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The number of Australians living on the streets will be halved in the next 12 years, Prime Minister has asserted recently.
Launching the Government’s White Paper on Homelessness, “The Road Home”, Mr Rudd outlined the Federal Government’s plans for reducing homelessness in Australia by 2020, with specific goals to cut homelessness by half and provide accommodation to all rough sleepers who require it.
There are currently 105,000 homeless people in Australia, of whom approximately 16,000 are sleeping rough.
The White Paper allows for a significant injection of federal money, providing an additional $1.2 billion over four years, or a 55% increase in investment in homelessness.
It includes a commitment of $800 million over the next four years for new support services for homeless people and $400 million over the next two financial years for social housing, to house the homelessness.
The reforms aim to:
- Help up to 9,000 more young people to remain connected with their families;
- Help up to 2,250 more families at risk of homelessness to stay housed;
- Provide day to day support to an extra 1,000 adults with mental illness;
- Build up to 2,700 additional public and community houses for low income households who are at risk of homelessness;
- Build up to 4,200 new houses and upgrade up to 4,800 existing houses in remote Indigenous communities;
- Allocate aged care places and capital funds for at least 1 new specialist facility for older homeless people every year for the next four years.
With news that Germany is now officially in recession, is the domino effect in full swing? Can Australia resist – maybe, maybe not – hopefully New South Wales is not the trendsetter. As the only Australian state in recession, the hapless State government has decided that the best way to stimulate growth and kick-start the economy is…wait for it…put up taxes and hit families and small businesses hard. What planet are they on?
In this issue of our e-mag we’ve tried hard to balance the heavy and light-hearted to keep things running smoothly for you. We haven’t sugar-coated the bad news, but we’ve made sure there’s some luxury and fun included.
It’s no secret that Barack Obama utilized the internet and social networking massively during his election campaign. We note that Australia’s political leaders have taken this onboard too, meaning that as well as Facebook and MySpace, you can now follow Kevin Rudd on Twitter and also Liberal leader, Malcolm Turnbull. See for yourself by clicking on the links, and don’t forget you can follow the Marquette Turner team too (see the bottom of this email for the links, and also more information).
Keep checking our blog to stay informed on life and its luxuries – it’s updated many times a day. You can check out the Nov 14 e-mag, or browse through our blog right here, right now.
“A government big enough to give you everything you want, is strong enough to take everything you have” Thomas Jefferson
Keeping up with the ever-changing commentary and realities of the Australian and worldwide economy (which don’t necessarily work in-congruence) can be pretty daunting. Whilst no economist myself, I nonetheless happily offer my opinion on “the real state” of play as I see them.
There have been a number of moves taken by Kevin Rudd of late to primarily ensure that confidence in the Australian banking system is not tested, and to prevent any panic (short or long-term) which could cause irrevocable damage.
His recent package of $A10.4 billion recognises when an economy is tinkering on the edge of a debt-induced recession, government spending both boosts demand, stimulates consumer confidence and thus spending; and provides the private sector with cash flow needed to meet its debt repayment commitments.
As such, I believe the following aspects of the package are positive:
Assisting pensioners and families;
Guaranteeing deposits at Australian banking institutions
On the other hand, I fail to see how increasing the First Home Buyers Grant and increasing the number of grants will have any long-term positive help to the real estate market. It really is like Nero fiddling whilst Rome burned.
Quite simply, the root cause of this crisis is excessive debt that drove house and share prices to unsustainable levels. Times appeared on a never-ending high as the housing bubble continued, but this was only fuelled by the money was adding to demand.
An increase in $7000 is marginal at best:
- given that it only represents a small percentage of current house prices:
- given that most first home buyers are likely to be located in areas where prices have already begun to soften significantly;
- if increasing unemployment will leads to lower demand;
- if perceptions of increased demand lead to increased supply
Debt servicing became prohibitive as house prices rapidly outstripped incomes and this lead to an increase in the size of the bubble. And whilst a drop in interest rates has taken some of the pressure off mortgage holders, consumer prices remain prohibitive, particularly when the flow of money and confidence throughout the market is not looking good.
Increasing the amount of money that first home buyers can play-with on a home may help those who can’t afford to get into the market do so is not very productive, particularly if it is factored in by all parties involved, which simply negates its use.
This at a time when the dollar’s fall has put at risk predictions of falling inflation from the current unacceptable 5%, and Australia’s international debt is climbing.
What is needed is not a boost to the First Home Buyer’s Grant, but a 1% cut in interest rates by the Reserve Bank on Melbourne Cup day, while Government’s of all levels must stimulate business with tax cuts otherwise business will be forced to stop hiring new workers and lay-offs of existing workers will increase substantially. The bubble must be deflated, not stretched to the point of no return. Simon Turner
Home owners and investors have welcomed suggestions that the Reserve Bank of Australia will cut interest rates this year, but will the Banks pass the rate cuts onto borrowers?
Prime Minister Kevin Rudd has told Australians to change banks if they fail to pass on rate reductions. The banks have had no problem increasing rates to levels higher than official rate increases and have even increased rates despite the Reserve Bank keeping them on hold.
In an interview with The Australian Financial Review last week I was asked what it would take to restore confidence in the market. I expect buyers to remain cautious until the banks show that any rate reductions will be passed on. I believe a rate cut of around one per cent is needed to restore buyer confidence as I’m hearing increasingly that buyers and vendors are skeptical that banks will pass on the rate cuts. A reduction of 100 basis points will result in the market reacting in a positive way, even half a per cent will be looked cautiously.
So the question is buy now or wait? The answer is simple. There are some fantastic buys in the market at the moment and this will continue for the foreseeable future. As the stock market wobbles, dividends decrease and share prices drop bricks and mortar will become a major focus for many investors.
If you find the right property at the right price and choose the right lender your decision is an easy one to make. My only advice is to ensure sure that you keep your lender honest, and if “changing banks” as PM Rudd suggests, make sure you are aware of all fees and costs that may apply.
The budget has introduced a range of measures to address housing affordability.
- The Government is committing to spend $623 million over four years on a rental affordability scheme that will stimulate the construction of new rental properties by providing investors with $8000 a year for 10 years for each property that they rent out for 80 per cent of the market rent.
- A fund for affordable housing worth $500 million over four years will also help to increase the supply of new housing by assisting with surrounding infrastructure and cutting obstacles to development approvals.
- A national housing supply council will oversee the adequacy of the nation’s housing stock for the next 20 years, and the Government is looking for surplus Commonwealth land that could be used for new housing.
Housing Industry Association Managing Director Dr Ron Silberberg said the $21.7 billion surplus would help mitigate interest rate pressures and investment in infrastructure and skills would help reduce inflationary constraints and increase productive capacity.
“Measures aimed at boosting the supply of new housing along with desperately needed urban infrastructure will assist in pegging the gap between underlying demand and current production,” Dr Siberberg said in a statement.
Housing commitments in the budget include $500 million over five years for a housing affordability fund, $623 million over four years for a national rental scheme, $1.17 billion over five years for first home saver accounts and $10 million to assist with financial counselling for Australians facing mortgage and rental stress.
The government had increased investment in skills to address immediate and longer-term needs for tradespeople for the housing industry, according to HIA.
HIA also said it applauded measures aimed at making cities more efficient and productive through new investment in transport, community facilities and services is.
The Federal Government has made its centre-piece scheme to tackle housing affordability more equitable.
The initial plans for the Rudd Government’s first-home saver account scheme gave more benefits to higher-income earners than it did those most in need of assistance.
In the 2008 Budget, however, it has outlined a revised scheme that would help all first-home buyers regardless of how much they earn.
Under the scheme, buyers aged between 18 and 65 will enjoy government contributions to special savings accounts.
- The Government will chip in with a 17 per cent contribution on the first $5000 made each year into the account, with a maximum benefit of $850 a year.
- Savers will not pay tax on contributions to their accounts. And when they use the pot of money for a deposit on a home, the withdrawal will be tax free.
Such accounts have been criticised as doing nothing to improve the supply of new housing, which could mean they just lead to even higher house prices.
The scheme announced in the budget sets a common contribution across all pay scales. Interest received on money in the savings account will be taxed at 15 per cent.
The cost of the scheme is put at $1.2 billion over four years.
People wanting to set up a savings account would not need a minimum deposit.
However, to withdraw funds minimum contributions of $1000 need to be made in at least four separate financial years.
The home-buyer will have to live in the house for at least six months during the first year of ownership or face penalties.
Savers can also close their accounts at any time and tip the balance into superannuation.
A couple on salaries of $61,000 who save 10 per cent of their income would benefit from using the accounts by about $12,600 after five years.