the troubadour

Well not practically. It is a further impost on the poor and impacts spending. While the rich may not be able to wriggle out of paying the increase, it disproportionately impacts on low earners.


Reduced income tax to business I suppose you mean? While I support concessions for small business, corporates and the rich will just add to their substantial wealth. Their is only marginal improvement in hiring labour with tax cuts. Usually further incentive required to make a difference such as subsidised by the tax payer labour. Already planned in $4 jobs for youth. Doesn't for the most part do much either.


Next you'll be claiming the 'trickle down' effect really works. The better solution being of course lift up the bottom to allow more money to flow and greater participation in the economy levels.

the troubadour

There's been no socialist governments in Australia for a very long time. The stimulus package persuade being of course orthodox capitalist policy of a particular school of thought as a means to maintain the economy during a crisis.


As for PT the question should be can Perth and Australian cities do without massively improved public transport?
We are lagging behind much of the world and with the massive developing world population growth being experienced over the past several plus years things are only deteriorating at a rate of knots.

Beoz

Just google "wage growth Australia". Plenty of info there.

Amazulu

Wages still growing albeit very slowly

Supply/demand for labour at work - economics 101

Beoz

I agree. Its the cheap money that's created this monster.

For a minute it looked like banks were seeing the risk and sending the interest rates in the other direction. Just read today that Westpac have seen such a decline in investor lending that they are dropping the required 20% deposit back to 10%.

If you go on to a mortgage calculator and see what a 2% rise does to your repayments its a disaster in the making.

Government's could be making it more risk secure for investors by slugging a fee on existing property purchases, encourage them to invest in the masses of new developments about to hit the market, and pass that fee back to the FBH.

Change the skew of owner type.

In due course when interest rates do rise, pull the fee to encourage investment.

Amazulu

I think that many see scrapping NG as a solution to high house prices

It would be a panacea only - plenty of factors in play

Beoz

Rents have remained stable because interest rates have lowered and there's lots of rental stock on the market.

But if interest rates rise even 1%..... well here is currently what an average price house in Sydney costs to startup and service.

Average House Price Sydney $1,000,000

Deposit $200,000 = 20% + $50,000 extras = $250,000 to start with.

Over a 30 year mortgage at 3.85% PI = $3,750.47 per month

Over a 30 year mortgage at 4.85% PI = $4,221.53 per month

On that perhaps NG is needed otherwise this is going to be passed back to the tenant or we have mass defaults.

Ouch

bcworld

Not sure about defaults when any proposal I have seen that involves changing NG fully grandfathers existing arrangements - no one is having NG removed from their existing investment property. Meanwhile a plan that offers future NG on only new builds would seem likely to encourage the building of new housing stock...although people will want be careful with off the plan apartments for sure!

Beoz

In reference to an interest rate rise. NG provides that safety net moving forward.

Don't get me wrong. I'm no fan of the cost NG has on the coffers.

But what's the plan for the first home buyer? They can't afford where the prices are today. Labors plan isn't going to cause a crash which is what FBH need to get into the market. Seems like we have no plan all round.

Back to the Robin Hood theory I think.

the troubadour

Ouch indeed. A recipe for disaster in the making. Can anyone, even on a higher rate with all the other surrounding costs really afford such outlays. Or even more to the point want to? Mind boggling stuff indeed.

the troubadour

It is sadly becoming obviously clear that there is no plan en train. Further interest rate cuts perhaps. A thoroughly failed and deeply flawed reaction to events rather putting more wood on the fire than seeking remedies that may create the least casualties or at least the pain is bearable rather than fatal.


These guys are rewarded so much and fail to deliver. Truly staggering in incompetence all around.

the troubadour

There are no plans to end NG. Too much a political hot potato. Although I feel it should be slowly reigned in over an extended period of time. To much politicians are beholden to the scheme themselves, besides the industry political donations and influence remains extensive.


Turnbull and Hockey have clearly stated the undesirability of NG on public record. What is uttered in public and the thinking in reality are separate things of course.


Just points to the ridiculous nature of the politics are forced to endure from all the main fronts. Little honesty nor concern for the well being of the nation at all. Short termism as usual wins the day in Australian politics.


I hope the time will come when those so termed decision makers are called upon to answer for what they have fostered on the people and the outcomes of those decisions.

the troubadour

Obviously there is more at play. The doling out of cheap money to punters, some ill able to afford such loans, even made up earnings to meet approval.


Reminds me of Greece a little. The time will come to pay the piper. All too many don't realise a lot of the difficulty will come from abroad where most the funds are borrowed to cover mortgages, if rates charged are increased to Australian banks.

bcworld

I'm not sure what to make of what you're saying. Are you saying that NG (taxpayers' money) SHOULD be used as a get out of jail card for people who make poor financial or investment decisions? Say like this real estate hero...if he buys one too many he should be bailed out by the taxpayer? Your repayment figures for your Sydney example are way too high by the way...most investors are interest only because their money man has told them they can't go wrong, 'property doubles every 7 years' etc!

Beoz

Are you saying that the whole property market, that Australians have heavily invested in due to reasons such as NG, right or wrongly, should be exposed to a crash?

Yes NG rewards bad investing but we are in a pickle now. Cheap money, heavily in debt, it needs very careful treading.

My figures are bang on for a first home buyer which is what those figures were intended to demonstrate. Heavily in debt every day people running the risks of rate rises.