Government didn’t have the “ticker” to abolish negative gearing in budget: Scott Pape

'Barefoot' investment adviser Scott Pape has slammed the government for not having the “ticker” to remove negative gearing in his latest newsletter following the federal budget announcement.

“Our 1.25 million loss making landlords cost taxpayers $5 billion a year - a significant saving when the budget is in deficit of $18 billion,” writes Pape.

“And all it achieves is to make it harder for young people to compete to buy their first family home.

“Sadly, the government didn't have the ticker to abolish it this year."

Pape bills himself as "Australia’s favourite money guy", but his views on negative gearing won’t be popular among the 1.2 million property investors who claimed losses on their investment properties for the 2010-11 tax year.

The recently published ATO annual report revealed that around two-thirds of 1,811,174 property investors - 1,213,597 taxpayers – claimed losses on their investment properties for the 2010-11 tax year up from 1,110,290 who claimed losses in the 2009-10 tax year.

The average loss recorded for negatively-geared property investors was $10,947 in 2010-11, up from $9,132 in 2009-10.

The highest proportion of tax payers claiming rental deductions are those earning between $37,000 and $80,000 per year, making up more than a third of all negatively-geared property investors.

Pape has long been a critic of negative gearing calling for its banning on talk back radio in 2011 and telling a negatively-geared listener that “negative gearing is really just a socially acceptable way of saying ‘I’m losing money’”.

Pape has labelled it a “dud policy” despite admitting to having been a “big beneficiary of negative gearing over the years”.

“Contrary to real estate rhetoric, it does little to increase the supply of new homes, since the majority of investors buy established properties. What’s more, it costs the Australian taxpayer billions of dollars in forgone revenue,” he says.