Who is briefing Leigh Sales?

1458597179505We watched Malcolm Turnbull being “grilled” by Leigh Sales – OK, a flirtatious little encounter, although I think Sales has stopped just calling the PM, Malcolm – last night on 7.30.  We thought he did rather well although that was not the conclusion of Fauxfacts (Sales unloads on Turnbull is the heading).

In true ABC faux-aggressive style (put away that knife though, Leigh), Sales came up with this amazingly garbled proposition:

“In your first interview with this program as Prime Minister you said that the first principles of the Turnbull government would be the free market, so why are you now violating that principle by backing negative gearing, which is a government intervention that distorts the market,” she said.

“That is so wrong, Leigh,” Mr Turnbull said. “Negative gearing is income tax 101, and a normal tax deduction, not a government incentive.”

Who put this ludicrous idea into her head?  The tax deductibility of the costs of investing in an income producing assets violates the principle of free markets?  Is she nuts?

And then she was Miss Know-it-All about the Productivity Commission’s assessment of the impact of the ABCC on aggregate productivity in the construction industry.

If she had bothered to look at the appendix of the report on Public Infrastructure, she would have realised that it is all rubbish – garbage in, garbage out.  There are serious measurement errors when it comes to the measurement of productivity and there is no multifactoral analysis undertaken.  It is just a matter of chopping up the data according to the dates in which there were different institutional arrangements.

When Independent Economics (Chris Murphy) undertook the analysis, he came to a different conclusion, pointing out a gain of productivity of between 10 and 20 per cent.

The reality is that this type of analysis can never be conclusive; detailed comparative case studies are really the only way to go.  But Sales didn’t bother to point out the PC’s conclusion on the topic:

The industrial relations environment in the construction industry remains problematic, mainly in general rather than civil construction, with the problems much greater for some sites, unions and states. Governments can use their procurement policies to drive reform, and penalties for unlawful conduct should rise.

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71 Responses to Who is briefing Leigh Sales?

  1. Ant

    Is she nuts?

    She’s a leftist.

    But we repeat ourselves.

  2. Infidel Tiger

    Who is briefing Leigh Sales?

    The finest left wing minds in Australia.

  3. Roger

    If that was a grilling it’s only because Turnbull has as much substance as a cheese sandwich.

  4. Bruce of Newcastle

    Who put this ludicrous idea into her head?

    Karl Marx?

  5. Baldrick

    Infidel Tiger
    #1983190, posted on March 22, 2016 at 10:49 am
    Who is briefing Leigh Sales?

    The finest left wing minds in Australia.

    … taxpayers money can buy.

  6. Charles

    Like Judith I was flabbergasted. Leigh Sales has described one of the major single principles on which economic activity is based on, as a government intervention!

    Imagine just for a moment that we were taxed on the inputs of production as well as final revenue, it would automatically make every single product and service ever offered in the world unviable. In order to survive we could only ever consume what we produce, and so we would have to go back to a hunting and gathering lifestyle.

    To think that the muppets in the ABC do not even understand this most basic of rules, shows that most of them probably need to be taken to that place for special people where they can live out their delusions and fantasies away from the rest of us, without becoming unnecessarily peturbed by things beyond their control.

    I blame our education system which is unable to teach anyone anything useful at all levels including primary and secondary school as well as VET and university. Education is now nothing more than expensive child care and the equivalent of paying people to dig educational holes just to fill them in again.

  7. MAGB

    It’s Marxism 101 – “the long march through the institutions”. They’ve captured the ABC, most of the rest of the media and most of the educational institutions. Everything’s going to plan, except that many people with experience of business, and life in general, persist in voting for free enterprise. However there is no sign that the ABC propaganda machine will give up the war.

  8. H B Bear

    The whole interview was poor. Lord Waffleworth had effectively announce Day 1 of the election campaign and was given 15 minutes of the ALPBC state broadcaster’s time to explain why. Of course he couldn’t say it was Abbott’s legislation that he was campaigning on – and Sales just let that slide.

    Red Kezza or Mr Gayle Brodtman wouldn’t have let Waffles off that lightly. And now Waffles needs to come up with 15 weeks of campaign material when he couldn’t even fill 15 minutes.

  9. Cannibal

    Every day Sales looks and thinks more and more like Lenore Taylor.

    She’s a leftist.

    No, she’s a rich leftist

  10. Fisky

    Who put this ludicrous idea into her head?

    One of our dimwitted Leftist trolls. It sounds like Metro came up with it or maybe Homer.

  11. Pete of Perth

    The idea that the abc distorts the market hadn’t even begun to speculate about the merest possibility of crossing her mind. (to paraphrase Douglas Adams)

  12. JC

    One of our dimwitted Leftist trolls. It sounds like Metro came up with it or maybe Homer.

    It had to come from the Australia Institute or Grattan. There’s enough idiocy and envy in those two asylums to sink the Titanic.

  13. JC

    Every day Sales looks and thinks more and more like Lenore Taylor.

    Was she booted in the last leftie layoff fest?

  14. gabrianga

    Forget Leigh Sales.. Who is briefing Lord Wentworth?

    Malcolm Turnbull has conceded Tony Abbott could be a hindrance to the looming election campaign.

    He acknowledged there was a chance Mr. Abbott could be bad for his election campaign but said it depended on his comments.

    “Tony is a national figure, I hope that he will be supportive and he’s indicating that he will be and that will be good.”

    “There was not a comprehensive innovation agenda under the Abbott government, there is now under the Turnbull government.”

    When ABC 7.30 host Leigh Sales asked Mr. Turnbull “What was the point of knifing Tony Abbott?” in an interview last night, the Prime Minister objected to that description.

    “Well, I don’t want to buy into those sort of unpleasant metaphors,” Mr. Turnbull said. “We shouldn’t be using violent metaphors like that.”

    And this was only day 1 ???

  15. Richard H

    If she had bothered to look at the appendix of the report on Public Infrastructure, she would have realised that it is all rubbish – garbage in, garbage out.

    With respect, Judith, that statement assumes that Sales could understand the content of the report. I don’t see any evidence to support that assumption.

  16. JJF

    ABC is a distortion of the market NOT negative gearing!!!

  17. .

    Fisky
    #1983228, posted on March 22, 2016 at 11:31 am
    Who put this ludicrous idea into her head?

    One of our dimwitted Leftist trolls. It sounds like Metro came up with it or maybe Homer.

    I bet it was Koukoulas.

  18. Linden

    yes why would anybody be surprised with Sales, after all she is not there for a neutral balanced interviewer asking properly based questions; but rather to run the socialists agenda on behalf of the Labor Party

  19. cuckoo

    Had to laugh at Sales monstering His Lordship for supposedly not having enough policy on industrial reform. Whenever the Coalition lifts a finger to do anything in this direction, however tepid, Sales and the rest of the ABC will be attacking from the other direction.

    This is in the same category of chutzpah that enabled the ABC, having deliberately destroyed the live-export trade, to then send journos out to do sob-story I-feel-your-pain Barbara Walters interviews with the now-struggling cattle farmers.

  20. Peter OBrien

    Have you noticed that Shorten and others are now referring to people using negative gearing as ‘speculators’, the implication being that these are somehow pretty dodgy people, akin to used car salesmen or politicians.

  21. gbees

    The whole negative gearing nonsense is a joke. If one acquires income from whatever source the government thinks it’s obliged to tax it. One has to report all income from all sources, foreign and domestic. That income is then taxed. This means that any legitimate amount expended in the creation of said income is a valid deduction from that income in order to determine assessable income. Thus one’s entire income is assessed as taxable and thus ALL expenses can be claimed against that aggregated income. To not allow these deductions is tantamount to theft by the government. Mind you taxation levels are at theft level now. So expenses like interest on a loan for a property, all property expenses must be allowed as are bank charges for interest received on deposits, as are broker expenses in share purchases and sales. If, God forbid, the Australian home is determined to be a taxable asset then all expenses across the entire life of that asset are claimable. So good luck to the government if they think the entire capital gain might be taxed! It would only be considering taxing the family home if it could tax the entire capital gain thus disallowing expenses. That indeed would be theft of the highest order. Sales seems no to understand the basics of economics, finance or accounting. In which case she is not qualified to ask anyone questions in relation to this subject. Just another know it all leftard journalist. The sooner TheirAbc is shut down the better.

  22. Kool Aid Kid

    The ABCs internal economic guru is also known as The Bicycle Thief, for internally known reasons to do with a bicycle once left in the car park. The issue of productivity and the cfmeu comes a poor second to the administration of the law. Sales was sad and has developed a very bad habit of talking over people for no good purpose.

  23. Grigory M

    Sales looked less than happy in the Usurper interview last night. I thought the ABC minders had her on a leash.

  24. Habib

    What about Mr Foppy’s sooky spit over being pulled up on claiming credit for the admittedly few achievements of the Abbott govt, in which his sole role was to further fuck up the ABN, increasingly cossett the ABC, and to leak like a Collins Class?

    Anyone want to continue to blow smoke up his arse? Starting to give Gillard/Rudd a run for equal worst ever.

  25. Lloyd Dobler

    Leaving all the statistics and expert opinions aside regarding Negative Gearing.

    Rich Uncle Mal will have a problem selling Negative Gearing to the vast majority of the electorate who don’t avail themselves of its benefits.

    Rich Uncle Mal looked good on paper, but it has become even more apparent that he just a pompous twat consumed with hubris who owns a lot of property.

    Why would a Western Sydneysider like him?

  26. Grigory M

    Negative gearing is a tax dodge that allows “investors” to buy loss making assets (especially housing), using the funds supplied by other taxpayers – then walk away with a net capital gain when the asset is later sold.

  27. Tintarella di Luna

    The ABCs internal economic guru is also known as The Bicycle Thief,

    Funny you should mention the Bicycle Thief that is exactly who I thought of as I passed the edifice of angst in Ultimo last evening – and did they ever find that thief?

  28. Luke

    Idiots! It is an incentive meant to drive investment towards a particular purpose which is, and always was, the policy reason for implementing it! It was introduced (and always argued as such, until it was pointed out that it is the opposite of market economics) as being needed to drive investment in housing, particularly rental housing. Stop foolishly trashing your own credibility on negative gearing.

    Tax incentive = a positive or negative tax rule that causes more capital to be invested in a particular thing than otherwise would be without such a rule.

  29. .

    Grigory M
    #1983389, posted on March 22, 2016 at 2:35 pm
    Negative gearing is a tax dodge that allows “investors” to buy loss making assets (especially housing), using the funds supplied by other taxpayers – then walk away with a net capital gain when the asset is later sold.

    No.

    Stick to law.

  30. egg_

    The ABCs internal economic guru is also known as The Bicycle Thief

    Still has his first dollar?

  31. Grigory M

    No.

    Yes. I have done just what I said.

  32. Talleyrand

    If Ms Sales opposes Negative gearing she thinks it reflects government intervention in the market; she must surely be opposed to the ABC & SBS being given $(1.2+0.35)B per year of taxpayer funds to completely subsidise the ABC entry and distortion of the broadcast and online media markets.

    Ask Fairfax employees how fair and equitable it is to have your paper undercut by give away content from Government funded providers

  33. .

    I’m at a loss how other taxpayers funded you Grigory. You cannot get a deduction if you earn no income. At the end of the investment period, you made a net capital gain.

  34. Grigory M

    Dot Esq. – you should know how it works – Negative Gearing 101, as the Usurper is fond of saying*.

    * Near enough.

  35. Tim Neilson

    Negative gearing is a tax dodge that allows “investors” to buy loss making assets (especially housing), using the funds supplied by other taxpayers – then walk away with a net capital gain when the asset is later sold.
    Totally false. Negative gearing losses can’t give rise to a tax refund. They can only reduce or eliminate tax on other income that the relevant taxpayer has earned. No-one else’s dollars are involved.
    There is nothing wrong with walking away with a net capital gain on a capital asset. If the taxpayer is really trading in houses, or is investing with the intention of selling before the house has turned net positive in income minus expenses terms, then the capital gains discount shouldn’t be allowable. There’s nothing wrong with the existing laws. It’s an enforcement problem if there is a problem at all.

  36. .

    You were not subsidised by anyone. You offset some income tax liabilities against income tax credits. You paid net capital gains tax too.

  37. eb

    Ya know, these losses that these so-called investors are making are actual real cash money out-of-pocket losses. They’re not some make believe book entry.

    They are not subsidised by the non-tax paying public, like Plibbers apparently thinks.

    And when the asset, and I say asset because it could just as easily be a farm, a corner grocery store, or share investments, is sold, the taxpayer often has to stump up for tax at close to 25% of the gain made. That’s 25% of the gain going to the Gummint for doing precisely nothing, no putting their hard-earned in to pay off the debt, no putting their house on the line as security, nothin’!

  38. PoliticoNT

    Is she nuts?
    She’s a leftist.
    But we repeat ourselves.

    Has this become a haiku competition? Great!

    Taxes fund our news.
    Stephen reflects a moment,
    But the vessel remains empty.

  39. The BigBlueCat

    So, if negative gearing is so bad, why did Hawke and Keating have to bring it back? Surely the failure of a previous (Labor) government in getting rid of negative gearing should provide some facts for those wanting to see it go!

    Oh sorry, we’re talking about the left aren’t we … they never learn! They think repeating the errors of the past will produce a different outcome …. oh dear!

  40. Token

    Get government out of the media business before it prejudices investment of a single class in such a destructive way.

  41. The BigBlueCat

    Grigory M
    #1983389, posted on March 22, 2016 at 2:35 pm
    Negative gearing is a tax dodge that allows “investors” to buy loss making assets (especially housing), using the funds supplied by other taxpayers – then walk away with a net capital gain when the asset is later sold.

    It’s not a “dodge”, it’s a valid deduction. You also conveniently forget that the capital gain is taxed (albeit reflecting a psuedo-indexed cost base) and the gain is calculated after adjusting for special depreciation claimed during the negative gearing phase. Dot has it right.

    BTW – if as you claim the investor is paying for the investment using the deduction (which I hope they are from a cash-flow perspective, because that makes the investment more efficient), at some point the investment becomes positively geared. Is your idea that this should not be assessable also? If so, bring it on – a have an asset I’m paying tax on when maybe I shouldn’t …..

    I find that most opponents of negative gearing are so risk-averse they would never consider it for themselves, and so want to deny others as well. Either that or they’re Marxists! If Joe Average can’t get ahead wealth-wise, then we’re in more trouble than we know!!

  42. Tim Neilson

    Oh sorry, we’re talking about the left aren’t we … they never learn! They think repeating the errors of the past will produce a different outcome …. oh dear!
    Same as border protection. Same as “stimulus” funding. There is a difference between middle class pinkos and lower primates. Lower primates can learn by trial and error.

  43. EB

    Been away, but I noticed the post on basslink. Good but it seemed to miss a couple of crucial elements, namely Tasmania sells nearly 2/3rds of its energy below cost to keep three smelters going for a total of about 1500 jobs.

    I’d like to know what the cost of selling that energy on the national grid would have been over the last decade vs how much Tasmania is losing by subsidizing those three smelters.

    Not that I trust politicians with money, but off the top of my head that seems like a pretty big rent seeking operation when the state could be filling its own coffers (or paying off its debts) and taking less out of the federal carve up.

  44. Grigory M

    It’s not a “dodge”, it’s a valid deduction.

    Of course it’s a dodge – a dodge that I have used. I invested in the purchase of an asset that I knew would generate losses – and I was able to offset those losses against my other income, thereby reducing my overall tax payable. Then I sold the asset and made a net capital gain. Yay for me – and the dodge was enabled by a valid deduction.

    It’s a form of cross-subsidization – something that many here have vehemently criticized in other areas of the economy.

  45. Zulu Kilo Two Alpha

    Oh sorry, we’re talking about the left aren’t we … they never learn! They think repeating the errors of the past will produce a different outcome …. oh dear!

    The left in this country always remind me of the American historian, Barbara Tuchman’s comment about Philip II of Spain – “No experience of the failure of his policies could convince him of other then the classical excellence of those policies.”

  46. Driftforge

    Comalco is only 25% of state usage, and has long term contracts in place for the supply of power at what is now close to generation cost.

    It’s a good deal for them now, but provided the base customer load to allow a lot of generation capacity to be installed back then.

  47. Driftforge

    It’s not a “dodge”, it’s a valid deduction.

    Valid as in allowed. Not valid in the sense of a rational arrangement for taxation purposes.

    You either allow everyone to deduct interest charges for loans, or you allow no one.

  48. Judith

    Lots of people as silly as Sales

  49. Tel

    The nonlinear so called “Progressive” taxation system distorts the free market (every tax does, but linear tax is not so bad).

    Negative gearing is mostly artifact of the nonlinear income tax. Under a flat tax I expect a lot less people would do it.

  50. MareeS

    Re your question, “Is she nuts?” Yes.

  51. Token

    I see Septimus has proven in this thread he doesn’t understand even the most elementary basics of economics.

    Troll fail.

  52. Kool Aid Kid

    Tintarella, I believe the incident was caught on cctv. TBT is a known certainty. Strangely he still appears to be employed and delivers finger pointing stories about business malfeasance etc. he has had a good career in the media Union though I’m sure that organisation would never countenance a tea leaf of the brothers’ cycle. Perhaps his relations with Saint mark, patron saint of mates networks, are helpful?

  53. Token

    Lots of people as silly as Sales

    The Borg has decided and the thralls must regurgitate the hive mind’s message.

    The poor will suffer and the left will demand more government intervention to “fix” what didn’t need to break.

  54. Squirrel

    Cats should take heart from last night’s encounter, and likewise with this morning’s on the network which dare not mention its full name (now calling itself RN) – the PM’s enthusiasm for the ABC seems to be distinctly on the wane, and federal Budget dollars are in short supply…..

  55. tgs

    You either allow everyone to deduct interest charges for loans, or you allow no one.

    But everyone can do this?

    If I borrow to buy shares I can claim the interest costs as a tax deduction?..

  56. PoliticoNT

    The 7.30 host’s eyelids flutter.
    A Prime Minister sighs.
    Three brain cells rattle freely.

  57. Kool Aid Kid

    Negative gearing is not a debate about tax. It’s a debate over risk. The true question is whether the risk weighting and leverage regulation imposed by global rules are the right ones. There seems to be some merit in the view that today’s complexity increases the economic risk by distorting behaviour in regulated institutions. Given their size it is likely that Austrskuan lenders are far more responsive to earnings and regulatory gaming than they are to balance sheet risk.
    If we have a problem with negative gearing it is likely because of bank risk weights.

  58. Kool Aid Kid

    Driftforge: hard to imagine that a base load consumer that occupies 25% of the load is in any way a contributor. They had to be incremental day one and were surely a cost driver?

  59. James in Melbourne

    If I borrow to buy shares I can claim the interest costs as a tax deduction?..

    You certainly can, TGS. It’s just that with low interest rates and lower LVRs on shares than on property, it’s actually difficult at present to be negatively geared in the share market.

    Given that margin lending interest rates are typically about 5 per cent, and dividend yields on the S&P/ASX 200 stocks are running at about 5.3 per cent (effectively a grossed-up yield of about 6.9 per cent), most margin-loan portfolios are positively geared.

  60. candy

    I think Ms Sales and M. Turnbull are very fond of one another, a lot in common in regard to life philosophies, political views, all that stuff.

    It would not surprise me if she has been a regular dinner party /cocktail party guest at the Turnbulls at their home in Point Piper over the years and are pretty close buddies.

  61. James in Melbourne

    Ask Fairfax employees how fair and equitable it is to have your paper undercut by give away content from Government funded providers

    Ah, Fairfax……the only known company to employ a business model of directing its editorial to appeal to public servant lefties (BIRM) in Fitzroy, Northcote and Brunswick, while simultaneously trying to convince advertisers that they should use it to sell high-end goods to people in Brighton and Toorak, whom the editorial consistently slagged off as arseholes for being in private business and using private schools.

  62. Crossie

    Who is briefing Leigh Sales?

    That was Malcolm’s job while Tony Abbott was the PM. Now we can ask “What is Tony Abbott’s role in this?”

  63. Grigory M

    I think Ms Sales and M. Turnbull are very fond of one another

    Do you need Nikki Savva’s phone number?

  64. The BigBlueCat

    It’s a form of cross-subsidization – something that many here have vehemently criticized in other areas of the economy.

    No, it’s an allowable deduction against income earned on that asset. A dodge is something else (like evasion).

  65. The BigBlueCat

    If we have a problem with negative gearing it is likely because of bank risk weights.

    What is the evidence that we have a problem with negative gearing (other then leftie sentiment)?

    I would suggest that the banks risk weight NG properties quite low since they are usually securitised against other properties, like the primary residence of the investor. LVR’s are still required to be met. Plus the rental income plus the tax effective nature of NG means there is a steady cash inflow from the investment paying either interest-only or principle and interest.

    When calculating their loss provisions, banks will take into account the probability of loss (low), time to default (long) and loss given default (low given demand for property plus securitization). I would expect the loss provision on investment properties to be more than acceptable, and not inflated as you imply by your comment on risk weighting. Any bank credit risk managers out there???

  66. Paul Farmer

    Leigh Sales is typical of the abc now, full of know it all smug leftists who actually know nothing about capitalism or free markets but want to appear like they are really intelligent and far above all us suckers who work in the private sector. Only they are wise enough to realise that free markets and capitalism is fatally flawed and only with big govt and their condescending bullshit can we solve the worlds problems.

    Never mind that the standard of living and wealth we have developed in this nation has been primarily because of free enterprise, trade and innovation that has developed both here and in other economies that are based on these principles. Competition is at the heart of this emergent evolutionary process not the dead hand of government. If capitalism didn’t work and generate the incomes and taxes it does, you couldn’t afford behemoth the abc has become, yet these dickheads want to continue to cannibalise the hand the feeds.

    Leigh sales is the reason I stopped watching the 730, in Kerry’s day , it was painful but he was a lot more balanced and far less aggressive. Wtf is with all these women journos on the abc who feel the need to be so aggressive in questioning . I don’t have a penis so I need to act like a school yard bully ? They think it makes them look smart. In turns an interview into an interrogation and I think it makes them look like know it all no nothing’s who don’t have any respect for the office which they are getting the privilege of addressing.

    I am sure they would counter argue, we are making the minister accountable. Hello…… They are not accountable to you but the people as a whole. In the old days, a journo would ask a question , and a minister would be given a chance to answer at length without constant interruption , attempts at gotchas and general smugness. These sorts of journos have no respect for the intelligence of their watchers and the sooner we get a lot more politicians saying unless you give the office ( not me ) i represent the respect it deserves I am not going on there. boycott it totally……. Know your enemies and treat them as such. An animal in the wild that doesn’t know it’s enemies doesn’t live very long.

  67. Anthony

    Governments can use their procurement policies to drive reform, and penalties for unlawful conduct should rise.

    Spot on, Productivity Commissions. The ACT government is a perfect example of this.

  68. goatjam

    Why would you need to brief someone who already knows everything?

  69. Rabz

    If I borrow to buy shares I can claim the interest costs as a tax deduction?..

    You certainly can, TGS. It’s just that with low interest rates and lower LVRs on shares than on property, it’s actually difficult at present to be negatively geared in the share market.

    True – I’m attempting to do this at the moment and all my mortgage interest payments applicable to the loan for the shares will be deducted from my taxable income. This will help to offset a rather large capital gains tax bill incurred this financial year.

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