The Taxman targets 400,000 on rorts

This appeared in Melbourne’s the Age this morning.

quote:

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…. In 2001, 6.7 million people claimed $8.8 billion worth of work-related expenses, an increase of nearly 11 per cent on the previous year. At the same time, 1.3 million taxpayers declared income from rental properties of $12.6 billion, yet claimed expenses on those properties of $13.3 billion.

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http://www.theage.com.au/articles/2002/12/11/1039379883523.html

The last line stands out to me the most.
What are your thoughts?

What do you think caused this apparent loss?
What does it say about the current property investing market? 1.3 million out of around 18 million people in australia own at least one rental property – and of those, most are negative geared?
Will the federal government always be bankrolling loss-making property?

~Brent