We live in a country with probably more space per capita than almost any other country in the world and yet our home prices are at the top of the price list. There has to be a number of reasons behind this such as a lack of employment opportunities outside our capital cities, government's failing to release sufficient land for the population in cities even though it is there, bank's preferring to lend money to home buyers (to anyone willing to have a crack at buying a home) rather than to potential entrepreneurs, those who have developed a product, but require considerable funding to get it to a profitable stage businesses etc.
Negative gearing should only go to those willing to invest in new property, as new property works a bit like a new car in that it loses considerable value as soon as the key is turned by the new owner. Surely a positively geared property is a better investment than one which is designed to work at a loss in order to reduce one's tax burden.
If negative gearing goes then surely the lower end of the market will fall to more realistic levels, thus enabling more of the younger generation to get a start in establishing a stable future for themselves and their families.
My niece and her husband both have high paying jobs and three children under 4 years of age. Just prior to the birth of the first child they purchased a tiny, old house in Kingsford (same suburb as UNSW). My brother who lives in the Southern Highlands could not believe that they paid a million dollars, but that is 'all they could afford' and with not much to show for the outlay either. Prices at the lower end of the market have continued to rise so that now 2 bed fibro's on the Northern Beaches can bring as much as a million and yet the higher you go the greater the bang for your buck (exponentially so) - 2 million will get you something really nice with water views. Seems most people are still stuck at the bottom of the heap in terms of the quality of their housing and we can all thank the continuing drop in real wages over the last 30 or so years, which is now moving into acceleration, despite the never ending increase in the basic cost of living.
When the bottom drops out from under the 'working class's it stands to reason that the middle class comes next and inevitably everyone in the country. The only ones to gain by the move to globalisation are the world's oligarchs and their crony bureaucratic and political allies. The only positive may appear to be the possibility that multinationals will no longer be able to hide their profits in tax havens, but no doubt they will find a way around it.
How can we, 'The People', compete with this:
"Corporations have captured every major institution, including the judicial, legislative and executive branches of government, and deformed them to exclusively serve the demands of the market. They have, in the process, demolished civil society. Karl Polanyi in “The Great Transformation” warned that without heavy government regulation and oversight, unfettered and unregulated capitalism degenerates into a Mafia capitalism and a Mafia political system. A self-regulating market, Polanyi writes, turns human beings and the natural environment into commodities. This ensures the destruction of both society and the natural environment. The ecosystem and human beings become objects whose worth is determined solely by the market. They are exploited until exhaustion or collapse occurs. A society that no longer recognizes that the natural world and life have a sacred dimension, an intrinsic value beyond monetary value, commits collective suicide. Such societies cannibalize themselves. This is what we are undergoing. Literally.
As in every totalitarian state, the first victims are the vulnerable..."
