It's just a shame Joe Hockey and Tony Abbott seem so intent on ignoring the issue.

The Reserve Bank has become the latest powerful voice to weigh into the always-contested debate about how housing is taxed. In a submission to a parliamentary inquiry, it backed a review of negative gearing, stressing it should be part of a wider discussion about how we tax housing.

With investors driving rapid house price growth in Melbourne and Sydney, the central bank highlighted what many critics of the current policy have been saying for years: the current rules encourage speculation.

In particular, the RBA is concerned about the combination of negative gearing – being able to deduct losses against other types of income – and a 50 per cent discount on capital gains.

Put these two together, and people have an incentive to speculate on property prices, and to do it with plenty of debt.