Chapter 4: The Rorts That Rig the Game

Every election, politicians talk about housing affordability. But the truth is, the rules are already stacked against ordinary people — by design.

At the heart of it are two tax perks that have become sacred cows in Australian politics: negative gearing and the capital gains tax discount.

How the Rorts Work

• Negative gearing lets investors write off property losses against their income. Buy a house, rent it at a loss, and claim it on tax. Ordinary people call that “losing money.” In Canberra, it’s called a “deduction.”
• Capital gains discounts mean when that same investor flips the property, they only pay tax on half the profit. You pay full freight on your wages. They don’t.

These policies weren’t designed to house people — they were designed to protect investors.

Who Benefits?

Here’s the kicker: almost half of federal MPs are landlords. Think about that. The very people writing the rules profit personally from keeping them.

So when you hear “we can’t touch negative gearing,” what they mean is: we won’t touch our own perks.

Meanwhile, young people are told to raid their super just to get a foothold — a policy experts warn will only push house prices up further.

Why It Hurts Kiama

In a place like Kiama, negative gearing isn’t abstract tax policy — it’s your neighbour outbidding your kids at auction because the tax system gives them an advantage. It’s speculators parking money in “holiday investments” while essential workers drive two hours to work here.

Every extra dollar of subsidy for investors is another nail in the coffin of local affordability.

The Excuses Don’t Hold Up

We’ve all heard the scare campaigns: “Reform will crash the market.” But remember this: the last time Labor floated reform, experts said the worst-case impact would be a modest cooling, not a crash. That’s exactly what first-home buyers need.

But what happened? The property lobby screamed, the opposition joined in, and Labor folded. It wasn’t about economics — it was about political courage.

What a Fair System Would Do

If we were serious about fairness, we would:

• Phase out negative gearing on existing properties (keep it for new builds only, so it actually encourages supply).
• End the capital gains discount so profit is taxed like wages.
• Redirect savings into public and affordable housing instead of padding investor portfolios.

It’s not radical — it’s common sense. Homes should be homes, not tax shelters.

The Bottom Line

Right now, the system rewards those who already own at the expense of those who don’t. That’s not a free market. That’s a rigged game.

And until politicians are willing to give up their own perks, the housing crisis will keep getting worse.

The question voters need to ask is simple: who are they really working for — you, or their own property portfolios?