SAUL ESLAKE

Economist

SAUL ESLAKE

‘Welcome to my website …
I’m an independent economist, speaker, company director
and Vice-Chancellor’s Fellow at the University of Tasmania’

Negative gearing reform ‘essential’ to improve housing affordability: Saul Eslake


Housing, News, Taxation | 10th April 2017

Michael Janda |RN Breakfast ABC News | 10th April 2017

Interview with ABC Business Reporter Michael Janda on Monday 10th April 2017

Negative gearing reform ‘essential’ to improve housing affordability: Saul Eslake

Scaling back negative gearing or capital gains tax concessions for property investment is “essential” to improve housing affordability for first home buyers, independent economist Saul Eslake has argued.

While applauding some of the housing affordability measures outlined by Treasurer Scott Morrison in his speech to the Australian Housing and Urban Research Institute (AHURI) this morning, Mr Eslake said cutting back negative gearing tax breaks was the number one solution to lifting home ownership rates amongst younger Australians.

“First of all, by reducing the competition which would-be first home buyers face from others who get their interest bill subsidised or who are in otherwise advantaged by the tax system, particularly investors,” he told the ABC’s RN Breakfast program.

Mr Morrison used his speech to rule out changes to negative gearing, which allows investors to deduct interest and other costs related to their properties against their other income for income tax purposes when those costs exceed their rental revenue.

The Treasurer argued such changes would push up rents if investors pulled out of the market, and could lead to an economic decline if property prices fell sharply.

Property groups argue negative gearing is primarily the domain of the middle class, but the data do not support that.
He also argued that it is mainly small-scale investors on moderate incomes that utilise the negative gearing tax deductions.

However, Mr Eslake said that was a major inconsistency in the Treasurer’s arguments in favour of retaining negative gearing unchanged.

“There’s a certain irony in the Treasurer on the one hand saying negative gearing is OK because lots of nurses, teachers and police do it, but in the very same speech bemoaning the fact that nurses and teachers in particular are unable to buy houses in the communities which they serve,” he said.

Increase in housing supply also needed

Mr Eslake said limiting negative gearing and/or reducing the capital gains tax discount is key to improving housing affordability.

“I believe they are an essential part of making housing more affordable for people who don’t already own at least one property,” he said.

“They’re not a magic bullet, they need to be accompanied by other measures which will boost supply.”

Forget affordability, Michael Janda asks why the hell anyone in Gen Y would want to buy a home right now.
While critical of the Treasurer’s continued refusal to consider curtailing negative gearing, Mr Eslake acknowledged some positives out of his speech.

“Some of the things Mr Morrison is proposing in relation, for example, to the bond aggregator based on the UK model of facilitating the raising of debt by not-for-profit housing providers in order to provide more affordable rental housing is an important measure to boost supply,” he opined.

Mr Eslake added that state and local government planning changes to encourage development, and various proposals to encourage older people to downsize to free-up the supply of family-sized houses, would also increase the supply of housing and put downward pressure on property prices.

Eslake attacks super bad idea

Responding to reports in News Limited papers that the Government is still considering some form of scheme to allow first home buyers to divert their superannuation contributions to a housing deposit, Mr Eslake said it was a bad idea on multiple fronts.

“The history of the last 50 years shows that anything which allows people to spend more buying a home than they otherwise would … ultimately results not in more people owning homes but in homes becoming more expensive,” he said.

“That is, the benefits accrue primarily to those who already own homes, rather than those who don’t but would like to.”

Allowing superannuation to be used for home deposits would facilitate a great intergenerational theft, argues Michael Janda.
Mr Eslake recently wrote a report highlighting how an increasing proportion of retirees were using their superannuation savings to finish paying off their home loans.

However, he said that allowing people to access super to put towards housing earlier in their life would not alleviate that situation and may even leave people with less money to clear their mortgage debts at retirement.

“It will also of course mean that those people save less through superannuation over their working lives and a result, because of the impact of compound interest, will end up poorer in retirement than they otherwise would have been,” he added.

PREMIUM ACCESS


Weekly Chart Pack and Online Event


Next Online Event

WEEKLY CHART PACK


Each weekend since mid-April I’ve been preparing, updating and distributing a weekly Coronavirus Impact Chart Pack to people in Australia and overseas. Running to over 100 pages it includes:

  • charts tracking the spread of Covid-19, globally and in Australia, and government responses to it;
  • the impact on the global economy and major individual economies such as China, Japan, other Asian economies, the US and Europe;
  • financial and commodities markets;
  • multiple aspects of the Australian economy, including state-level comparisons, and the policy responses of the Australian and state or territory governments, and the Reserve Bank of Australia; and
  • similar, though smaller coverage of the New Zealand economy.

The Coronavirus Impact Chart Pack will be updated every Saturday afternoon, Australian time, for as long as it remains topical. It will be accessible to subscribers of the Premium Access package.

If and when Covid-19 ceases to be front and centre of attention (as it is now) – whenever that might be – I will continue to prepare a Weekly Chart Pack, but with a focus on whatever replaces the virus as the issue du jour.

ECONOMIC IMPACT OF THE CORONAVIRUS PANDEMIC
6th March 2021


CORONAVIRUS IMPACT CHART PACK 2021-03-06

"I see a lot of chart packs in my line of work, but yours is about the best I have seen. It is amazingly comprehensive, covering far more of the world than any individual is entitled to cover, the charts are clear and easy to understand and they drill down into each topic in a very satisfying way. So well done, Saul."

Alan Kohler, ABC finance presenter, founder of Eureka Report


"A timely and comprehensive summary from one of Australia's best economists."

Adam Creighton, Economics Editor for The Australian


“I continue to find you thinking invaluable - this year to my ritual weekend reading of the economist I have happily added ‘Saul’s latest’.”

Rufus Black, former Managing Partner of McKinsey’s, and currently Vice-Chancellor of the University of Tasmania


“Your chart pack is amazing - and thanks for offering to add me to the mailing list, that would be great to be included. Everything you could want to know is there - and the way the data are organised and presented to tell the stories makes it so easy to follow.”

Prof Jeff Borland, Truby Williams Professor of Economics, The University of Melbourne, Website


“An excellent summary. Although I take a great interest in what’s happening with COVID-19 day by day In Australia and Internationally, I always find your weekly summary a very interesting review of the past week.”

retired former Chief Executive Officer of a District Hospital Service in New South Wales


WEEKLY CHART PACK

EVENTS

Saul Eslake online presentation


“You are the best economic thinker in the country hands down”

Sheryle Bagwell, recently retired Senior Business Correspondent (and sometime Executive Producer),
ABC Radio National Breakfast


"I see a lot of chart packs in my line of work, but yours is about the best I have seen. It is amazingly comprehensive, covering far more of the world than any individual is entitled to cover, the charts are clear and easy to understand and they drill down into each topic in a very satisfying way.
So well done, Saul."

Alan Kohler, ABC finance presenter, founder of Eureka Report


“I continue to find you thinking invaluable - this year to my ritual weekend reading of the economist I have happily added ‘Saul’s latest’.”

Rufus Black, former Managing Partner of McKinsey’s, and currently Vice-Chancellor of the University of Tasmania


“Your chart pack is amazing - and thanks for offering to add me to the mailing list, that would be great to be included. Everything you could want to know is there - and the way the data are organised and presented to tell the stories makes it so easy to follow.”

Prof Jeff Borland, Truby Williams Professor of Economics, The University of Melbourne, Website


“An excellent summary. Although I take a great interest in what’s happening with COVID-19 day by day In Australia and Internationally, I always find your weekly summary a very interesting review of the past week.”

retired former Chief Executive Officer of a District Hospital Service in New South Wales


“Just want to congratulate you Saul on the unbelievably good set of slides you just presented, possibly the best I have ever seen. You have set the bar very high.”

Dr Joe Flood, Adjunct Fellow, RMIT University, Pandemicia


“Thank you very much for your excellent presentation for the Economic Society today. It is always a great pleasure to hear your eloquent, up-to-date and comprehensive talks.”

Andrew Trembath, economist, Victorian and Australian Government agencies


online events @ saul-eslake.com



Request Speaking Engagement

COMING UP

Up Coming Speaking Engagements


VIDEO

Recent Presentations


The Impact of Covid-19 series

These videos are available to audience of Saul’s presentations as soon as they are uploaded and will be available to public one month after the presentation date.

See more


TESTIMONIALS

What Others Say


“You are one of the best at what you do in the world”
Gail Fosler, Chief Economist, The Conference Board, New York, December 2002

“I have never known an economist to have such a knowledge of world economic facts and to be able to bring to bear so much information in answering a question without notice”
Charles Goode, Chairman, ANZ Bank, July 2009

“Saul Eslake is … a highly regarded independent economist with the highest degree of integrity"
John Durie, Columnist, The Australian, July 2009

“… one of the few people in this world who can have so many oranges up in the air at the same time but still manage to catch them"
Andrew Clark, journalist, Australian Financial Review, November 2008

Read more

LINKS

Useful Links