Bundaberg Investors & Business Owners – Leave Us Alone!
Most Australians are busy raising families, paying bills, running businesses and trying to get ahead. They don’t have time to read tax legislation, council budgets or government policy papers.
Yet those decisions affect almost every part of our lives.
Australia’s housing debate is often presented as a battle between renters and investors. But that is a cunning distraction that fails to consider government manipulation.
The reality is that housing works best when it is left to the free market. Every rental property requires someone willing to buy it, own it, maintain it and take the financial risk associated with providing housing. The government is reluctant to take on such responsibility, so they create incentives for investors.
When governments look for easy money and attack investment incentives, they create a plethora of new problems.
The latest example comes from Canberra.
The Federal Government’s 2026-27 Budget introduced plans to restrict negative gearing to newly built residential properties from 1 July 2027.
For many Australians, negative gearing is one of those terms frequently discussed but rarely understood.
In simple terms, negative gearing allows investors to offset losses from a rental property against their other taxable income. The policy was originally designed to encourage private investment into housing and increase the supply of rental accommodation, so the government didn’t have to.
Under the proposed changes, investors purchasing established residential properties after 12 May 2026 will no longer be able to claim those losses against their wage income. Instead, losses will be quarantined and carried forward.
The Government argues the policy will encourage investors to build new homes rather than compete with first-home buyers for existing properties.
Critics see it differently.
Property commentator Cam McLellan argues Australia has already implemented this policy before.
In his book Investing in the New Normal, McLellan points to the Hawke Government’s decision to abolish negative gearing in the mid-1980s. He argues that demand for investment properties plummeted while rents skyrocketed. Renters struggled to save for a deposit, and the government lost money as property transactions and stamp duty payments dried up. It took the government all of 18 months to reinstate negative gearing. Whoops.
His broader argument is worth considering.
Australia largely relies on private investors to provide rental accommodation. Unlike some overseas systems that rely heavily on government-owned housing projects, Australia’s rental market is spread throughout ordinary suburbs, with renters and homeowners living side by side. This style was purposefully implemented to prevent housing “ghettos” and crime-ridden “projects” like those seen in the United States.
The question is not whether investors deserve special treatment.
The question is, who provides rental housing if investors stop investing?
The negative gearing changes are only one part of a much larger picture. The Federal Government has also attacked discretionary trusts. For decades, family trusts have been used by farmers, small business owners, investors and families to protect and manage assets and distribute income. Under proposed reforms, discretionary trusts would face a minimum 30 per cent tax rate. If the government were looking for ways to disincentivise investors and create rental shortages, they have hit the nail on the head.
Investors, developers, and business owners make decisions based on the total cost and risk of owning assets. They expect to be compensated for putting their money at risk. This seems lost on many at the federal, state, and local levels.
That brings us to Bundaberg.
The recently adopted Bundaberg Regional Council budget introduces a range of lazy and greedy rate increases across multiple property categories.
Councillor Jason Bartels has been one of the most vocal critics of the Bundaberg Regional Council budget, arguing that while owner-occupiers face an 8.28 per cent increase in general rates for 2026-27, significantly larger increases have been foolishly applied to other sectors of the community.
Bartels argues the real story emerges when the increases are viewed over the full three-year period from 2024 to 2027. During that time, Principal Place of Residence rates have risen by 19.77 per cent, compared with 39.49 per cent for Non-Principal Place of Residence properties, 68.34 per cent for Short-Term Holiday Rentals, 75.16 per cent for Lifestyle, Retirement and RV properties, and a staggering 76.59 per cent for commercial properties located outside Bundaberg CBD.
What a slap in the face to business owners in the wider region.
Councillor Tracey McPhee wisely opposed the increase on Non-Principal Place of Residence properties. She argues that many affected properties are not traditional investment rentals. Some are owned by community housing groups or parents helping adult children enter the market. Others are occupied by family members, held as holiday homes or kept as future building sites.
She also addresses the fallacy that increasing rates on short-term accommodation will improve rental supply, arguing that homelessness and housing stress involve much broader social issues than housing availability alone.
Australia says it needs more housing. If housing supply is the goal, what should the government do?
To answer that question, we must look back to 18th-century France.
The French government’s economy was in serious trouble. Government taxes and burdensome rules were killing the economy. Desperate for relief, a delegation of government officials was sent out to ask what they needed to improve trade and save the economy. After a short time, the businessmen simply replied, “laissez-nous faire” — which in English means “leave us alone.”
Written by John E Middleclass
Published July 2026. Chitchat Newspaper.