Taxpayers who negatively gear cost the bulk of other taxpayers an average of $310 per year, a new analysis of Tax Office data shows.
The re-analysis of the 2013-14 tax data, the latest available, shows that each negative gearer claimed an average loss of $8722 per year. Seven out of 10 had income before deductions in the top or second-top tax bracket. The average amount of tax saved by each of the 1.2 million negative gearers was $2900 per year.
Spread over the remaining 11.7 million taxpayers, the average cost was $310 each. The total, $3.646 billion, is about as much as the government spent on assistance to jobseekers and vocational training, and twice what it spent on assistance to indigenous Australians.
The calculation excludes the separate 50 per cent discount on capital tax available to negative gearers who sell.
Campaigning in Western Sydney, opposition leader Bill Shorten said he had a message for the millions of Australians who didn't negatively gear:
"Your taxes are being used to subsidise the business model of large property speculators and real estate agents. We are not scrapping negative gearing entirely but we do want to do budget repair that is fair."
Mr Shorten is bracing himself for a direct-mail campaign from an alliance of more than 20 real estate chains that will argue any move against negative gearing will make it harder for first-home buyers rather than easier.
If elected, Labor will allow new investors to fully gear only if they buy new properties. Existing negative gearers could continue to deduct rental losses against wage income for as long as they hold those properties.
"The industry has a vested interest in keeping the current arrangements," Mr Shorten said. "I tell you who doesn't have a vested interest in keeping the current arrangements - hundreds of thousands of first home buyers who are being locked out of the market."
Mr Turnbull said the change would reduce investment and reduce property values.
"He is going to increase capital gains tax by 50 per cent. Capital gains tax is a tax on investment. He is going to increase the tax on investment. Let me tell you, if you want less of something, tax it more. Bill Shorten clearly wants less investment."
