Comments for Blog - Nick Jenkins

Comment on Economic reform of government housing distortions by Nickj

Nickj — Thu, 29 Sep 2011 01:44:56 +0000

Hi Matthew,
Definitely agree that the removal of Negative Gearing between ’85 and ’87 happened at the same time as rising rents in Sydney, but disagree completely on the cause. I’d refer you to: http://www.unconventionaleconomist.com/2010/12/negative-gearing-revisited.html , under the section “Impact on rental market”, and also: http://www.smh.com.au/articles/2003/08/24/1061663676588.html , both of which cover this very well.

Essentially there is no clear causation or correlation between NG removal and rising national rents in that period. What did happen was rising rents in Sydney, which already had an unusually low and falling vacancy rate anyway, even prior to NG removal – see this graph: http://1.bp.blogspot.com/-gnBmeG5piVU/TgeyZJ58onI/AAAAAAAABS4/tRmS-woQ4hY/s1600/hp4.bmp (wish I could find one that went back a few more years). Combine this with ferocious spin by the real estate industry at the time (in the worst traditions of the mining industry against the resources rent tax), the media keen for a good story, and you get the resulting perception that NG is necessary for rental properties – yet what happened in Sydney was going to happen anyway, irrelevant of NG. The stats simply don’t back up the claim that without NG rents will rise.

Look, if there is any argument at all for NG, it’s that it should apply to new housing only. It’s pointless applying it to existing housing, since all it does is change the balance between numbers of renters and numbers of owners, but it by definition it doesn’t and cannot create any new housing when considering only existing housing. More people buying instead of renting, means less renters, means less competition for a smaller pool of rental properties. The only case where it could help is in the creation of new housing stock. That’s why I favor either quarantining NG for all properties, or making NG deductible against other income for new properties only, say for a fixed period of time after they are built.

And of course it’d make it easier both politically and for people when planning their finances, to phase NG out on existing properties gradually and with several years notice, so that people know exactly what’s coming and can plan accordingly.

Comment on Economic reform of government housing distortions by Matthew

Matthew — Wed, 28 Sep 2011 23:28:07 +0000

Correction: In July 1985 the Hawke/Keating government quarantined negative gearing. it was reintroduced in 1987.
http://en.wikipedia.org/wiki/Negative_gearing_%28Australia%29

Comment on Economic reform of government housing distortions by Matthew

Matthew — Wed, 28 Sep 2011 23:09:25 +0000

Hi Nick,
A comment on abolishing negative gearing. In Oct 1987 Paul Keating abolished NG. Immediately the housing market took a downward spiral. Investors ran away. The news was full of young mum’s with babies in prams qued up at caravan parks trying to find accommodation. 18 mths later it was reintroduced and the Hawke govt. took a huge hit. If NG is abolished the govt. will have to fill the gap and provide public housing for those not in a position to buy their own. I think this would easily eat up the tax breaks NG provides. Think of the ongoing cost of maintenance to the public purse. Based on the Building Education revolution BER debacle and not to mention the insulation catastrophe NG may be the lesser of two evils.

Comment on On Showbags by solar electric

solar electric — Wed, 20 Apr 2011 15:16:52 +0000

When you go to shows or guesting you are given show bags for you to take home. While some people will appreciate this, especially the newbies, others might have some other thoughts. You see, mostly from these bags is consumer crap, and what can you do with consumer crap? Absolutely nothing, unless you actually use the products inside of it, then it would be really good on your part.

Comment on On Showbags by nico

nico — Tue, 12 Apr 2011 10:56:34 +0000

haha this is the first time i’ve seen a weird product yet interesting though . its like napkin in your underarms?

Comment on On Showbags by Adam

Adam — Tue, 12 Apr 2011 07:30:42 +0000

I could definitely use some of those underarm sweat liners as I tend to sweat too much even while not being very active. I can sweat just driving with the AC on.

Comment on On Showbags by David Bailey

David Bailey — Tue, 12 Apr 2011 06:15:36 +0000

I have to get some of these. I have troubles with my sweaty underarms. It just gives me an uncomfortable feeling.

Comment on On Showbags by Graham

Graham — Sun, 10 Apr 2011 12:52:40 +0000

I go to the show with my son (now 7) so we end up coming home with bags that are either full of lollies or crappy little plastic toys that break within a few days.

I think the adult versions are WAY more value….the flour sure does have me floored though. WTF were they thinking?

Comment on On Showbags by Simon

Simon — Fri, 08 Apr 2011 08:39:39 +0000

underarms patches? they really have that?! Now, I know how I’d get away with sweaty armpits after a day of Airsoft. Interesting. I doubt it though if I’d ever be comfortable wearing them.

Comment on On Showbags by Steven Bancroft

Steven Bancroft — Tue, 05 Apr 2011 13:54:49 +0000

The underarm patches are growing in popularity. It’s funny you mention them as something you find interesting in your bag of goodies because my wife and I spent some time researching the underarm patches about a year ago. We saw an ad for them in a magazine. Interesting idea.

As for what’s worse than flour or sand – how about fruit that bruises for a food bag. It’s like the lousy Halloween handouts of apples and oranges. No kid wanted that. I love fruit, but I don’t want a mashed banana in my bag.