all housing in an area, so when planning laws that implemented land rationing severely drove up the cost of new homes, all other homes followed suit. Influence of tax system The Reserve Bank of Australia has noted that there are "a number of areas in which the taxation treatment in Australia is more favourable to investors than is the case in other countries." The main tax incentives include tax deductions for losses on investment properties, even those that have been negatively geared, and the 50% discount on capital gains on sale of investments properties. Investors using their superannuation for property investments have a tax advantage compared to 'savers' who are effectively taxed up to 45% (the top marginal taxation rate) on income from bank interest or bonds, as superannuation contributions are normally only taxed at around 15%. The list of tax payer funded supports to the property market are numerous Federal Capital Gains Discount Negative Gearing Aged Pension Asset Test exclusion of Principle Home First Home Super Scheme (Discounted Tax Treatment of Voluntary Contributions) State Stamp Duty Discounts First Home Owner Stamp Duty Exemption Land tax option alternative to Stamp Duty Temporary supports HomeBuilder (Federal) - originally budgeted at $680m, estimated actual cost over $2 billion due to oversubscription Influence of banking system The influence of interest rates and banking policy on property prices has been noted. The financial deregulation has led to greater availability of credit and a variety of financial products and options. Presently the Reserve Bank of Australia has maintained for some time a low cash interest rate policy which has also reduced the cost of financing property purchase. In addition, the easy availability of interest-only loans has also made possible for property investors to borrow to purchase a property and compounding the benefits of negative gearing. Housing costs excluded from the CPI One of the market distortions in the housing market relates to the calculation of the Consumer Price Index [CPI], a key metric the RBA uses to make fiscal policy decisions such as setting interest rates. One senior economist noted "The index ignores price changes in the single biggest purchase a person (or household) is likely to make in their lifetime – a dwelling″. This implies that Australia's main official cost of living measure is failing to represent actual living costs, particularly for younger Australians who may incur substantial costs of purchasing a home. Immigration