Senin, 02 Februari 2009

Stim city

The Federal Government has just announced its second stimulus package, which includes $6.6 billion for the construction of 20 000 new social housing dwellings.

In doing so, it gets it right where the first stimulus package got it very wrong.

The new money for social housing provides work for builders and other tradespersons, and we get a serious amount of new housing that stays affordable. Excellent!

Contrast those outcomes to the first package's boost to the First Home Owners Grant: an inducement to first home buyers to keep spending too much on housing. It will eventually fail in its intended outcome - to keep house prices high - but not before these first-time buyers have borrowed a lot and handed it all (plus the grant) over to the seller. (I wonder how much thanks these buyers will give the Government in 12 months time, as prices fall further.)

Anyway, a round of applause for today's announcement. Well done!