24-07-2007

We believe ring-fencing property investment tax losses lacks a sound economic rationale. If policy-makers are serious about helping the Reserve Bank contain inflationary and housing pressure, the solution resides in looking at supply constraints, productivity, savings, and the enforceability of the existing rules towards housing – all areas with the potential to deliver better economic incentives. The introduction of such assistance is distinct from ancillary policy instruments, which we believe would deliver additional distortions.