Scrapping negative gearing will lead to wide scale death and destruction, and poverty on a scale never seen before. Mathew Kenneally knocks together a quick scare campaign for the nation’s most lucrative cult.
Raising taxes is hard. I accept it. But negative gearing? Really? How can anyone defend it? Not just defend it, a small group of Coalition MPs threatened to break ranks, and go public against the PM.
This was a point of principle. This tax break, unloved by classical economists and the left alike, somehow has friends in Parliament willing to die for it.
For these brave men, Tony Abbott’s “no more taxes” was not so much a slogan but a commandment.
Australian politics has a new cult, anti-taxers.
These men are the ultimate economic conservatives. Politicians opposed to any changes because when we do not know with 100 per cent certainty what will happen, we should ignore all evidence and do nothing.
Leaving negative gearing in place ensures certainty: house prices will rise and young people will be locked out of the housing market. Anger will increase, encouraging young people to work harder, driving productivity gains. Envy drives growth. Can our economy function without it? Do not take that chance.
Why are anti-taxers so bold? They know you allow one loophole to fall, no matter how egregious, the others will follow. The problem with running hysterical scare campaigns is if you’re proven wrong once, nobody will trust you again. You know, “first they came for negative gearing and I said nothing, then they came for superannuation and nobody trusted my scare campaign”.
Also, they know in a post-carbon tax world you can kill any tax. It just takes the right mix of confidence, misrepresentations, and a healthy disrespect for the public.
First, characterise the tax as a disaster to be feared. It will kill jobs. It is going to cripple individuals, and families, and the economy, which will cripple individuals and families. Run advertisements with nice looking families in nice (but not too nice) looking houses talking about how the fear of negative gearing means their children cannot sleep at night. Call it a great big tax a tax on everything. This is possible with any tax. If a butterfly on the other side of the world flapping its wings changes events in Australia, it’s not far-fetched to claim an increase in capital gains tax on investment properties will affect the price of a flat white and a pie.
Second, claim the horrible job killing tax won’t even raise any revenue. Scott Morrison used this attack on negative gearing – it will be a huge impost and it will raise no funds. Sounds like a contradiction. The solution: use a big number to describe the tax burden and a small sounding number for revenue. For example, this tax will be a multi-billion dollar drag on the economy, but will only reduce the budget by 1.7 per cent per year. Still a contradiction, but sounds good.
Third, monsters need victims, and taxes are monsters, road-building monsters. Those victims need to be sympathetic, like “mums and dad” investors. You can say this without lying, even the super-rich can be mums and dads. Clive Palmer is a dad and Gina Rinehardt is famous for her work as a mother. Most negative-gearers may be surgeons but surgeons still pro-create. ABC fact check cannot touch this one.
Fourth declare the tax UnAustralian. The victims need to be fair dinkum, proper Aussies. Find people impacted by the tax that wear hard hats, high vis, or akubras. Put them in ads, emphasise their accents. Convince the public that the Government is planning to tax being Australian. It’s as offensive as a tax on casual racism, the Great Barrier Reef, or beer. What? I’ve just been told Australia taxes beer, a lot. We should do something about that.
Fifth, present alternatives. Not a real alternative, just a line for Barry Cassidy. You know “savings”, cuts to the arts and foreign aid. Suggest we tax foreign multinational corporations who are neither Australian, people, nor mums and dads. It just needs to be credible enough to allow the public to sleep at night – with longer work days and horrible commutes this is a low bar.
Five steps to kill any tax. Seems to work, negative gearing, capital gains tax, and tax-free superannuation appear safe.
If Coalition MP’s continue to roll out this simple plan, the budget deficit will be just fine.