5. Read the following article. In your opinion, what can the Australian governme

Question

5. Read the following article. In your opinion, what can the Australian government do now to solve the future housing affordability for your generation?

http://www.abc.net.au/news/2017-10-02/property-market-great-australian-wealth-gap-in-charts/9007180

Use the economics knowledge that you have acquired in this course so far to elaborate your discussion. You need to write at least half a page in length (please do not use bullet points). Note that presenting a list of reference is preferred. But not required.

Explanation / Answer

Unaffordable housing has led to an “increasingly dependent generation” of young people, a new study has found.Australian government should take few steps now to solve the future housing affordability for our generation.Incentives should be given to the first home buyers.The stamp duty property tax can be removed for first home buyers.An array of possible solutions which might serve to cool the Australian property market and deliver many more affordable properties could be: - a nationwide network of CLT developments managed by government and housing associations, involving easier transfer of title and greater worker mobility - place prudential limits on how much money banks can lend to borrowers and how much money they can endogenously create, via the RBA and APRA. - providing extensive holdings of leased housing like the very widespread British housing association model – this is a rental model only, however Affordable housing Submission 61 34 - a Georgist/Geoist re-arrangement of the tax system (see the Prosper submission) designed to control property speculation and price bubbles - remove or alter negative gearing arrangements - withdraw FHOG-type schemes as inflationary - prevent or minimise foreign purchases of new or used builds as inflationary, except where desirable for student relatives' housing, etc – requiring changes to FIRB rules

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