Assistance boost 'bandaid' solution to housing squeeze
ABC - Wednesday, February 21, 2007. 3:48pm (AEDT)
The Democrats say a potential increase in rent assistance would do little to alleviate the growing housing squeeze.
Prime Minster John Howard says he is considering giving assistance to people struggling with rising rents.
But the deputy leader of the Democrats, Andrew Bartlett, says that is an election year bandaid solution to a problem that needs major policy reform.
"A hike in rent assistance will probably just mean a hike in rents and all the extra money, or most of the extra money flowing into the pockets of investors and landlords," Senator Bartlett said.
"The big problem is we've got no housing policy.
"The Federal Government has vacated the field for the last decade and until we have a coherent national strategy that looks at all the different angles it's just going to be continual bandaids while the structural problems get worse."Commentry:
Of course Senator Bartlett is correct when he says that "a hike in rent assistance will probably just mean a hike in rents". And the worst of it is you are taking taxpayers dollars and putting them in the pockets of private or company investors.
There is no effective way to get around the problem - except to hit is at the true cause.
The problem? Land supply restriction by state governments (ie zoning and land release).
The solution? Massive deregulation, particularly in land zoning, so private land holders can flood the market with land. This will inevitably drop house prices and later rental prices.
NB: For the record - as much as I wish I did, I don't hold any large tracts of land!
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