’s total well-being. There are no defenses against stupidity, argued Cipolla. The only way a society can avoid being crushed by the burden of its idiots is if the non-stupid work even harder to offset the losses of their stupid brethren.
Source: Quartz