We’re still talking about negative gearing
Labor has launched the year on the offensive, citing a report from Treasury on negative gearing as proof the Turnbull government has been telling fibs.
Not sure what negative gearing is? Well…(deep breath in)….you borrow money from somewhere to buy and maintain an investment property, right? You stick a couple of tenants in that property. You expect that the money you make from the rent is still going to be more, in the short term, than servicing the loan. You plan to make money. But if you lose money, that’s a negatively geared property. Some investors like this idea, because making an investment that loses you money actually comes with some tax perks. Your investment could be tax-deductible against your other income. When you eventually sell the property the capital gains tax could be friendly. It’s great in a booming property market (say Sydney or Melbourne, where you can sell your first born for a cute jail cell on Bondi), but it’s risky at any other time.
Australia has unrestricted laws around negative gearing. But before the 2016 election, Labor promised to restrict negative gearing to new homes and reduce the tax concessions. The Liberal government pounced on the policy as disastrous. They said it would take a sledgehammer to the economy and slow down investment. But their own Treasury document states otherwise. Over the short term, the document says the policy “could introduce some downward pressure on property prices”. But in the long term, the document says the effect would be “relatively modest”. Hardly a sledgehammer.
At the moment, more than 50% of the benefits of negative gearing go to the top 20% of income earners. The top 10% of income earners receive about 75% of the benefit of the capital gains tax. So negative gearing is basically great for rich people.
Labor has started the year by picking a fight about housing affordability.
It was fucking hot this week
We broke more records. Hoorah.
Sydney hit its hight temperature recorded since 1939 with Penrith reaching 47.3 Celsius. (Your bitumen footpath only needs to be 55 to fry an egg.)
Victorian police had to send out a warning to motorists to avoid stretches of the Hume freeway because it was melting.
Most rail services around the country were slowed, or some cancelled, to deal with the lines expanding.
In related news, the Bureau of Meteorology (BOM) has declared that 2017 was the third warmest in Australia’s recorded history. Seven out of the ten hottest years have occurred since 2005.
Tragic passing triggers national discussion
14 year old Amy “Dolly” Everett, the young face of “Akubra” hats, took her own life last week after being targeted by bullies online. The story has gained momentum throughout the week, particularly in rural and regional communities. The Prime Minister released a statement, saying “Much more work is needed, from governments, health groups and the internet companies themselves, to prevent cyberbullying, stop it when it occurs and to minimise its impact when it does occur.”
If you or anyone you know needs help, you can always reach out to the following places:
Trump ‘s Fire and Fury
‘Fire and Fury: Inside the Trump White House’, released this week, is a book written by journalist Michael Wolff. The gossip contained within has stirred the media into a frenzy this week. The book doesn’t state anything particularly new, but it’s narrative assembly constructs a damning picture. The greatest hits include:
- Senior adviser (at one time) Steve Bannon called Trump’s son-in-law and adviser’s meetings with Russian officials treasonous;
- Trump has three TV’s in his bedroom and eats cheeseburgers for dinner;
- Melania Trump, his wife, is permanently dis-interested in a role in the White House and was dismayed by Trump’s win;
- No one in the Trump camp expected him to win and were completely caught off guard when he claimed victory;
- Trump is semi-illiterate, reading almost nothing and struggles to comprehend new information;
- Trump will repeat stories, word for word, within a ten minute window, as if recounting them for the first time;
- His staff’s almost non-existent political experience have created a White House that is wildly chaotic, leaking everywhere, and dangerous.
The claims about Trump’s memory and overall mental health have been enough to trigger discussion about his fitness for office. This certainly isn’t the first time that’s happened. On Tuesday, we’ll take a deep dive into a question that’s bugging everyone: ‘When will Trump get kicked out?’ (Spoiler: it’s more complicated to fire a sitting President than one might think.)
Trump responded to the debate on Twitter by saying he was “like, really smart” and a “stable genius”.
So that’s put that issue to rest.
The Golden Globes were this week. A bunch of people won some trophies, but everyone’s really talking about the all-black attire, worn to raise awareness of sexual harassment. The evening had many hi-lights and feminist fist pumps. None more so than an inspirational speech delivered by Oprah Winfrey that made the crowd rise to their feet. America then collectively lost their shit, and new rumours have circulated about a presidential run for Oprah in 2020. Oprah is a media mogul, inspirational speaker, and gifted entrepreneur with zero political and foreign diplomacy experience. But that’s never stopped anyone.
LGBTI rights in India
The Indian Supreme Court will re-examine laws that outlaw sex between men. The law bans “carnal intercourse against the order of nature with any man, woman or animal”. The punishment is life imprisonment.
Thankfully, fewer than 200 people have actually ever been convicted under the law, but activists claim it is regularly used as blackmail against LGBTI Indians.
The law is based on 16th Century British law. Some have been so radical to suggest it is outdated.
We’ll be back on Tuesday with a deep dive into Trump’s impeachment, the 25th amendment, and how to get rid of him.
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Image at the top from Getty Images.
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