Damien

As you write in your article
"A co-ordinated land release program could have begun with the states; aggressive rezoning to higher density could have been forced on the states. A vendor tax could have been introduced to discourage speculation; money from the bursting Federal budget could have gone to the states on a per new house basis to remove charges and levies that have ballooned to well over $100,000 in some cases."

Planning is a State government issue, ways that states can reduce property prices are as follows:
the states could have made more land available;
the state can re-zone land from previous industrial and commercial;
the states often take up to 2 years to approve any re-zoning
States can lower their levies and taxes.

However the state did not do it because they are getting record revenue from charges and levies because house prices had gone up.

Costello and Howard got a promise from the state that Stamp duty would be removed from housing, when they agreed to the GST, it is the States who backed out of the agreement.

A vendor tax? In one sentence you are advocating another tax on housings, and the next you are saying taxes should be reduces to increase affordability? The NSW gov tried a vendor tax, the tax end up being passed onto the buyers, therefore increasing cost of the property, it was a disaster.

Please place blame where it is warranted, the State Government had enjoyed record revenue the property boom, even through they promised the Federal Government in 1999, that those taxes will be removed by 2004. The states did not planned in advance to increase availability of housing, the state government make it expensive and time consuming for a developer to apply for re-zoning. To blame all this on the Federal Government, when the State Government are enjoying and wasting record revenue is highly unfair

There must be few people more tired of Peter Costello's vociferous posturing than I am.
Australia has enjoyed a resources boom without parallel for ten to twelve years with the country awash with money. The Howard government flogged off public assets left, right, and centre whilst introducing a skewed GST that also flooded federal coffers with cash. Throughout that time hardly a government project of note was introduced, despite the desperate need for many such projects. And yet, Mr Costello loudly and frequently claims credit for leaving a surplus. To not have done so would have been an example of incompetence that even Costello supporters would have had to admit. A budget surplus under such conditions is a more than reasonable expectation - it is surely inevitable. Mr Costello simply did his job, and was well paid for doing so.

Prices are determined by supply and demand.

Costello increased demand by making people wealthier, and the labor states strangled supply by restricting development.

A sure fire recipe for increasing prices.

Rudd by making people poorer will surely reduce house prices.

As evidenced by his Press Club song and dance and his recent TV appearances Costello truly believes he has “paid off Labor’s debt” (acquired during a period of international recession, incidentally) all by himself.

Ahem. The best terms of trade in our history and some $250b of assets sales in fact resulted in a reduction of that debt from $96b to $50b according to the Australian Taxation Office.

“Total Treasury Bond issuance during 2008-09 will be $5.3 billion, while scheduled
maturities during this period, net of Australian Government holdings, will be $5.1 billion. As a result, the total stock of fixed coupon Treasury Bonds on issue, net of Australian Government holdings, will be around $49.6 billion as at 30 June 2009.”

http://www.ato.gov.au/budget/2008-09/content/bp1/downloads/bp1_bst7.pdf
Treasury bonds = Debt.

He also refuses to acknowledge any responsibility for the $620b of private overseas debt that helped finance the store and bank credit fuelled ‘miracle’ economy of which he is so proud.

Damien has tunnel vision.Punishing developers?It was the State Labor Govts greed that destroyed the housing market.37% of a house/land package is made up of state taxes.They limited the supply of land to maximise their profits.Federal Labour left us with debt 12 yrs ago of $90 billion.The liberals payed this off,put $90 billion in the future fund and left the Rudd Govt with surplus of $20 billion.Why would anyone give money to State Labor Govts to urinate against the wall?They are the ones primarily responsible for infrastructure!

What sort of a mess would we be in now if Federal Labor had been in power for the last 12 yrs?Just look ot our State Labor Govts,they are the breeding grounds for what we get in Canberra.

Mate, just leave the statement as "The Howard government did nothing" and you'd be pretty right.

Except scare people and bribe people that is.

Another warning sign of housing price bubbles is the number of new loans created to buy "old houses" versus the number of new loans to buy a new dwelling. When we create a loan to purchase an existing asset that does not increase the supply of assets it creates debt and gives someone some money to spend elsewhere - probably on conspicuous consumption.

When we build a new house we create a new asset. The problem can be solved by not allowing banks to give loans for "old houses" unless the money is already on deposit. Take away the privilege given to the major banks where they can create loans for old assets before there is money on deposit. Only allow them to create loans without money on deposit for the construction of new assets and require the interest rate on new money to be zero plus the banks margin.

Over the past few years 90% of the 20 billion dollars per month of new loans have been for old houses. It is a miracle that we are as well off as we are. The only reason is that we have been fortunate to have enough money from selling resources to fund the increase in house prices. How much better we would be if the money had built new houses, built renewable energy plants, saved the Murray, etc.

It can be fixed but the Reserve Bank has to take a lead and require "new money" to be spent on new assets. Only allow "old money" to be used to purchase old assets. People will say we can't do this but we can do it and I have pointed out one way at http://www.onlineopinion.com.au/view.asp?article=7973

Damien,
Some of what you have said has merit. However here in Queensland the acceleration in housing prices seems to be a function of
Lack of land releases for development and overseas investors capitalising on the weaker Oz $ in the earlier 2000's. Perhaps the federal govt (read Costello) could have applied restrictions on the latter although that would be very contrary to the conservative philosophy, the former is very much a matter for the State Govt and local Authorities, both of whom seemed relish in imposing their own excesses on housing price increases through their huge "development cost' increases.
Some of the private debt growth was associated in the private sector expansion from which the nation benefitted through huge decreases in the unemployment numbers. I doubt that any govt would have interfered with that.
Howard and Costello did give us the fiscal strength that Mr Rudd can now use to trade us through this difficult time so if anything at least give them credit for that

Let's see,
Flogging off most our National Gold Reserves as well as almost all significant Public Assets, introducing a widespread regressive tax system, accumulating a huge Commonwealth Superannuation Fund debt by deliberately not funding it for years, losing a billion or so on currency swaps - all while in the midst of a huge resources boom -which one of those is worth any Drover's Dog Greatest Treasurer bragging about?

it is worth noting inflation figures dont include housing [and petrol etc] thus the nice numbers costello created from poor numbers facilitatyed the elite to increase their income [plus tax cuts] and the poor effectivly inflated further into poverty and five year fixed contracted terms and conditions for their labours.

we wont get into the extra tax on smokers and all dinkers [except wine drinkers]or state colusions for their masters ,that has further increased the burdon on the poor ,even such measures such as rent assistance only increases the cost of the rent [maximising income for the elite owing the rental or more usually rentals]

plus tax and depriciation of the inflating govt bennifits to these favoured elite ;[depriciation on an increasing asset ?] the same group is again favoured upon by the boys club of rome , the bankers and those it favours with special terms and conditions ,favour and protection ,

special nominations into power and control over the public? service ,super top ups , credit availability ,special pensions ,healthcare ,board appointment's ,land [water ] grants ,stock manipulations , cooperate welfare and dominion[

the list is endless ,and the wage slaves [let them put their fixed income on a floating rent]
bah

In my experience smug self-assuredness in people is inversely proportional to their work ethic. So when Peter Costello comes on the TV, looking fresh as a daisy and saying what a great job he did while in office, something doesn't add up. The people making the big gains for Australia have sweat on their brow and no time for indulgent introspection, unlike our Peter.

PC's all smug about his ability to put down Labor in Parliament. But extrapolating that to the Howard Government's record of reform in office ain't fooling me. Hopefully it doesn't fool the public either.

I reckon if PC was riding in the Tour de France, he'd be the one that tucked in behind the lead rider for the first 200 kms, only getting out of the slipstream when the finish line was in sight. It would be the only time he did any real, original work.

RobP,

You assumptions on Costello's work ethic based on how he looks on TV is absurd.

I hope you allow your partner / mother to make all your big decisions, such as what to wear.

Shadow Minister,

"You assumptions on Costello's work ethic based on how he looks on TV is absurd."

I don't think so. When everyday people say things like "you get what you pay for" and "when things sound too good to be true, they probably are", what do you think the real message behind that is?

Anyone who tries hard to promote their image is only trying to do one thing - sell themselves to a willing buyer. I'm sorry, but work ethic and image are poles apart! If Pete is saying he works hard, he's in the same bin as Eddie Maguire, who's made mileage out of telling us all how he came from Broadmeadows (a poor, housing commission part of Melbourne), with the added inference/suggestion that "you too can make it from humble beginnings". As if. Eddie now lives in Toorak I believe - and I'm sure he wouldn't go anywhere near "Broadie" now.

This is just part of a strategy to deflect personal criticism so as to make his life comfortable. Same with PC. And if he has worked hard behind the scenes, let's see the evidence.