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Wednesday, 11 September 1996
Page: 3343

(Question No. 147)


Senator Sherry asked the Assistant Treasurer, upon notice, on 17 July 1996:

(1) In addition to rental properties, what are the most common vehicles for negative gearing.

(2) What is the estimated tax expenditure on negative gearing in each of these categories for each of the past five financial years.

(3) How many individuals claimed negative gearing as a tax deduction in each of these categories for each of the past five financial years.

(4) How many individuals who had a gross taxable income more than $50 000 claimed negative gearing as a tax deduction in comparison to individuals who had a gross taxable income less than $50 000, for each of the past five financial years.


Senator Short —The answer to the honourable senator's question is as follows:

(1) The Australian Taxation Office (ATO) does not collect data which could be used to determine the most common vehicles for negative gearing.

(2) Under the bench mark adopted in the Tax Expenditures Statement produced by the Treasury, negative gearing is not considered to be a tax expenditure. The ATO and the Treasury provide estimates where actual data are not available and figures are required by the Government, usually as part of a policy development process. As a general rule estimates are not supplied to any other people or organisations.

However, in the 1993-94 income year, the actual amount of interest claimed against rental property income (that can be described as negatively geared) was $1,510 million for taxable individuals, and $557 million for partnerships and trusts. These amounts represent the interest claimed by taxpayers with a rental loss, limited to the level of the loss. This information is not available in respect of companies and superannuation funds or for other types of negatively geared investments as it is not separately identified in tax returns for those types of taxpayers.

Data are only readily available for the 1993-94 income year. Data are not yet available for subsequent years.

(3) The number of taxable individuals who claimed negative gearing in respect of their rental properties and had interest expenses related to these investments was 419,334 in the 1993-94 income year. Data are not available in respect of other years.

(4) In the 1993-94 income year, there were 81,211 taxable individuals with taxable incomes of $50,000 and over. There were 338,123 with taxable incomes of less than $50,000 who claimed losses in respect of their rental properties and had interest expenses related to these investments. Data are not available in respect of other years.