Earlier in the week I wrote a piece on ABC’s Unleashed about why Kevin Rudd should introduce a Home Renovation Tax Credit. Boy, did that post draw the crabs! I don’t think I made one key point clearly enough.
The suggestion of a Home Renovation Tax Credit is borne out of my frustration with the futility of the most recent batch of cash handouts.
Frankly I see it as a failed measure and therefore largely a waste of money. Huge numbers of people are merely saving their handout and so it has done, and I believe will do, little to stimulate the economy.
This was part of Blanchard’s point about government’s focusing on measures that pull forward the timing of demand instead of just handing out wads of cash.
There sure is a lot of demand for renovation. (And while it has lows and highs it is generally not as cyclically affected as other parts of the building industry like new homes.)
The point of the tax credit is to pull some of that demand forward but ONLY reward people AFTER they’ve made their investment in materials and labour.
Is it the only measure one would consider? Of course not. But my point is, that within the context of more stimulus measures being considered, I’d rather see a measure like this, than another round of cheques that will be a waste of money.
(There was one recent commenter who is interested in the whole idea of using measures like this to yes, drive demand, but also drive the sustainable adaptation of existing housing stock.That’s a pet favourite of mine, so I’ll save that for an extended post in a couple of days.)
One final thing - to the Hudson Geoffrey person. He’s accusing the ABC of advertising some mysterious business I may have that will benefit from the post on Unleashed. Mr Hudson Geoffrey: there is no business. I merely went through years of hell trying to use our legal system to seek redress from a shoddy builder and was so irritated at the system’s flaws (and so clear about the things we as consumers overlook) that I sat down and wrote a helpful guide to renovating.
Sure I get a royalty - but it isn’t enough to pay for the next renovation, believe me!
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