The
papers are running big this morning with the Business Council of Australia’s attack
on the Federal Government for massively underestimating
its tax revenues,
accusing it of thwarting tax reform and damaging competitiveness.

What they bury, though, is the BCA’s
comments on negative gearing. They’re just as severe. Take The Age‘s report:

For the first
time the council appeared to broach the politically delicate subject of the tax
treatment of investment housing, warning that the system “creates biases
against investment in productive assets.”

“The tax
system favours lower-risk investment, especially when geared, compared with
higher-risk business investment,” it said.

Under the tax
regime, investors can write off borrowing costs for investments against all
income, and get a 50% discount on the capital gains tax when they sell.

Crikey
was the first outlet in Australia to draw attention to the housing
affordability surveys produced by US outfit Demographia. When the
latestcame
out last week, our meeja didn’t need a nudge. They were onto the results quick
smart.

Sydney, Hobart, Adelaide and Melbourne all ended up in the global top 20
unaffordable housing markets.

Beautifully, the cover of the
report contained this quote: “One of the best instincts in us is that which
induces us to have one little piece of earth with a house and a garden which is
ours; to which we can withdraw, in which we can be among our friends, into
which no stranger may come against our will.”

It’s from Ming, of course. His
successor – and would be successor – may like to ponder it.