Tuesday, April 29, 2008

Good at writing essays? Your Reserve Bank wants you

RBA ECONOMICS COMPETITION

The Reserve Bank of Australia is pleased to again support an essay competition for university students to be conducted by the UNSW Economics Society.

The essay topic for this year is Housing Costs and Affordability in Australia.

Housing is an important component of household expenditure and household balance sheets. Essays should discuss:

. how housing costs and affordability have changed in Australia over the past two decades, and the factors that have contributed to these changes; and

. whether there is a role for government in improving housing affordability and if so, which policies you would recommend. Take care to explain the efficiency and equity implications of any policies you identify.

The competition is open to citizens and permanent residents of Australia who are currently enrolled in an undergraduate program at an accredited Australian university. Entries must be submitted by 22 August 2008.

For all enquiries about the competition, including detailed information about the rules, submission guidelines and prizes, students should visit the UNSW Economics Society Essay Competition web page: http://www.unswecosoc.com/

5 comments:

feudaloptionsparty said...

I am one of the few fans of the RBA and would like to offer the following site for those competitors who are leaning towards writing a satire on housing affordability.

The government repsonse so far has been a joke, so why not?

A parody for your reading leisure:
http://feudaloptionsparty.googlepages.com/investorsruleok

I hope that link works. If not, have a nice day anyway.

Anonymous said...

That was well worth a read FOP. Thanks for that.

Adrian Wong said...

Dear Peter,

On behalf of the UNSW Economics Society, I thank you for promoting the RBA Economics Competition!

Peter said...

Pleasure.

Anonymous said...

Ulterior motive for the RBA essay competition is amusing.

Firstly, congrats to the RBA for the competition as a venue for ideas.

Funnily enough, the RBA already has the solution at hand:

http://www.rba.gov.au/PublicationsAndResearch/SubmissionsToParliamentaryCommittees/productivity_commission_first_home_ownership.pdf

However, analysis of this submission indicates the solution to housing affordability would involve exposing the role of investors and the rort of negative gearing.

From Executive Summary of RBA submission on home ownership –

Point 9 - main impetus for price increase - strong desire for investment property
Point 19 - high proportion of investors & tax system that assists property investment.
Point 22 - most sensible area to look for moderation of demand is among investors. - submission highlights that taxation treatment in Aus is more favourable to investors than in other countries, particularly the ability to negatively gear an investment property when there is little prospect of the property being cash-flow positive for many years.

ULTERIOR MOTIVE:

To pretend to look for a way to make housing affordable without taking their own advice noted in point 22 of the submission.

This is akin to maintaining pressure in a leaking tyre without repair to the puncture - just keep pumping it up.
• ‘pressure’ is demand for property (at hyper bubble prices)
• ‘leaking’ is the outflow of revenue in the form of negative gearing
• ‘repair’ would be to address the underlying issue of investor advantage
• ‘pumping it up’ is the preferred technique to date – eg the $60,000 rental tax credit plan announced on 04Apr08 by PM Rudd. Yes, another ‘gift’ to investors only, or said another way – a $60,000 tax credit slap in the face for FHO.

When is someone in government going to address the issue of NG?

Or do they no longer really care?

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