I think the only thing left out was "Tweedle-Steve".

Drawing spurious comparisons between Oz and US economies can hardly provide us with any basis for determining either where our Oz economy may have been going wrong before or during the GFC, or since, or what in consequence may be the right way forward. Why not compare us with Ireland, or Greece, or China? Equally non-representative, equally of little or no relevance.

Government debt can only drive a part of the economy (unless you want to bring in another red herring, of a dictatorship or communist state), and private debt (and investment) another part. Both mechanisms should optimally be working in concert - to drive industry, jobs, living standards, and wealth. Both levels of debt also need to be constrained within reasonable limits - or there is forever an inevitable procession of boom and bust cycles. Can anyone deny that rampant debt, greed and deception, lead by the US, fueled the GFC? We were lucky because we had a surplus, low and manageable private debt, and a robust economy and banking system.

The author's over-the-top suggestions (brought rather brusquely out of left field I might add), to "revitalise" our continuing relatively healthy economy are:
. Limit the First Home Vendors Grant to new housing only;

. Limit new Negative Gearing to new housing only; and

. Bring the capital gains tax rate back into alignment with the income tax rate.

Point 1: ("Clever" use of Vendor instead of Buyer here). Might induce more new housing, but Would make it more expensive (with bigger debts) for new home buyers. How could this help anything?

Point 2: This would principally act to remove many investors from the housing market, and put this program in the hands of developers - further increasing the mean cost of housing.

Point 3: Taxing a gain made over many years as though gained in the year of realisation of that gain (by sale of the asset) is demonstrably unfair and punitive.

We need vision and honesty in both public and private investment, not band aids for non-existent deficiencies.

genuine private enterprise investment,currently outside the square where green labor dwell.

Australia's housing collapse is well underway and property prices are declining fast. The majority of Aussies live in a financial world they neither understand completely nor gain from in any tangible way. The reality is property speculators damned themselves by jacking up the price of low quality fibro housing using record debt and dual wages, a way of life that's ingrained in society now when every sucker out there is convinced home prices can't ever fall. Read the willy commentary and claims from the bulls on discussion sites like Somersoft Property Forum http://australianpropertyforum.com/blog/main/3221465 to comprehend just how engrained the belief is that "property can only go up".

Australians have an abysmal track record in the real estate market. Germans have a better model that operates fairly and equally, and is the envy of most Europe but the politicians there still have to foot the bill for banking bailouts. The moral is nobody wins from crazy home price inflation, and many first home buyers are locked out of the market so something has to give, and soon.

Matt Cooper
http://australianpropertyforum.com/blog/main/3489065
Australian Property Monitors