From the New Zealand Business Day:
Australia unveils A$10.4b stimulus plan
The housing sector is a major beneficiary. The Government will triple to $21,000 the current $7,000 first-home buyers grant for people buying a newly constructed home. Those first-home buyers moving into existing properties will receive a doubling of the allowance to $14,000. The plan is "designed to support activity in the housing sector and the housing sector is critical to the economy overall," Mr Rudd said.
How long will it be 'til those geniuses that we call a government try something like this over here?
Via The Clunking Fist.
A grim document
6 hours ago
3 comments:
Australia has expensive housing because it has a shortage of land - well land zoned for building. This seems to be another example of government providing subsidy to reduce the damage caused by government regulation rather than reducing regulatory cost.
http://a-place-to-stand.blogspot.com/2006/08/land-shortage-in-australia-pushing-up.html
NC, you are the expert on planning reg's, but the point is that having pushed up land values via restrictions on supply, cash bungs to FTB's do not ameliorate this; they actually push selling prices up even further.
If LVT is the least-bad tax, then subsidies for land/property are the worst subsidies.
So, having distorted the efficient allocation of capital by losing control of the money supply and then underpricing the money and also offering subsidies - a transfer payment from other taxpayers and homeowners - they want to fix the problem by offering tax transfer subsidies to buyers to enable them to buy overpriced houses the construction of which was made possible by the misallocation of capital from underpriced and oversupplied money in effect transfer payments.....one of us is going mad. I am beginning to worry that it might be me.
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