Negative Gearing: A tax perk or good policy?

Negative gearing has been in the spot light as part of the Government’s “Australia’s Future Tax System” review.  This controversial discussion rears its head every few years when the two sides clash: one claiming it disadvantages first home buyers, the other saying it provides vital rental housing.
What is negative gearing and what benefits does it provide to tenants, investors and the Government?
Negative gearing is the situation where a rental property costs more to own than it generates in …