Ross Gittins eviscerates the Liberal party's reliance upon the housing bubble in today's SMH. Just as persistent unemployment and fiscal looseness undid the Labor party back in 1996, the doom spreading in the property market at the moment will probably undo the Libs at some point and hopefully give a more realistic picture of their fiscal competence. The current situation is a result of a popped asset-price bubble that has been exacerbated by two federal government policies - the first homeowner's grant and negative gearing. These two policies essentially stimulated the housing market beyond what was acceptable.
The whole idea of being fiscally responsible and being concerned with economic neoliberalism means that the government should really butt out of certain industries. The coalition have not done this with the housing market - they interfered with it by throwing money in its direction and caused a bubble to form. While the bubble expanded, the beneficiaries voted for the coalition. Now that it has popped, the reputation of the coalition as good economic managers will be severely questioned.
In the bad old days, the ALP used to gain votes by throwing money at certain industries so that blue collar people think their elected officials actually cared (which of course they didn't). The same can be said about the Howard government's policy of boosting the housing market.
My solution? Demarchy.