When the negative gearing changes were discussed before the last election the mantra of the LNP was that lots of people with middle incomes had negatively geared properties and it wasn't just rich people. I wrote to my local member (who happens to be the Treasurer) and suggested that they should put a dollar limit on interest deductions. So instead of saying it's one property only (someone could have a $2 million loan on a Noosa Heads beach front as an example) say that interest on loans up to a limit can be deducted ( say $500k or something like that). I never got a reply !Best way to raise revenue is to get rid of middle class welfare. That includes CGT discounts and franking credits, child allowances for people who don't need it.
Then the big elephant in the room, negative gearing. While I understand the concept, it's being abused in the residential home market. Lock negative gearing into a single asset. Don't allow loss making on one property offset profits from another.
But doing the above is a certain recipe for a lost election, unless some unholy alliance between the 2 major parties occur, but that's getting less and less likely every day.
I am not against franking credits because all they are in the end are making sure dividends aren't taxed in total above the individual tax payer's marginal tax rate but what I am against are the changes made by Howard/Costello which allowed cash refunds of franking credits. All they do is reverse all or part of the company tax paid on the underlying profits from which the dividends are paid and that is fundamentally wrong.
There has to be a transition period on these things however because there needs to be time to adapt.