Monday, March 23, 2009

A light through the FHOG (or: Down with the Boost)

In a couple of recent posts, I have grumbled about the First Home Owners Grant (FHOG) and, especially, the First Home Owners Boost.

These criticisms have been rather incidental to other issues of concern here at the Tenants' Union; for a more sustained discussion, please head over to Steve Keen's Debtwatch blog, where Steve has just posted his analysis of the FHOG. It's devastating; I commend it to readers of the Brown Couch.

And if you can't make it to the sustained discussion, I'll offer just a couple of things you might add to your own thinking on the subject:
  • prospective first home buyers: is it really such a good idea to borrow a lot of money to buy an overpriced asset at the start of a recession? Does an extra $7 000 or $14 000 really make it any better an idea?
  • Housing Ministers: is it really fair to use first home buyers to try to prop up overinflated house prices? Leaving aside fairness – how can it actually work?


(Down with the Boost!)

2 comments:

  1. Great post. I think history will judge the current first home buyers grant to be at best wreckless and at worst deliberate exploitation. We suffer a severe shortage of new residential blocks at prices comparable to what our parents and grandparents enjoyed. Our state and federal governments are clearly more interested in protecting the asset prices of those old enough to have houses - at the expense of the younger voters. This is tantamount to generational theft, and on a scale far more obnoxious than the environmental tab our parents are leaving us. If nothing is done, I suspect a massive politcal backlash in the next election. How many under 40 year olds would vote for a well organised "Affordable housing party"???

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  2. It would be a sad irony, Anon, if the present federal government, which came to office with (I believe) sincere concerns about housing affordability and much-welcomed new policies for dealing with the problem, should be sunk because of the FHOG and Boost. And they are running that risk.

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