More like 'Help to Buy' votes: Labor's housing scheme explained
It’s too late to be an April Fool’s joke but just in time to be the perfect sly grab for votes as the federal election nears. We’re talking about Labor’s ‘Help to Buy’ idea, of course and, no, it’s not going to help fix the housing affordability situation.
The scheme was announced on May 1 and promises to bring nothing but price distortions, chaos and more debt to Australians. It is disguised as a solution to unaffordable housing, but Labor's "Help to Buy" scheme will only further inflate the price of homes across Australia.
HOW IT WORKS:
Under the scheme, the government would use taxpayer funds to pay for up to 40% of a buyer's home . The catch? The government claims ownership of the portion it funded. The idea is to help 10,000 Australians get their foot on the property ladder.
WHY IT SUCKS:
Every time cash is injected into markets, the price simply goes up. The scheme does nothing to fix supply levels so just as many buyers will be vying for the same scarce commodity. This is Intro to Econ level stuff and even a small child playing a strategy-based boardgame would discover this themselves.
And what if the buyer's income increases at some point in their career, pushing them above the eligibility threshold? They will be forced to sell. With an income eligibility cap in place, those who qualify for assistance will have no choice but to ensure their income stays below the threshold indefinitely. Imagine disincentivizing career growth and productivity like that.
It’s a shameless attempt at buying votes while doing nothing to fix the causes behind housing affordability issues.
Labor's plan will leave first home buyers owning just a fraction of their homes, while the government claims the rest. It is a sly scheme poised to hurt the very voters it is designed to appeal to.
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