JUGGLING A HOT POTATO
The first home owners boost is set to be one of the political hot potatoes of next months federal budget, with the government debating whether to axe it or extend it.
While the government and the building and real estate industries hail it as a huge success for boosting the struggling sector, others warn it could have dire consequences down the track.
The arguments are essentially these:
In the current tought times, the government argues, the move is needed to prop up the home building industry, which accounts for 9 per cent of the nations economy. Not just home buyers are being looked after here, but jobs of carpenters, plumbers, tradesmen, labourers and suppliers.
The counter argument, by economists like professor Steve Keen, is that the boost draws in borrowers who cant afford to be there in the first place. And once unemployment starts to rise sharply, these will be the first people to default on their mortgages.
Source: Sunday Telegraph
