Capitalism has failed

October 4, 2008, 6:22pm, 23 views,  Leave a Comment

Capitalism has failed. That’s the only conclusion to draw from the $US700 billion bail-out package to secure world financial markets. Read more

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A case for banking regulation

August 2, 2008, 10:35am, 106 views,  Leave a Comment

Talk is rife the Reserve Bank will lower official interest rates, but the banks won’t pass on the reduction to customers. Read more

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Housing shortage bites

June 30, 2008, 7:23pm, 175 views,  Leave a Comment

The Housing Industry Association says a million new homes are needed to house Australia’s growing population. Read more

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Victa heads overseas

June 29, 2008, 3:42pm, 155 views,  Leave a Comment

Ownership of the 56-year old Victa mower brand will move overseas after its sale to a US-based company for $23 million. Read more

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Interest rate rise

October 24, 2007, 7:43pm, 178 views,  Leave a Comment

An interest rate rise in November would be the death knell of the Coalition. Howard’s chances are already looking grim, but that would be the last nail.

Economists believe there should be a rise, but the Reserve Bank has traditionally been reticent to change rates during election campaigns.

The current governor Glenn Stevens signalled a possible change in attitude earlier this year:

“If it is clear that something needs to be done, I do not know what explanation we could offer the Australian public for not doing it, regardless of when the election might be due.”

Such a move now would give Kevin Rudd the keys to The Lodge.

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Home loan tax deductions

September 2, 2007, 7:47am, 433 views,  Leave a Comment

Aussie John Symond says first-home buyers should be eligible for tax deductions on home loan interest payments. Putting aside Symond’s obvious vested interest to encourage home lending, it will be interesting to see how the political parties respond.

Howard and Rudd have both said they will “look at the proposal”, which doesn’t mean much at all really.

I’ll be surprised if it gains traction. Home buyers generally need stamp duty relief more than they need tax deductions.

The proposal also limits itself to first-home buyers. There are plenty of people in the housing market who haven’t made huge capital gains that also need assistance.

Stamp duty should be a flat fee of no more than $2000 for single-dwelling residential properties. And there should be incentives for banks to offer fixed term loans over 20-30 years at affordable interest rates, as they do in America.

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Pay an Outback bonus

July 31, 2007, 10:17pm, 266 views,  Leave a Comment

I am strongly in favor of zone tax rebates. Australia needs to decentralise and there should be incentives to encourage this.

The government has already set a precedent by giving cash to influence population through the baby bonus. It’s not a huge leap of logic to reward taxpayers who are prepared to live away from the coast.

Apart from persuading Peter Costello and Wayne Swan, the other difficulty is to define those areas that are eligible. It’s not my job to do that, but one suggestion might be to grant a rebate of $5000 per year to taxpayers who live more than 500km from a capital city and more than 300km from the coast.

That would rule out most of the growing regional cities in the eastern States and give a huge boost to places like Kalgoorlie-Boulder.

Imagine the impact that would have on fly-in fly-out? Five thousand dollars each for a husband and wife would be a big incentive for them to live in Kalgoorlie-Boulder, rather than Perth.

The baby bonus worked. Bring on the “outback bonus”.

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Interest rates

July 31, 2007, 5:57pm, 285 views,  Leave a Comment

The prospect of a rise in interest rates next month could be the end politically for the Howard Government. A cornerstone of the government’s success has been its image as a sound economic manager in turbulent times.

The threat from Iraq and terrorism has largely been proved false, contained and/or exaggerated.

Although governments aren’t directly responsible for what happens on the broader financial market, Howard’s credibility as the man with the lid on the genie bottle of inflation will be shaken if there is a rise in August, as widely expected.

The old fox is too clever to write off just yet. He has a swag full of funds to keep the pork barrel rolling. At this early stage though, my guess is it won’t be enough to win the election.

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