Like I always say when is the government going to abolish negative gearing !! How about it Tawny ?


Quote:

A SERIES of housing policy flops have conspired to keep would-be homeowners out of the property market at a critical juncture for the nation, a leading economist has warned. In a withering report, economist Saul Eslake says the government policies have served to merely inflate demand for housing while failing to promote the supply of new homes - a key driver of economic growth. He says controversial first-home grants and the tax concessions commonly referred to as "negative gearing" had fuelled housing prices and forced aspiring young buyers to the sidelines. Mr Eslake, chief economist in Australia for Bank of America Merrill Lynch, makes the comments in a personal submission for the Senate Economics References Committee's inquiry into housing affordability. "Although most Australians are ... physically well housed, it can no longer be said that we are, in general, affordably housed," he says. "Cash handouts for first homebuyers have simply added to upward pressure on housing prices, enriching vendors." Governments have been doling out grants to first-time homebuyers for almost half a century, but the home ownership rate has never been higher than in 1961, he says. Mr Eslake calls for the effects of negative gearing - a common tax benefit used by investors - to be diluted. He argues that doing so will not lead to an oft-cited "landlord's strike". Critics of the removal of negative gearing point to its short-lived abolition under the Hawke government in 1986, arguing it led to a surge in rental prices. Mr Eslake says Real Estate Institute of Australia figures show rents only climbed significantly in Sydney and Perth, spurred in those cities by unusually low vacancy rates. Australian Taxation Office figures collated by Mr Eslake show that the nation's 1.8 million landlords collectively lost more than $7.8 billion in net rent in 2010-11. Those loss-making landlords would have cost the nation about $5 billion in lost revenue through their ability to offset the losses against other taxable income, he says. Economists and central bankers have looked to the construction industry to provide much of the heavy lifting as the resources investment boom ends. Mr Eslake's submission, called Australian Housing Policy: 50 Years of Failure, also claims that recent governments have been unable to supply a growing population with adequate housing stock. From 2001-11, the submission claims, stock grew at a slower pace than the population - 15.2 per cent compared with 15.9 per cent - for the first time since the end of World War II. "Average family sizes declined between the early 1960s and the early 1990s, implying that more dwellings are required to accommodate the same number of people," the submission says. An ageing population and rise in family breakdowns are also fuelling the need for more homes, it adds. Mr Eslake, also a member of the National Housing Supply Council, says money saved from the abolition of price-boosting policies could instead directly fund new homes or form an incentive for developers to increasingly promote their more affordable offerings. He was unavailable for further comment yesterday. A Senate spokeswoman said submissions, which can be made until March 25, were released once the committee had taken due time to consider them. The committee will release its report on June 26.

http://www.heraldsun.com.au/business/economist-saul-eslake-slams-housing-policy-failures/story-fni0dcne-1226806222196

That says it all, Bro.

It has become obvious that the entire focus of housing policy is to assist in the enrichment of those with and the impoverishment of those without.

SSDD.

Grappler Truth Teller Feller wrote on Jan 23^rd, 2014 at 11:12am:

That says it all, Bro. It has become obvious that the entire focus of the government is to assist in the enrichment of those with and the impoverishment of those without. SSDD.

I fixed your statement to it is slightly more accurate.

Sir lastnail wrote on Jan 23^rd, 2014 at 10:23am:

chief economist in Australia for Bank of America Merrill Lynch

says it all really .....

Who would work for less than what it cost to cover your rent or mortgage?
Average rent/mortgage in most major economic centres in Australia is over $550 a week and rising at nearly three times the rate that wages are.
We built this country on primary and secondary industry, but today the largest employers of Aussies are in the tertiary (service) industry ( government, retail, finance)
There are plenty of painful examples of large primary and secondary industries employers moving out of Australia.
Government at all levels are looking to privatise as many services as they can in keeping with our constitutional policies. Point to note on that as soon as they do that, the companies that take up these services take as many back of house jobs off shore as they can, Telstra(call centres) Qantas(heavy maintenance) two examples.

I'm sick of popular news sources in Australia sprooking off that rising cost in housing affordability (house prices and rents) is a sign of a improving economy, when 1 business every hour closes down in Australia because of two main reason labour rates and convoluted tax systems.
The cost all things in Australia is on a rapid  because of our struggle to obtain and maintain two of the top ten needs to sustain human life ( shelter and security).
This I believe is a major issue in this country with many follow on effects. The government is left with a shrinking economy and struggles to produce a budget that can cover the cost of running this country and take care of its citizens.
So let's sell off everything that we can to foreign investors make some money drive the dollar through the roof to cover cost for now, and make sure those primary industries can't get up even if the do find a way to deal with the high labour rates and tax system.

Rubin wrote on Jan 23^rd, 2014 at 12:07pm:

Who would work for less than what it cost to cover your rent or mortgage? Average rent/mortgage in most major economic centres in Australia is over $550 a week and rising at nearly three times the rate that wages are. We built this country on primary and secondary industry, but today the largest employers of Aussies are in the tertiary (service) industry ( government, retail, finance) There are plenty of painful examples of large primary and secondary industries employers moving out of Australia. Government at all levels are looking to privatise as many services as they can in keeping with our constitutional policies. Point to note on that as soon as they do that, the companies that take up these services take as many back of house jobs off shore as they can, Telstra(call centres) Qantas(heavy maintenance) two examples. I'm sick of popular news sources in Australia sprooking off that rising cost in housing affordability (house prices and rents) is a sign of a improving economy, when 1 business every hour closes down in Australia because of two main reason labour rates and convoluted tax systems. The cost all things in Australia is on a rapid  because of our struggle to obtain and maintain two of the top ten needs to sustain human life ( shelter and security). This I believe is a major issue in this country with many follow on effects. The government is left with a shrinking economy and struggles to produce a budget that can cover the cost of running this country and take care of its citizens. So let's sell off everything that we can to foreign investors make some money drive the dollar through the roof to cover cost for now, and make sure those primary industries can't get up even if the do find a way to deal with the high labour rates and tax system.

Well put, Rubin... it will always amaze me that governments seem unable to see simple realities, while ordinary people can.

I suppose, like the judiciary, they exist on a different plane and have no real idea.

John Smith wrote on Jan 23^rd, 2014 at 12:00pm:

Sir lastnail wrote on Jan 23rd, 2014 at 10:23am: chief economist in Australia for Bank of America Merrill Lynch says it all really .....

Got that right Smithy ... Merril Lynch ;D had a big had in the "sub prime" scandal leading to the GFC ...... so The Bank of America save their arzes bail/buy them out ... & continue to trade with that name.

The whole executive should be in jail >:(

I wonder if this bloke worked for them prior to the GFC?

Gnads wrote on Jan 23^rd, 2014 at 5:14pm:

John Smith wrote on Jan 23rd, 2014 at 12:00pm: Sir lastnail wrote on Jan 23rd, 2014 at 10:23am: chief economist in Australia for Bank of America Merrill Lynch says it all really ..... Got that right Smithy ... Merril Lynch ;D had a big had in the "sub prime" scandal leading to the GFC ...... so The Bank of America save their arzes bail/buy them out ... & continue to trade with that name. The whole executive should be in jail >:( I wonder if this bloke worked for them prior to the GFC?

So they know at first hand the pitfalls of blowing up a property bubble :(

In any event what about his point of getting rid of negative gearing and gimmicky first home buyers scams which just inflate prices and put money in the pockets of wheelers and dealers at the expense of owner occupiers ?

Sir lastnail wrote on Jan 23^rd, 2014 at 10:51pm:

what about his point of getting rid of negative gearing and gimmicky first home buyers scams

What about it? He's just a typical yanks who thinks everyone else in every other country should do everything the same way they do in America ...

John Smith wrote on Jan 23^rd, 2014 at 10:58pm:

Sir lastnail wrote on Jan 23rd, 2014 at 10:51pm: what about his point of getting rid of negative gearing and gimmicky first home buyers scams What about it? He's just a typical yanks who thinks everyone else in every other country should do everything the same way they do in America ...

what do you mean like giving tax concessions to owner occupiers instead of exclusively to house hoarders like they do here ?

wouldn't that be a crying shame if they followed the US down that path :(

Sir lastnail wrote on Jan 24^th, 2014 at 2:21pm:

what do you mean like giving tax concessions to owner occupiers instead of exclusively to house hoarders like they do here ? wouldn't that be a crying shame if they followed the US down that path :(

Good point, Nail.  On the one hand there is a wailing and a g-nashing of teeth over low owner occupancy rates, on the other hand there are never-ending handouts to property speculators, hoarders,queue jumpers and so forth.

But the prime culprits are the banks who lend on the assumption that value will increase constantly for thirty years of a mortgage, and who lend on the basis of speculative future equity in both the owned home and the prospective purchase home.

During the Cultural Revolution in China, the Gang of Four and other Ultra-Leftists listed nine categories of political-social undesirables.   

The Line-up of the undesirables was:- 

landlords,
rich peasants,
counter-revolutionaries,
moral degenerates,
rightists,
renegades,
enemy agents,
capitalist roaders,
intellectuals.


(what will the OzPolitic Cultural Revolution unearth here?)...

Sir lastnail wrote on Jan 24^th, 2014 at 2:21pm:

what do you mean like giving tax concessions to owner occupiers instead of exclusively to house hoarders like they do here ?

I have no problem with that ..... petition for it, I'll be your first signature .. .

John Smith wrote on Jan 24^th, 2014 at 6:23pm:

Sir lastnail wrote on Jan 24th, 2014 at 2:21pm: what do you mean like giving tax concessions to owner occupiers instead of exclusively to house hoarders like they do here ? I have no problem with that ..... petition for it, I'll be your first signature .. .

petition all you like !! As if the government is going to help out the battler with their right to a basic roof over their head :( Honestly these governments would enter a one legged man in an arse kicking competition and then offer him a pair of shoes to help out :(

Sir lastnail wrote on Jan 24^th, 2014 at 10:49pm:

John Smith wrote on Jan 24th, 2014 at 6:23pm: Sir lastnail wrote on Jan 24th, 2014 at 2:21pm: what do you mean like giving tax concessions to owner occupiers instead of exclusively to house hoarders like they do here ? I have no problem with that ..... petition for it, I'll be your first signature .. . petition all you like !! As if the government is going to help out the battler with their right to a basic roof over their head :( Honestly these governments would enter a one legged man in an arse kicking competition and then offer him a pair of shoes to help out :(

you can do nothing, or you can do something .... bitching about it on a forum is not doing something, the choice is yours.

Get enough signatures and the govt. will be forced to do something. It should be easy, I don't forsee a single home owner that wouldn't sign it