Citizens Electoral Council of Australia

Media Release  5^th of March 2008

Craig Isherwood, National Secretary
PO Box 376, COBURG, VIC, 3058
Phone: 03 9354 0544 Fax: 03 9354 0166
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au
 

Prime Minister Kevin Rudd's pathetic response to the more than 1.1 million households caught in Australia's housing affordability crisis—government subsidies to private corporations to build an extra 50,000 houses over five years, starting with a piddling 3000 in the first year—is a fraud.

Rudd's intention is to save the speculative paper, representing a sea of unpayable debt, and not the people, because he refuses to acknowledge that the unaffordability of housing in Australia was caused by the deliberate creation of a global property bubble, in order to prop up the international financial system.

The creation of "subprime loans" and "mortgage backed securities", etc., was an attempt by collapsing banks to continue to sell homes, or more appropriately, sell debt, as prices rose prohibitively high.

Now, the vaporisation of trillions of dollars of nominal wealth has triggered an avalanche of losses, which the system cannot withstand, and which is making the banks even more desperate.

Increasing interest rates, in the name of fighting inflation, will ensure that rents continue to rise. Injecting public money into private companies through "Public Private Partnerships" to build new houses will provide a new inflow of taxpayers' money into the bubble.

New U.S. reports show record declines in both housing prices and sales. Given that Australia is already beginning to follow that trend, the price of family homes will soon collapse—so who is Mr Rudd really looking to help here?

The only action that could truly help homeowners and renters as the bubble bursts, is an immediate freeze on mortgage foreclosures, followed by the reorganisation of those mortgages as the price of the home deflates, restructured at 1-2% fixed interest rates. (Click here to read about CEC/LaRouche's Homeowners and Bank Protection Bill.) 1.1 million households are running out of time!