Greens propose abolishing negative gearing

Australian Greens propose abolishing negative gearing.

The Greens want to end negative gearing on new housing investments, saving $3 billion over 4 years. [1]
The Greens proposal, which has been costed by the independent Parliamentary Budget Office, argues abolishing negative gearing would save $2.9 billion by 2020.
Over 10 years, the savings would amount to $42.5 billion. [2]

Source: June 7, 2015

Check the figures:

[1] Saving $3 billion over 4 years. = $0.75 billion per year (ie: Over 10 years the savings would amount to $7.5 billion)

[2] Over 10 years, the savings would amount to $42.5 billion. This is equal to $4.25 billion per year (ie: saving $17 billion of 4 years)

Which one is correct ?

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What happens if Negative Gearing is abolished ?.

1: Property Investors would lose money unless they increase rents to compensate.

2: If property investors can’t make profits, they won’t buy property to rent out. So the rental market becomes smaller, demand increases and pushes up rents.

Those are two of the LOGICAL answers.

Other Comments:

Siding with the Greens: “Bank of America Merrill Lynch chief economist Saul Eslake said there was a lot to like about the plan”
The Bank of America ??? Aug 21, 2014 – The Bank of America has paid almost $US17 billion to settle allegations about its role in the events leading up to the global financial crisis.…/bank-of-america-fined-17-billion-us-dollars-over-gfc-products

Property Council of Australia boss Ken Morrison said the Greens’ proposal is “dangerous” and would make housing affordability worse.

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