A response to Judith Sloan supporting negative gearing in, “Doomsayers ignore the facts when picking targets.”

Imagine you are the new CEO of a successful Australian media organisation that is merely a subsidiary of a larger international parent. New to your role, you are spending time with the various editors. During your conversations with these editors, you have discovered that they all believe making a profit is a bad thing.

Each editor believes that it is better to make a loss, because then the loss from their division can be claimed as a deduction by the parent company against the profits made by the parent company.

Bemused, over time you prod deeper at this view, but to your dismay, you quickly learn this view they hold is not some whimsical buzzword that will disappear into the ether in a few months time, it is a firmly held principle. Profits are bad, losing money is good.

So you attempt to reason with them.

Despite doing your best, they counter with:

“But the parent company can borrow to cover the loss from our division and the interest on that loan is actually income for the bank lending the money.”

“By losing money selling our newspapers and magazines we are effectively helping to educate the poor who wouldn’t be able to afford our product otherwise.

“Lots of smaller media organisations are also losing money, it’s not just us.”

What would you do?

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The above letter to the editor was sent to [email protected] at 8:44pm on the 8th of July 2014.

Image above from Club Troppo.

Note: I did a quick check on the ATO website and couldn’t see any problem with what Judith was saying on super in her article.