Following the recent issue of a Treasury taxation paper, there seems to be a campaign to disallow negative gearing, the practice whereby the annual losses an investor incurs on a rented property (because of the interest payable on the loan to make the investment) is an allowable deduction from other income for tax purposes.
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However, the case for stopping it is not strong, for two reasons: a) it would be contrary to the fundamental principle underlying income tax, namely that it's a tax on individuals, on the totality of the net income they receive, without regard for the particular activities that produce that net income; and b) the individual pays capital gains tax anyway when he eventually sells the property at a profit, which is usually more than the sum total of the annual losses while he owned the property (otherwise, why would he make the investment?).
True, only 50per cent of the capital gain is taxable. But it's a separate question as to whether it should be 100per cent, or some percentage higher than 50per cent (although, on that question, it's not valid to criticise a tax, and call it an unjustified concession, because of the level at which it's set.
For example, is it a "concession" because some people pay income tax at 45per cent, and some at 30per cent? And is the GST rate of 10per cent wrong because it's not 20per cent?
R.S. Gilbert, Braddon
Costly concessions
Mark Carter (Letters, April 23) has a point about the budget repair levy. Here is another.
Superannuation concessions were brought in by Peter Costello and John Howard and have probably cost the public purse more than $100billion. These concessions should have been rescinded by the previous Labor government, now neither of the major parties have the "ticker" to take away concessions for fear of losing votes.
An example, a person earning $50,000 with no deductions pays approximately $6000 tax. A retired person with a $3million self-managed super fund probably receives about $210,000 income and probably a capital gain on his investment of say 5per cent which is equal to $150,000 increase to his superannuation fund. Total received: $360,000 tax free. (Imputation credits are refunded) Is this fair?
Max Jensen, Chifley
The not so good old days
It may surprise Claude Wiltshire (Letters, April 23) to know Australia has never been a Christian country. Since Australia's creation it has been a secular country, this being enshrined in the Constitution in Section 116. Those who espouse a return to the supposed traditional values of some period in the past omit to mention the entrenched discrimination against women, ethnic minorities and non-heterosexuals of those times. I tend to think they look at the past through a rose-tinted telescope, but holding the wrong end to their eye.
Peter Marshall, Captains Flat, NSW
From his letter, one assumes Claude Whiltshire is a good Christian who believes in the teaching of their church. To have Claude preach his gospel to us and then selfishly declare that human values are Christian morals is an affront to way we live.
Christian morality, in all its guises, has been laid bare in recent times and is hardly the model of decency that Claude should be applauding. We all live by our human values, gained from our experiences from our time on this earth. There is nothing religious about it, just human nature.
Joe Murphy, Bonython
Defining 'abuse'
Ric Hingee (Letters, April 22) objects to the use of the term "abuse factories" to describe the detention centres on Manus Island and Nauru. Before sailing into print, he would have been well advised to read the December 2014 report of the Senate Legal and Constitutional Affairs References Committee dealing with the February 2014 death of Reza Barati, as well as the March 2015 Final Report of the Review into recent allegations relating to conditions and circumstances at the Regional Processing Centre in Nauru.
If what these reports document does not amount to abuse, then the word has no meaning.
Mr Hingee's complaint that it is emotive to complain when a young asylum seeker can have his head bashed in in an Australian-funded facility to which he was despatched against his will without any semblance of due process will do nothing to cleanse the reputations of these wretched places. It does, however, tell us quite a lot about Mr Hingee.
(Dr) William Maley, Reid
Questioning the ethics
Your report "Northbourne flats 'pinnacle' of design" (April 23, p1) says "The ACT government has already secured $60million in infrastructure sales bonuses from the Abbott government for the sale of public housing and surplus government office buildings".
Has this money been received by our town council? Is any of it linked to the proposed Northbourne mass demolition, rezoning and sale? If not, what would be the sales bonuses expectable for such a sale and precisely what is the $60million for? How ethical – politically and economically – is this scheme to bribe state and territory politicians to sell off income-producing real estate and much-needed public housing?
Gary J. Wilson, Macgregor
The work/life imbalance
Ann Moyal (Letters, May 24) has hit the nail right on the head. Partners and fathers are also subject to the 12-hour (and more) six or seven day relentless grind. Children hardly see parents who are away from home from early morning until well after their bedtime, and who are barely present when they are at home, because of fatigue and stress. Partners who have jobs as well are coping as virtual single parents, and grandparents are filling in and picking up the pieces.
As one of those grandparents, believe me, I know.
Marilyn Chapple, Duffy
Rail too contentious
The Canberra Times editorial "Light rail is a risky business" (Times2, April 17, p2) comments on the wisdom of the ACT opposition's intention to tear up contracts for light rail should itbe successful at the 2016 election. Rightly, the editorial points out that there are persuasive yet conflicting transport infrastructure opinions and questionable and conflicting cost-benefit analyses from both sides about this proposal. Neither side of politics can claim with any certainty to represent the views of the ACT electorate on this vexed issue.
The current and predicted economic issues that confront the government and therefore the community are significant.
Any large financial burden can and will beset the residents of the ACT. The upfront and residual costs of light rail may well be justified. The costs of cancellation, should there be a change of government, may well be right, given the opposition's staunch rejection of the light rail.
But what is real is that regardless of what occurs, the ACT residents will pay for either outcome and we have not had agenuine and definitive say in either scenario. Claims that the 2012 election provided a clear mandate on light rail are spurious and it is naive to think that the electorate would accept a newly elected government using taxpayers' limited resources on penalty payments.
The government may argue that it received a mandate at the last election to advance light rail, but many in the community question that assertion, and many, given the reduced revenue predictions and the increased expenditure burdens, are doubting the wisdom of pressing ahead regardless.
The government's clearer mandate is to manage responsibly. The proposition tocancel contracts and pay compensation has not been tested as a sound or acceptable taxpayer-funded outcome. Political will is driving both sides, not what is necessarily economically wise or sustainable for the ACT taxpayer.
The arrogance of both sides is obvious, but in politics why would we expect otherwise? If the political parties believe that their case is right, then let them debate the issue at the next election or put a referendum tothe residents at the next election. In the meantime, the government and the opposition should take a cautious approach to committing to contractual obligations or penalty payments.
Ken Stokes, Wanniassa
Paul Pollard's pseudo economics (Letters, April 23) are wrong. The benefits of light rail stretch into the future. Applying a lower discount rate to those benefits actually improves the rationale for the project.
Indeed, he should have a closer look at the business case (p104): the ACT government actually did sensitivity analysis using a lower discount rate of 4per cent, and the benefit-cost ratio improved to 1.5.
Mr Pollard's letter does, though, reinforce two important points. First, the business case is robust and conservative.
His example illustrates that the ACT government could easily have used different numbers to improve the economics of the project. They didn't. To my mind, we have been shown a business case that is honest and at the low end of the benefits our city will see from light rail.
Second, Mr Pollard has amply demonstrated that opponents of the project will do and say whatever they can to deny Canberra a worthy public transportation system.
Be it Alistair Coe's reckless flirtation with sovereign risk or Mr Pollard's economic pronouncements, which are categorically incorrect and uninformed, we should all be exceptionally wary of the desperate half-truths put forward by its opponents.
I even recall ANU academic Leo Dobes previously suggesting light rail was bad because it meant we were not spending money on the health system, and therefore it would kill people. Terrible economics and surely an embarrassment to all economists.
I have every confidence that Canberra can overcome the sheer negativity of those who want to see our great city frozen in some mythical past, choking on its cars. Light rail will be a tremendous investment for our great city.
Byron Boon, Kambah
Kangaroo cull spin
Recently, ACT Parks and Conservation Service director Daniel Inglesias claimed the ACT had some of the highest densities of kangaroos per square kilometre in the country ("ACT lifts kangaroo cull number to 2400, April 15, p2), presumably to justify this year's extraordinary kangaroo cull.
So, one is left to ponder why the AAMI ACT road-crash analysis of almost 7000 incidents ("A little patience could cut prangs", April 22, p3) did not attribute any accidents to kangaroos? Kangaroos and other animals do cause road accidents, of course, but way down at the one or two percentage level of all incidents reported (see ACT Crash Information online).
Perhaps Mr Inglesias, as the ACT government spokesman, has used too much poetic licence to justify the destruction of the ACT kangaroo population, and we have again been subjected toyet more government spin.
Philip Machin, Wamboin, NSW
Slaughter breaks law
Once again K. Keevers (Letters, April 23) demands that I "put up or shut up" in regard to evidence that the annual kangaroo cull is cruel, based on nothing even resembling science, and a waste of ACT taxpayers' money.
In the first place, it is not up to ordinary citizens like me to demonstrate the unjustifiability of a slaughter which, if it is not justified, breaches two ACT laws: the Nature Conservation Act and the Animal Welfare Act.
It is up to the government to demonstrate that it has cause for such a massive exemption from its own laws. So far the government has failed to do so.
I cannot comment on the ACT Civil and Administrative Tribunal's reasons for ignoring all the evidence in favour of the government's assertions that the government is right simply because the government is right.
Only ACAT members know their reasons, just as only the ACT government knows why it wants to make eastern grey kangaroos extinct in the ACT.
Second, K. Keevers must know as well as I do that it is impossible to fit the tens of thousands of words of evidence showing that the cull is not only unnecessary but ecologically disastrous and horrifically cruel into a 250-word letter. However, this evidence is available to any member of the public who looks for it. How does K. Keevers think I found it?
Frankie Seymour, Queanbeyan, NSW
TO THE POINT
The Canberra Times wants to hear from you in short bursts. Email views in 50 words or fewer to
letters.editor@canberratimes.com.au
VENDETTA UNLIKELY
Oh dear, does Brendan Ryan (Letters, April 23) really think that there was a"vendetta from a few misguided journalists" against the Marist Brothers? Exactly what was said or written that was untrue, Mr Ryan?
Dominic Stinziani, Higgins
DID SHE GO WITH JULIE?
After reading Christina Faulk's letter to the editor (April 23), the only response is to ask whether Christina is one of Julie Bishop's staffers who was on the trip to Iran with her?
E.R. Moffat, Weston
GALLIPOLI NUMBERS
So Australians comprised only 5per cent of all troops engaged at Gallipoli ("Rebooting Anzac tradition", Times2, April 23, p1)? But I wonder what percentage of the total population of each country served int he campaign.
Ken McPhan, Spence
HEIGHT OF ARROGANCE
The RSL has made many arrogant rulings over the Anzac Day march over the years, but stopping Albert Jacka's niece from marching because she can't access his medals, which are on display in the War Memorial, takes the prize.
I'll never march again.
Bob Gardiner, Isabella Plains
MEDAL FOR WOUNDED
Isn't it about time that the Australian government announced a medal for men who are actually physically wounded in war similar to the Purple Heart awarded to American servicemen? It would mean more to us than the empty rhetoric about our sacrifice.
Don Tate, Albion Park Rail, NSW
MERGE DEPARTMENTS
Well said, Peter Grabosky (Letters, April 24). To encourage due care of Australian Defence Force members in future, I urge the Prime Minister to combine the Departments of Foreign Affairs, Defence and Veterans Affairs. Even two or three foregone reckless interventions would keep the budget in surplus for generations.
Susan Tonkin, Curtin
'AEROBATICS' THE WORD
People perform "acrobatics", Henry Belot ("Canberra's paper plane champion to take on the world", April23, p8). Aircraft perform "aerobatics".
B.J. Millar, Isabella Plains
PEOPLE SMUGGLING
Those people who claim that our response to people smuggling attracts universal condemnation overseas should note that the European Community is now considering military action to halt that illegal activity.
F. Lamb, Lyons
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