"Now there's an idea - if you are really concerned about ballooning house prices you'd have to agree that the govt should cut back on the tax breaks for negative gearing and use that money to fund flood recovery. Kill two birds with one stone."
I didn't realise there were still people in Australia with the delusional belief that investors cause house price increases...Good grief. Hello, um, even Paul Keating (Labor) figured out that were any tax advantages for investors removed from the housing sector there would be no pool of houses left for those that could not afford a mortgage, they would all be on the street. Remember how he back pedalled at 100 mile an hour when he tried that trick and saw the result!
The Government cannot afford and would not buy enough houses to house renters full stop. They need investors to supply the pool of rental accomodation and the only way to do that is by creating incentives by way of tax breaks. That way they have money to spend on other things like Hospitals, and Defence, and themselves!
House prices are kept inflated by the banking sector, if not we would be looking at a collapse like the US as Australian Banks have excessive exposure to home mortgages and cannot let values fall, or they just may become insolvent. That is less assetts than liabilities. Wayne Swan.........Treasurer....hahaha, what a joke.
