NEGATIVE GEARING: Tom Elliott explains how it works

Federal Treasurer Jim Chalmers has brushed off suggestions the government may scrap negative gearing after breaking its promise not to make changes to stage three tax cuts.

3AW Mornings host Tom Elliott says many don’t really understand how negative gearing works, and eliminating it could drive up the cost of rental properties.

Press PLAY below to hear Tom Elliott’s negative gearing explainer

Executive director of think-tank Per Capita, Emma Dawson, says there’s nothing wrong with negative gearing in principle, but Australia’s negative gearing regime “has become very skewed”.

“In 1993, the federal government spending on housing — 44 per cent of it went to those at the bottom 20 per cent and only nine per cent went to the top. That’s flipped — it’s now 23 per cent of our money … goes to the bottom and 43 per cent goes to the top. We’re out of balance, we need to fix it,” she said.

Press PLAY below to hear why she says Australia’s negative gearing system is “skewed”