Wednesday, March 01, 2006

Okay - showing my liberal tendancies early, I need to rant about the KiwiSaver scheme and the details announced yesterday.

Let me start by saying in general I actually support the idea - we are a nation of pathetic savers and need a kick up the arse to change that but:

We are also a nation that over-invests in property
We are a nation experiencing inflationary concerns and consequently an over valued dollar due mainly to inflation / growth in property prices.

So our history teachers answer? A subsidy on the purchase of a house.
Anyone who has studied any economics (obviously not our esteemed doctor of history) knows a subsidy is going to be split between the seller and buyer - given the elasticity of prices in housing - he's probably just contributed $4000 - $8000 of inflation to a certain price band of houses (see 2 big problems above)...

He then also tries to justify the $100K income limit (remembering this is 1st house only anyway people) by saying they "are not going to help people buy their home on Paratai drive".
I agree - the 50 state homes there are for that purpose :o
Please tell me again as I struggle to pay off my mortgage why I must continue to help others pay off theirs first?

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