Industry fund research backs negative gearing changes

Research commissioned by industry superannuation funds has substantially supported Federal Opposition policy on negative gearing, finding that the majority of people who don’t own investment property support changes to the existing negative gearing campaign.

The research, released at the Conference of Major Superannuation Funds (CMSF) in Brisbane was commissioned by the Australian Institute of Superannuation Trustees and conducted by Essential Media and found that more than half of non-investors in property would support changes to negative gearing, even if it mean house prices falling slightly.

The research found 55 per cent of non-investor respondents would support the changes to negative gearing, with just over a third of respondents who described themselves as property investors also indicating they would support a change.

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It said that support was strongest (45 per cent) among property investors with children.

The survey also found that 95 per cent of investors said security in retirement was an important factor in influencing their decision to purchase an investment property with minimising the amount of tax they paid being another motivating factor for 74% of investors.

The research also found the needs of investors’ children played a role in property purchases but less so than retirement needs.

It said that creating an asset that they could pass on to their children was important for 79 per cent of property investors, while providing somewhere for children to live was important to 57 per cent of investors.

The survey also revealed that many ‘negative gearers’ are expecting to carry large debts into retirement, with about one third of those who negative gear expecting to carry more than $100,000 of debt into retirement, compared to 8 per cent of those without an investment property, and 11 per cent of those with a non-geared investment property. 

Commenting on the research, Essential Media head of research, Dr Rebecca Huntley said fear of not having enough to retire was driving property investment.

AIST chief executive, Eva Scheerlinck said the survey confirmed that housing affordability was a significant concern to most Australians, including those heading into retirement.

 “The long-held assumption that the home is a safety net for retirees is becoming increasingly dubious as more older people are being forced to rent or use their super to reduce their mortgage in retirement,” Scheerlinck said. 

She said it was time to re-examine the role of negative gearing and Capital Gains Tax concessions which had been shown to fuel house price and was directing tax expenditure into unproductive assets.

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In other breaking news, research conducted by the union funds found that there is absolutely no correlation between the policies of the ALP and union self interest. It also found that vertical integration does not apply to union funds, SMSFs are bad and should be banned and best interest duty only applies to everyone except union fund "advice". ASIC has announced that they are releasing guidelines on how this research should be enforced starting immediately.

If concessional super contributions were totally eliminated, it would be interesting to then see if these research findings prevailed. I can't see negative gearing being removed, regardless. Gearing isn't affecting housing affordability in the mining towns in the Pilbara (WA) at the moment.

Do the members like the ISA spending their money on this highly charged political guff? How is this benefiting the members, many of whom probably have an investment property being in the construction areas etc? To say negative gearing clients take more debt into retirement surely this is grasping at straws and not taking into account the assets value they are geared up against, ie the net asset value overall? Most if not all would sell up and take the gains around retirement anyway, to at least pay off the debt, its too messy to be gearing into retirement, only for certain clients if any. This is from real life experience with real life clients. More holes than a sieve in this argument from the masters of puppetry.

what are they advocating, doing away with negative gearing on shares as well. I
dont think so !!!

How is it in the best interests of their members to be funding research which is not in any way related to funding the retirement of the member. superannuation? I'm sick of these industry fund bosses using member money to pursue their own political agenda. Wake up David Whitely and co! It is not your money!

When ISA is backing not only not only non-superannuation negative gearing and also the Opposition's policy on dividend imputation you realise that Industry Funds are nothing more than what they started as, that being ALP beholden "union funds." If an election had been called yesterday, Mr Whiteley's comments would have had a "written & authorised by" at the end of them. If The Royal Commission does not notice this, then it is a complete and total waste of everyone's time and money.

Negative gearing isnt the main problem. Its Capitol Gains discounts. What a joke it is that you buy an asset sit it an do nothing and then sell it at a profit and get a tax discount. It makes no sense that there are no CG discounts for other productive assets in the economy.

I trust that the current Royal Commission is monitoring stories such as these? How is it in the interests of their Members that the fees that they pay are used to survey non-superannuation issues? Mike Taylor, can you please ask Mr Whitely that simple question. Both the Royal Commission & I deserve a response to such a simple question!

Wow people own a home and then think they are property investors. Negative gearing is a flawed strategy, you would never by a business that is losing money in the hope that you can sell it at a profit in the future, so why is property any different. More astounding is that people who don't own an investor property agree to making changes to negative gearing, something they don't know anything about. Seems the ALP supporters are uneducated and believe whatever poison is fed to them by their political party. It seems the dumb keep getting dumber.

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