Why is this a problem?
LAFHA is a Commonwealth allowance. Using an allowance for profit may breach s44 of the Australian Constitution. How does an MP or Senator profit, negative gearing with the allowance? They can profit two ways, the first is indisputable paying money on a mortgage increases equity. The second way is via a capital gain. I've asked a couple of people in the legal profession regards this theory & both believe it may be a problem for the politicians doing it.
This is one of the reasons I believe a full an independent audit of all federal MPs & Senators is warranted.
Our federal politicians have proven since election 2016 they don't take s44(i-v) seriously we have had 7 ruled ineligible & now the Senate President has come forward & said he may be a British citizen. Many of our federal MPs have clandestine investments including our Prime Minister. Without an audit, it is not possible to see if they hold a financial interest in any companies with Commonwealth contracts. One Senator does & refuses to budge.