Negative gearing should definitely be limited. Maybe 1 property of X dollars per year.

CGT discount is meant to account for inflation. They could change it to be dynamic based on inflation rate each year, but it’s always a balance between simplicity and perfection. People complain when the tax system is too complex and they can’t do their own taxes.

Note that all costs are deducted before CGT discount is applied, which makes it fairer.