Sacrificial lambs,slaughtered in the name of the almighty capitalist banks.
Mish on inflation targeting,

http://globaleconomicanalysis.blogspot.com/

My guess is many young propsective homeowners would rather have a handout which served to reduce their debt, not increase it.

How is the cost of the proposal calculated? Let's say the amount foregone on interest of say 7% per annum on a $10,000 debt over 20 years, that's $14,000 over the term of the interest-free loan.

My bet is most young people would far rather have the amount written off on a student loan or a credit card balance in this economic climate.

As always your comments are very good Kate. As a first home buyer I agree with your last comment. If you're planning on interest free anything- it should be on EXISTING debt.
Further education (those 'sorted' adds are a good start) is a better idea.

Finally- I fail to see how giving first home buyers the loan will kickstart the construction industry.
We are not where the real money is in construction as we can't afford to build.

It is about time for a Capital Gain Tax on property sold before 5 years. There are far too many people involved in this kind of business (Real Estate/ property speculation etc.) and not on real productivity/ manufacturing. No wonder we have inflated property market and fast increasing trade deficits.

Thanks, pjimmy. I've got two kids - 18 months apart in age. The eldest had a student loan for a one-year stint at Polytech - found a job in the technical profession immediate on completion - cohabited with his now wife for three years before marrying - paid off the student loan balance meantime and saved the (then) min 5% deposit on a home mortgage. Bought the house - renovated it - re-sold it in 12 months and banked the $100K capital gain (aside from that which paid for the delayed overseas honeymoon).

They've rented for the subsequent three years - cheaply I might add!

The other son spent three years getting his tertiary education and has only ever been able to do occasional contract work in his field of study. Did contract manual labour (roofing) in the construction industry as alternate employment - not enough regular income to pay any lump sums off the student loan - and had to incur additional living expenses associated with purchasing the tools of the trade, and moving the young family from location to location to get contract work. Student debt still in excess of $20,000, a family of two with a third child on the way. No propsect of home ownership, as has never enjoyed a permanent job - despite three years worth of applications (marine biology - it appears you need to have a Masters or better qualification to have any chance of permanent employment in that field here in NZ - which in itself seems ironic given we are surrounded by sea!). Anyway, main option for his family going forward looks like higher education - back to study - more debt!

Hence, I have first hand expeirence of two very different perspectives of what it is like to be starting out in one's career in NZ.

Oh gawd what a stupid idea.
I suspect Mr Key will bury this in the 'dumb idea bin'.
Evidence suggests National are gaining support with their current budget policies so why would they take a walk down 'Idiot Street"

In my considered view - this is nothing more or less than a beat up by Warwick Quinn and a few of those paying his wages at the Master Builders - that the journos at the Dom Post have unfortunately fallen for. Lets hope they wake up soon - and investigate exactly what is actually going on internally within the Master Builders.

And most importantly - what Warwick Quinn is saying is representive of the broader membership of the members. Most I think would be very pleased to have $40,000 sections they can build houses on - not the nonsense poorly located $200,000 plus sections that are sending them broke.

What tends to happen within these industry organisations - is that a few dominate - those with interests to protect who are petrified of greater competition. I had to constantly deal with this nonsense when I was President of the Property Council In the South Island during the early 1990's.

I had a rule then with those guys - that if what we are advocating doesnt pass the test of being (a) in the wider public interest - and (b) in members interests - then we said NOTHING. Its about time Warwick Quinn of the MBs learnt that lesson.

I would not be a bit surprised if a major merchant or two was behind this as well. It is well known Kiwi bulders are paying over the top for product - in comparison with their Australian counterparts. We need to see a lot more competition in this area as well going forward.

If land supply is openned up in this country - and over a reasonable and realistic time frame - fringe sections to our major metros start heading back towards where they should be - the $40,000 mark - it will of course crerate greater competition within the housing subdivision / construction sector.

Even with our current lousy construction industry performance - if the focus is on fringe land supply - new fringe sections should be available within a reasonable time for around the $80,000 - $100,000 mark. Then - with greater efficiency and proper infrastructure financing arrangements - these should be bought back to around the $40,000 (in 2009 dollars) over the longer term.

Until we start seeing real structural changes on the local urban / domestic front - we will not see this economy recover. Better domestic performance os also a necessary foundation for confidence within our export sector.

So Warwick Quinn and his mates at the Master Builders need to start participating constructively as well.

The collapse in the construction of affordable housing is in a large part due to the changes that Labour's made to the Local Government Act (which are only now being implemented through Council's LTCCPs).

Prior to the change Council's could not charge financial (reserve) contributions of more than 7.5% of the land value (although most threw in a few extra connection fees).

However Labour removed the restriction, to allow other (uncapped) contributions charged at Council discretion.

Many Council's have taken this as a licence to print money. For example Christchurch City Council changed their policy to a flat fee structure so all new sections pay the same fee - about $22,000, with some extra drainage charges depending on what part of the city the section is in.

So it works out that to subdivide a section in one of the poorest areas of Christchurch (Woolston) it'll cost $30,000 DC but in Fendalton it'll cost $22,000. So as a section in Woolston is worth under $100,000 and one in Fendalton is worth $500,000+, then they are charging a 30% tax on the cheapest section and a 4.4% tax on the expensive one.
A 400% iincrease for the poor and a 50% cut for the rich - Labour really knows how to help their constituents!

It's insane but what's more unbelievable is that the flat fee was going to be $30,000 across the city, but because of the collapse in construction in the city they are going to reduce it to the $22,000 mentioned above!

Two things need to be done to turn this around fix the development contributions debacle and get more affordable housing.

1. A pro rata cap on development contributions.

2. A development contributions rebate on brand new stand alone homes under 150m2 total with a sale price under certain limits (say on average $300,000).

Just one point I would like to make to Hugh as I know he advocates zoning as being the major affordability issue. The amount of land zoned for development isn't really the issue, as an example two large (4ha) residential blocks on the outskirts of Christchurch sold (via mortgagee) in the last month. The undeveloped price worked out at about $20-30,000 per section.

If you rezone a large amount of land how does this lower the cost of sections? Rezoning more land might drop the value of the undeveloped block to $10,000 per site, but then it would probably become more valuable as a lifestyle block and therefore not get developed at all.

So extra rezoning on the fringes would have little impact on finished section prices (especially when there is no demand for developing extra sections at the moment anyway).

Development contributions are the major issue preventing affordable housing in the big urban centres.

In defense of at least one Council though. Dunedin City took the opportunity of the changes to the LGA to reduce their DCs to just $300 per section.

We did a small development down there, paying $12,000+GST per undeveloped site (during the boom in a desirable part of the city). But to make a reasonable profit we still needed to sell the sites at $90,000+ even with virtually no DCs, so Hugh suggestions in previous articles that fringe sections could be $40-60,000 seem pretty implausible.

Development Contribution reform is the answer to getting the construction industry moving again.

One final point, Councils often argue that high DCs are needed because previous ratepayers have paid for existing infrastructure and new ratepayers need to pay their share. Consider an average age house (45years) paying average rates ($1200) then in today's dollar terms about $43,500 in rates has been paid on that house since built. With say about 30% of rates paying for capital works. The existing house has only paid $13,000 towards capital expenses, where as the new house is being levied up to $30,000 - this hardly seems user pays - more milk the developer!

Chris J - Your comments are most helpful - and thank you. You certainly illustrate well - the complete circus these Developer Constributions (which they are not - but instead house buyer contributions with margins) have become.

You state -

"We did a small development down there (Dunedin) - paying $12,000 plus GST per undeveloped site (during the boom in a desirable part of the city) - but to make a reasonable profit, we still needed to sell the sites at $90,000+. even with virtually no DCs, so that Hughs suggestions in previous articles that fringe sections could be $40,000 to $60,000 seems pretty implausible."

So the question that needs to be asked is - why cant those $90,000 section / lot prices be replicated on the fringes of Christchurch, Wellington, Tauranga, Hamilton and Auckland - within a reasonable time frame?

There are three major issues you have not expanded on - being (a) how much have residentially zoned RAW fringe land costs fallen to per hectate / section since the peak of the market of the cities I mention above -(b) how much has subdivision contractor pricing come back since the peak - and (c) what do you consider a "reasonable margin" for subdivided sections.

With respect to the 3rd point - you will find within the affordable markets of North America - subdividers in the main deal with production builders - not as occurs in New Zealand where subdividers "market" sections to the wider public to a large extent (who in the main havent got a clue about the component costs of what they are buying).

The production builders in North America are not known for their "benevolence" and commit to purchase large numbers of serviced lot / sections on the fringes at around the $US30,000 mark. This in turn allows the subdividers to finance the projects - and get the physical works underway.

They work on DEVELOPMENT RATIOS of 17 - 23% serviced lot - the balance - the actual house construction. Physical costs per lot / section appear to work out at around $US17,000 per lot / section (massively below ours). Further to this (depending on the area) - varying degrees of the subdivision costs are financed by the Municipal Utility District (MUDs) out on the bond market - and in due course - vested with the adjoining Local Authority.

They are acutely aware also of the optimum size of subdivisions - aroundf 200 to 400 acres is the norm - to get the marketing / cost balance just right. You stated it was a small subdivision you were involved with in Dunedin - likely too small to achieve optimum costs per lot.

We need to recognise too - that much of the "lifestyle block" market has been created by the grossly excessive price of urban lots / sections - and that as increasingly affordable new fringe urban lots come on the market - the demand for this "sprawling" so called lifestyle stuff will reduce substantially and their prices will come back significantly. This is turn will lower the raw land costs for subdividers such as yourself over time as well.

The amusing thing is that this so called lifestyle block market "burns up" around about 375 square kilometres of New Zealand farm land annually - when only about 20 to 30 square kilometres of rural land would be required annually for "normal" subdivisions. I explain this within the article "071111 Lifestyle Block Mythology" - available on my website.

As we know - the "churn rate" on these (planner refugee) lifestyle blocks is far greater than normal urban residential development.

Chris j - I have been pressing the government and industry people here in Australia and New Zealand to get a "Study Tour" underway to a selected affordable North American market - to see what we can learn from the guys there. Indeed that was my major reason for my spending time in Houston mid last year. The Houston guys said they would be delighted to assist us.

Do you think thats a good idea? If so - could you communicate this to Hon Phil Heatley, Minister of Housings office. I really do think we need to get the Australian and New Zealand policy and industry people over there say around mid October.

Once again - thank you for your comments.

The Bank Manager - I have said all along that these reason we have this "housing crisis" is because of the so called "right" in the main - the protectionists wanting welfare cheques and the bureacracies wanting to expand control - the unholy alliance.

What you are advocating in essense is a "property speculators welfare scheme" = because its not the first home buyers who benefit.

The situation in Australia is a fiasco - that the Government there is desperately attempting to figure out ways to wind itself out of. And we have got former PM Howard and former Treasurer Costello to thank for that.

My understanding is that there are around 10,000 a month in Australia getting these grants - and its likely costing Ausrtralian taxpayers about $A170 million a month - at least $2 billion a year. For the simple reason Rudd and his Housing Minister Plibersek havent got the stomack to deal with the States head on - to ensure sufficient land supply and sound infrastructure financing policies.

Australian housing prices are grossly overcooked of course - being the worst in the English speaking world (refer Demographia Housing Survey). I think Queensland is a mini California ij the making - its so bad.

AndrewJ,

re "....Mish on inflation targeting...."

The forming of housing bubbles is what has exposed the "inflation targeting" Emperor's New Clothes like nothing before it.

Don Brash saw this coming in the 1990's, Owen McShane did a submission to Parliament for the Reserve Bank back then, on the RMA and its potential effects on monetary policy. One of the reasons Don Brash got into politics was to try and do something about this.

We really should have taken more notice. But we are having trouble convincing many people even after the event. There has been loose monetary policy and resulting bubbles in the share market before, but it has taken land supply issues to move this problem into the housing market.

In the bubble situation, investment money is diverted from productive capital. The inflation of the house price bubble, through unproductive debt, continues unabated only until the whole market collapses. Raising of base interest rates by the Reserve Banks will only harm business and productivity a lot more than it will slow the housing bubble. The Reserve Bank finds itself "pushing on a string".

Meanwhile, existing house owners use the enormous increases in value of their houses, as security for more borrowing and spending; which leads to artificial increases in some parts of the economy and yet more inflated expectations by some business and government concerning their turnover and revenue. Of course a collapse has to come sooner or later, regardless of whether the finance sector has developed creative new investment instruments or not. Wall Street's creative new investment instruments are being blamed, when those instruments would be perfectly safe if there was not a house price bubble.

New Zealand and other countries that did not have CDO's and CDS's; and had high base interest rates, still had a housing bubble form, and the effects are yet to be fully unwound. We are risking tracking the USA a couple of years behind, as we have had room to move on base interest rates, that is, we will be "business as usual" on housing once again only to collapse in a year or 2 once our bubble reaches its new, low-interest-rate limit.

It is clear that these situations are extremely damaging and yet efforts to combat them, in the absence of changing the land rationing systems, will only lead to further economic distortions and harm. The ideology that prevents changes to the land rationing systems, seems to be the desire to prevent "too much land being covered with houses". But this is anti-human ideology, as humans do need somewhere to live, and there is actually not a lot more "sprawl" required, only one or two percent, to take the pressure off land prices.

There also seems to be a strong desire to avoid the building of "too many houses" which sometimes does happen when there are no restrictions; these occurrences are usually also referred to in the historical literature as "housing bubbles"; which is leading to confusion regarding the housing PRICE bubbles which are the current damaging phenomenon. The economic consequences of building "too many houses", must be very very much less severe than PRICE bubbles, the building of too many houses must come to an end long before there is much damage to the economy; whereas the house price bubbles continue to inflate until they are only stopped by economic collapse.

"Too many houses" also has positive benefits, such as low prices throughout the housing market and greater home ownership that results from that. That is a much wiser way to achieve increased home ownership, than risky mortgage schemes and lump subsidies.

Hugh -according to the Dompost article the Government haven't been considering freeing up planning regulation as a way of boosting housing
Your thoughts???
Have you had any recent correspondence with Phil Heatley that would indicate that the government is seriously looking at zoning?

"The construction industry has collapsed because developers are still trying to sell sections at 2007 prices its got nothing to do with development contributions."

So how much should they be charging? Should they also take a fall in their prices like the rest of the market has (10-20% less than 2007)?

First home buyers are lured or bribed to go for old poor quality houses and end up in paying more than the real worth. The government (even banks or housing socities) may jointly own new houses preferably built on a mass scale. New house construction adds to productivity growth, employment and not the resold old renatl dungeons which get transferred to first home buyers.

Indiankiwi section prices should be around $80-$120,000 (30-50% drop) they are still $180,000. Sections won't sell and new houses won't get built untill prices fall in line with the rest of the market. Also I know for a fact that builders and other related trades are dropping their prices (sometimes as much as 40%) there is alot of competition to get work.

Hugh - we've seen little of substance yet from the government on housing
they were talking about freeing up government land for first home buyers - whats happened to that?
And yes I saw Heatley's statement but where are the actions???

Kieran - your comments are most helpful.

Isnt it incredible just how much things come back in the construction industry from the "bubble pricing" - and we start seeing some sorely needed commercial discipline.

Just imagine where the pricing will be when they become as productive as their counterparts within the affordable United States markets.

To see this happen though - Central and Local Government (Regional hopefully will become just a part of history before long) will need to play their parts - by "allowing" the construction industry to reach its full potential.

And the sooner - the better.

OK Hugh - let's all badger Heatley for action!
I sense - just sense - that the government might be getting all their ducks in a row...they've been pretty impressive in introducing RMA reform
But we need action on housing!!!

JH - thanks for the article link
I've long thought that we should significantly cut back - note, cut back, not totally remove - immigration
Morgan said in the article that stemming the flow of talented kiwis from leaving is more the issue than reducing immigration. However I hold the view that the two are interrelated. If we reduced immigration, then then would be less pressure on housing, housing would come back more in line with fundamentals, and fewer kiwis would feel so desperate as to try and make a living elsewhere

People say we need immigration to meet our employment needs, which is true to an extent. However again its rather chicken and egg, if we had less immigration then property mightn't inflate as much and we might retain more skilled kiwis.

Of course kiwis have and always will move around the globe and long may that continue. However I reckon a decent proportion have moved away from the country because of the cost of living relative to income, especially the cost of housing.

Also, I'm no xenophobe but sometimes I do feel sad when I sit on the bus and I might be the only one of 2-3 people born and bred here.

I see a hook at the end of the 'rod' but not much fish are left to be caught in the property fishing.

As long as the privately owned and controlled central banking network get to write all mortgages into existance out of freshair and loan them out at compounding interest as part of the monetary base, interest free on the first ten thousand is no better than the up front enticements used to con you into credit cards or hire purchase agreements. 1% homeloans on the full amount for first home buyers issued out of our sovereign right public credit facilities as a part means of spending into circulation our own debt free monetary base, now that would be an idea that would go someway to returning our economic sovereignty and prevent us from becoming a colony of the borderless central banking empire.

For those of you that claim the population taking on credit is as much to blame for the debt crisis as the banksters issuing it, that we have not suffered a systemic fraud of enslaving proportions;
http://news.bbc.co.uk/2/hi/business/5029530.stm - UK Banks pushing debt on customers
http://www.scoop.co.nz/stories/PO0708/S00406.htm - NZ banks pushing debt
http://www.alternet.org/workplace/104338/the_debt_trap:_how_banks_push_t... - US banks pushing debt
http://edition.cnn.com/2008/LIVING/personal/09/25/money.pushers/ - US banks pushing debt
http://www.fsunion.org.au/Campaigns/Debt-Stress/Home-Lending-Report-fail...
http://cij.inspiriting.com/?p=412 - Aussie banks pushing debt
http://www.bizjournals.com/sanantonio/stories/2004/05/31/focus6.html - Upfront debt enticements offered by banks
http://www.thepeoplesvoice.org/TPV3/Voices.php/2009/04/09/credit-card-de... - Credit Card Traps

For the full banking fraud;
http://socialcreditorbust.blog.co.nz/
All I beg is that any student of high finance that wants to ensure they took a look behind all the doors, just take 10-15 mins to read the text beside the links in my compilation of favourites, then hopefully for the sake of my children it might tweak your interest enough that you might put aside a bit more of that most precious commodity of time to explore a little further.

Another Debt Free BASED Public Credit funded state housing project, how would that do ya Rod;
toggle down to pdf file one, download file, go to pg 6 pdf, pg 7 in book.
http://www.hnzc.co.nz/hnzc/web/research-&-policy/our-archives/books.htm

Then read how Michael Joseph Savage explained it in plain language;
http://socialcreditorbust.blog.co.nz/reserve%20bank%20funding/

Its been done before in many countries Rob, it can be done again. Supply you work and a 1% first home loan so you could see some light at the end of the tunnel, not feel like a hamster on a wheel.
What to see what a difference that would make, have a fiddle with this awesome loan calculator with graphics;
http://www.drcalculator.com/mortgage/

Stop building new problems and fix the leaky ones NOW!

Migration stats just out:

http://www.stats.govt.nz/NR/rdonlyres/93AC3E6C-1233-4A75-AF41-5287E1112F...

A net gain of permanent migrants in March of 313....a measely net gain, even less than I thought

Sorry Tony Alexander, no chance of a gain of up to 30,000 this year

Hand outs.. be it a free loan whatever, it has and does create a society that takes rather than gives....expects of right , rather than earns.

We have a mentality that has lost the concept, for anything worked for, there is something to be sacrificed...be it time, a hobby, a cell phone , smoking or a flash car.
We live in a time where we expect by right to have our cake and eat it
Yes there are ppl who do need a handout/subsidy, accident victims, elderly and such.

Yes we have 3 children, 2 with families, yes we would like them to be able to own their own homes, but as they state, and the same attitude exists with their peer group..
"WHY, we have a life style, dont want to be tied to mowing lawns, fixing spouting..yet, yes we will get our own home...WHEN WE ARE READY"....
Our older generation are in effect forcing our values onto the next...and it is use who said "up the establishment"

Instead of a free or cheap home loan, sort out the bloated bureaucratic BS it takes to build or modify a home....in effect a cheap home is just to subsidise a bureaucracy out of control...and 10 grand is within cooey of the over changing costs of the bureaucracy.

It was going to cost between $42000 and $48000 in bureaucratic fees to build 2 x 3 bed rooms on the back of our section...and factors like wind, drainage, foundations are not an issue. That is the ave salary in NZ...and bear in mid there are far more ppl well below that than above.
$42000 and $48000 is one hell of a % of the final cost, espec since the land is already damn near freehold.

If one wants something, one will get it, If one doesnt get it, they didnt REALLY want it in the 1st place.
The core part of the issue is we have a population who could be entering the market that has lived on credit and dont have savings....
They are now waking up to this...kiwisaver and such..when the market stabilises in the next couple yrs, there will be a new demand, the punters will have saved, and it is THEN the market will recover due to real demand...and forced demand right now will adversely effect in the long run.

Rod & Chris-J : get in touch with Rodney Hide. As much as we can learn from your personal experiences in the building trade, Rodders (we're cousins) can do something about it. He does welcome correspondence. On a radio show, in February, he commented that he was receiving screeds of input from those in the industry. And that under the mountains of red tape Labour piled on, he was surprised that anyone wanted or managed to get a new house built in this country !

Hugh : you note that the overblown housing market in Queensland compares to that of California USA. So how ethical is it that a well known radio network (Radio Pathetic) continues to run advertising promoting over-priced Queensland apartments to gullible Kiwis ?

Iain Parker, I share your cynicism about banks. I wish you shared my cynicism about the role of politics and legislation and bureaucracy and central banks in the current crisis and the "solutions" that are being suggested by them. Any move towards communism (state ownership) or fascism (state direction of private enterprise) will only make a worse mess.

I was one of the first people to point out that bailout money for the banks was going to be channeled via derivatives to all sorts of unworthy people. This is now getting more and more coverage closer and closer to the mainstream. Definitely time for a taxpayers revolt.

Thomas Sowell recently said most aptly that "stimulus" packages are turning out to be "sedative" packages. As I have said before, promises of government action with taxpayers money merely freezes the economy up, with everyone waiting for their handout instead of doing the best they could to get out of the crisis unaided, AND people and businesses in comparatively sound health do everything to blow it so that they will get their share instead of being made to pay for everyone else via taxes.

This is all closely related to the whole point of this thread. If California had not put up the "development not welcome here" sign 15 years or so ago, the USA would not have anything like the crisis it has on its hands today. I believe that nations will suffer from their own bubbles bursting, and will fail to recover, to the extent that they have land rationing and to the extent that they fail to address this underlying problem. Germany will be one of the first to rebound. They did not have a housing price bubble. The U.K. will be toast until they toss the Town and Country Planning Act out the window.

Hugh Pavletich is working on "Performance Urban Planning" with the best of motives regarding affordability of houses. He probably never dreamed when setting out on this mission a few years ago that it would end up having such important implications for whole economies.

My impression of "Rodders" is that he is very pally with rich developers. I wonder whose side he would be on in say Arrowtown where residents don't want the town to grow any more but Queenstown Lakes ignores them or what his stance may have been regarding the Steamer Wharf development (A Blot on the Bay - North and South Magazine). "Rodders" was very well funded last election Winny (the only nationalist party) had to cheat a bit to get something). A nationalist voice would have added some healthy balance, I think. I heard it wasn't just "Hendo" behind Five Mile? a bigger fish still.

I really really hope NZ doesn't introduce a first home owners grant. I don't think the government can afford it. The aussie govt. can't afford it anymore either, Mr Rudd said the R word today, the books must be looking really bad.

Roger Thompson - re Queensland - it can only be described as a political and commercial circus at the moment. You only have to read this years Demographia Survey to see why.

The Australian economist Christopher Joye in the Business Spectator yesterday is still having nightmares about this years Demographia Survey. Joye obviously doesnt know much about housing - and was the same guy who recommended "shared equity schemes" to the Howard Government some years ago. He is simply all over the place - as the comments illustrate Thankfully - Wendell Cox is responding to it.

Danielle - the silly First Home Loan idea is a lost cause. A dead duck. Warwick Quinn and his protectionist mates at the Master Builders need to stop dreaming. It did a good job when Pieter Burghout was running the place.

Readerrs may be interested in my follow up comment today - to the article on "Build Numbers" I wrote last Friday. I summerize - in response to Matt of Auck post - where the Government needs to be heading in dealing with the Local Government / housing issues

Roger: this is a good blog by steve keen re house prices

http://www.debtdeflation.com/blogs/2009/04/06/steve-keens-debtwatch-no-3...
2009-lies-damned-lies-and-housing-statistics/

Hugh: this is the latest
http://www.news.com.au/perthnow/story/0,21598,25175726-5013240,00.html

Danielle - thanks for drawing our attention to the early March Perth Now article on the First Home Owners Grant situation and thinking - at that point.

The HIA - Housing Industry Association with its 55,000 plus members and annual revenues exceeding $A100 million - has enormous political clout in Australia - and it is pleasing to see that they are advocating it should be terminated.

The Australian Master Builders views would not have any significant influence.

The "fiscal numbers" for the Rudd Government would be looking worse by the week - as is the case here and elsewhere. I suspect these "business welfare schemes" may be drawing to a close - as governments everywhere have more pressing social responsibilities they have to meet.

20.4.09 I wrote:
It is about time for a Capital Gain Tax on property sold before 5 years. There are far too many people involved in this kind of business (Real Estate/ property speculation etc.) and not on real productivity/ manufacturing. No wonder we have inflated property market and fast increasing trade deficits.
---

Listening to today's news there is obviously intention from the government to do so. Fighting speculation and greed should be the target.

Hugh : Sir (ha ha) Joh's folks came to NZ. He was born here. But they popped over to Oz when he was 18 months or so. Thus, I suspect that his Kiwi roots had less to do with his bizarre utterances, than his Sth. Afrikaan heritage. The missus baked world beating pumpkin scones. Which proves that no one is totally daft or irrideemable.

Roger Thompson - re Joh and Flo - thanks for amplifying the history of these two characters.

Danielle - note the statement fromn Australian PM today - that they will "likely" wind back the First Home Owners Grant there end of June. Much good reading on this fiasco out on the web.

It was a great welfare scheme for the Banks and property speculators while it lasted though.

Pity so many young people got conned in to excessive mortgages - but thats Austrtalian politics running true to form - where politicians and the business community hold hands to milk it for all its worth. This is a charactaristic of resourse based economies - which always tend to foster an unhealthy relationship between business and government.

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