Ditching the naff political cliche of “mums and dads”, what Scott Morrison is saying is that it’s mainly the middle class who use negative gearing to get ahead. Michael Janda looks at whether this argument stacks up.
Treasurer Scott Morrison has been blitzing the airwaves defending negative gearing as the domain of “mum and dad” investors.
But the truth is those mums and dads are relatively more likely to be sending their kids to Cranbrook or Geelong Grammar than Rooty Hill High.
Ditching the naff political cliche of “mums and dads” – the ATO data doesn’t show how many of the negative gearers have actually reproduced – what Mr Morrison is saying is that it’s mainly the middle class who use negative gearing to get ahead.
His argument runs completely counter to almost all reputable, independent analysis.
A new report from the Grattan Institute think tank today again highlights that negative gearing is the domain of the better-off, showing the top 10 per cent of income earners receive almost half the tax benefits.
Undeterred, the Treasurer fronted RN Breakfast and a press conference this morning brandishing Tax Office statistics showing that 39,000 nurses and midwives use negative gearing, as well as tens of thousands of teachers and hordes of people from other middle-class professions.
He’s right. There’s no doubt that hundreds of thousands of Australians on reasonably average incomes deduct rental losses from their already relatively modest tax bills.
But while you can’t accuse the Treasurer of lying, he is clearly guilty of serious spin, highlighting the truth in the saying that there is “lies, damned lies, and statistics”.
What’s the spin? Well, there might be 38,390 nurses and midwives who negatively geared in the 2013-14 tax year, but there were more than 315,000 people who declared that as their main occupation.
Only 4,467 medical specialists and surgeons negatively geared, but then again, there were only 17,048 of them.
So I could accurately say that nearly nine times more nurses and midwives negatively gear property than surgeons and specialists but, in this case, all that’s really telling you is that there’s a helluva lot more nurses than specialist doctors.