Wednesday, August 13th ....

Jack Lang, the controversial Premier of NSW in the 1930s, apparently advised Paul Keating: always bet on the horse called Self Interest; at least you can be sure it's trying.  When you look at the current crop of politicians you can see the truth of that statement. Obeid, Sinodinos, and the sad gang of NSW  members who have been found bending the rules, certainly put their own self-interest before the welfare of their constituents.  How can Kevin Rudd justify spending over $500000 in overseas travel in less than three months and how can our current Prime Minister hold his head up in regard to his numerous claims for attending Ironman events?  And how can his office administration expenses add up to over $200000 pa?

Poor old Peter Slipper gets his career and life ruined over rorted  taxi rides around wineries while Barnaby Joyce and George Brandis are allowed to pay back expenses claimed for attending a mate's wedding.  You could write a book!

So, when I read this week that Saul Eslake was encouraging the government to look at negative gearing as a potential area for tax reform, I wondered how we could overcome the self interest issue.  Australia is one of only a few developed nations which allow negative gearing, which Saul Eslake says is a waste of money.  Investors claimed $13.2 billion in losses in 2010-11, and that amount is rising.  Apart from the enormous amount of lost tax revenue, there is evidence that negative gearing reduces housing affordability.  Cashed-up investors compete with first-home buyers for available homes and prices rise accordingly.

Stopping investors from negatively-gearing property losses against their income would add $4 billion dollars a year to the budget in the short term, and about $2 billion dollars a year in the long term. 

It's a no-brainer, right?

Sadly, members of parliament are among the most enthusiastic investment property buyers in Australia.  Barry O'Sullivan, a Nationals senator, owns 80 rented properties, Clive Palmer has 12.  On average, each MP owns 2.5 properties, or a total of 563 across the board.

So, will Barry or Clive, or any of the other 94% of current politicians who own investment properties vote to take away their entitlements?  Pigs might fly!