In terms of how I have described my attitude towards negative gearing, I have always understood that for the vast majority of Australians who use negative gearing they are modest income earning Australians, nurses, teachers, police, Treasurer Scott Morrison told the National Press Club in February.
Mr Morrison's claim is selective. Australian Tax Office data shows that one in 10 Australians who files a tax return is negatively geared in terms of rental property. Data provided by Mr Morrison's office, based on Treasury calculations, showed 67 per cent of the people who use negative gearing have taxable incomes of $80,000 or less. This was backed up by Fact Check's analysis of ATO statistics. However, as 82 per cent of all taxpayers have taxable incomes below $80,000, it is not surprising that most of the negative gearers fall into this category. As this category represents only 67 per cent of negative gearers, it is clear that these taxpayers use negative gearing proportionately less than taxpayers with higher income. Put another way, only 8 per cent of people with taxable incomes less than $80,000 use negative gearing, compared with more than double that proportion among people with taxable incomes above $80,000. Similarly, people with taxable incomes over $80,000 receive 42 per cent of the negative gearing benefit, but they only represent 33 per cent of all negative gearers. Finally, those with a total income (including negative gearing benefit) of $52,000 a year or less — an income more in line with the definition of modest as a "moderate" or median income — represent 59 per cent of all taxpayers, but only 40 per cent of negatively geared taxpayers. Only 4 per cent of these people use negative gearing. When the negative gearing benefit is removed by taking out their rental losses, they represent 33 per cent of people who use negative gearing.
Fact check: Do most negative gearers earn a modest income?
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