Article item posted on Monday, August 10th 2009 at 12:44 pm

Victoria – Australia – has some pressing issues to attend to.  There’s a property bubble threatening to burst.  It’s not a sure thing, but it is likely.

While the Australian Greens continue to irrelevantly spout the dogma that we are all responsible for the sad plight of the environment,  the truth is we can’t continue ignoring the fact that the current system of property tax is broken and needs urgent, stimulating repair.

While we watch State and Federal Labor fiddle  around the margins of this system,  their party founders would dry retch if they only knew.

While the  Liberal Party flounder with nothing new, nothing original and nothing of  value to address it.  For Victoria’s Liberal Party the most pressing issue seems to be whether or not a National Party member will lead them at the next election.

Are we to look forward to Joe Bjelke Peterson-style quotes from Spring St in the future?  Telling us the “Writing is on the blackboard in big black letters” or “I didn’t know what was in the paper bag until I took it to the bank?”

Strike a light!!!

We have some serious issues to deal with.  We need a new approach.  Housing is useless to us if:

1. You can’t afford to live in it due to it being sold at more than it’s real world value + interest.
2. You get stuck with mortgage payments on property whose price is in free-fall.

Today the IMF announced for Australia’s general edification:

“Property bubble fears grow as IMF says houses overvalued

Australian house prices are overvalued by around 20 percent and the size of the average mortgage has reached an all time high, fuelling fears of a property bubble.

The problem is being exacerbated by a growing gap between household incomes and house prices, the IMF said.

The Reserve Bank of Australia recently flagged its concerns that a combination of easy credit, low interest rates and lack of supply could create a property bubble which could burst in the longer term, causing a collapse in house prices.

A collapse in house prices would be a disaster for most Victorians, nay, all Australians.  Our prosperity is pinned to the housing sector.  In the near term the consequences are far worse than climate change or drought simply because the effect is immediate and will impact all levels of society.  Arguably the price of property is out of step with the real value of housing and land, arguably we need a “correction”.  But the correction will be painful for all.

For small business and their employees – the backbone of this nation – it could easily be an economic disaster.

We have a system that rewards people for sitting on great globs of land and doing nothing with it.  We have a system that makes pensioners asset rich and cash poor.  Where is the value in holding land worth a million or more if you must dine on baked beans or dog food and just can’t afford to sell?

We are collectively running around hitting our own heads with a Green hammer.  The Rudd government has a climate bill up for the Senate.  If the Greens block it – and all indications are they will – we face a double dissolution.  While the country faces a housing sector economic tsunami the Australian Greens are going to hold the country hostage out of muddle headed bloody mindedness!

The legislation wont go far enough.  So they will block it.

Just how far is far enough?  Why, just one step more than you dare take. No!  One step more than that.

Oh – to hell with impact on Australia!!  We’re the Australian Greens!  We run with careless abandon through the flowery forest  of Reckless Abandon.  Ask not what you can do for your country, but what you can do for the gnomes and elves that live under the ecologically unique fungus!”

As Australians we need a better system for managing housing, land tax and housing equity.  Our “Lucky Country” is rapidly becoming “Blue Print USA”.

Scott Kane

Tags: Australian Greens, australian liberal party, average mortgage, bank of australia, bjelke peterson, black letters, bubble burst, current system, edification, federal labour, house prices, household incomes, low interest rates, national party member, reserve bank of australia, s joe, sad plight, spring st, strike a light, wretch

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