In today's Herald:
Under the Howard government house prices reached unsustainable levels, exacerbated by the first-home owners grant and negative gearing - both designed to help people buy houses, but which ended up overheating the market.
To be sure, unsustainable house prices are a global problem and Australia is no exception. Nevertheless it is essential that government at all levels follow common sense policies to cool down the housing market.
The Rudd Government's decision to offer tax breaks to first-home buyers is, sadly, another attempt to curry favour among home owners while pursuing inflationary policies.
Government should have no business either helping or hindering the housing market through subsidies and tax dodges. If Mr Rudd wants to give back some of the surplus, he should raise the tax-free threshold by a modest amount, rather than throwing money at a market that is heading for a meltdown.
Neil Cameron Waratah
The bit that is struck through was a part of the letter that did not get published. Now I look like someone who thinks that Australia's housing problem is not part of the global problem. Oh well.
5 comments:
"Government should have no business either helping or hindering the housing market through subsidies and tax dodges."
I like this part.
I'll apply the reverse and suggest that house buyers should have no business in helping or hindering the Government through payment of Stamp Duty and other such levies.
Well, we all gotta pay taxes.
Or maybe not.
Neil - I feel your pain regarding editing of one's letters. I had a letter written and published in our local paper wherein they had misquoted my thoroughly researched statistics on the percentage of arable land in a certain African country. They misprinted it by a factor of 10. I wrote to them again and asked them to please print a correction. So they did but inserted the word not in front of the word "arable".
So much for professional journalism. It taught me that not everyone who appears a crank in the op-ed pages is one. They may be merely the victim of professional journalism.
The Rudd Government's decision to offer tax breaks to first-home buyers is, sadly, another attempt to curry favour among home owners while pursuing inflationary policies.
Yep - the last thing we need is for people to be encouraged to spend more at the moment. This policy has nothing at all to do with sound economics.
All of this said, what would you say to a policy that gives tax breaks to first home buyers, but only in particular suburbs (that is, those who buy outside a predetermined radius outside of the CBD in each state) and only under a certain price? Maybe this might encourage people not to live (so far) above their means and encourage infrastructure outside of trendy areas.
I think that idea would be very difficult to implement David - so much red tape in order to determine whether a person lives in the right area or not.
But I understand your reasoning - to bring about more equity across socio-economic barriers and to help the poor by redistributing wealth their way.
Poor people will always live in cheap suburbs. Rather than fiddle around with the housing market, I would just want to send more money their way, somehow.
Post a Comment