Rudd Bails out the Wealth Gap
Prime Minister Rudd’s $10bn ‘economic security strategy’ is another blinkered response. A decade of record economic growth has done little for the aussie battler. Record prices for iron ore have cascaded into the deepest pockets in the nation, where hard working miners pay thousands of dollars in rent, soaking up much of the gains. David Ricardo’s ‘Law of Rent’ will always see economic growth benefit land owners disproportionately to hard working individuals.
The announcement of the First Home Owner Grants pt2 (FHOG) is simply shocking. Yet again the property lobby is being propped up. Just when prospective buyers were hoping land prices would fall, the ALP gives another handout to those who already own a piece of this precious earth.
This will ensure the recession is deeper and longer than feared because the cause of the world financial meltdown, the land price bubble, has been given a helping hand again!
If everyone receives $14,000 then land prices go up $14,000 at least. In 2001, when the scheme was first announced, land and housing prices jumped $32,000.
The result will see a new and enhanced wealth gap. Younger generations will again be left paying record rents, already more than twice what any other generation has paid. Julia Gillard’s ‘War on Poverty’ (announced January 08) has become just that in namesake.
Today we hear of the need for Breakfast Clubs in schools. Now that rents will be maintained at sky high levels, less money will be available for food and other necessities. One wonders whether the credibility of politician’s will reach a record low in the current climate.