There’s a popular view that Family First, as the political wing of fundamentalist churches, represents something alien to Australian political culture. (I’ve probably contributed to this view myself.) But if its latest policy release is any guide, it is solidly within the mainstream of at least one of our traditions.
The party’s lead federal Senate candidate in South Australia, Tony Bates, … said Family First wanted first homebuyers to enjoy the same tax treatment as investors for the first five years, meaning they could claim their interest costs as a tax deduction, up to $7000 each year.
This is absolutely typical of the attitude that has plagued Australian public policy for more than a century. “We’re suffering because somebody else is getting an unfair subsidy, so give us one as well!”
So, for example, farmers were disadvantaged for years by high tariffs designed to prop up manufacturing industries. Their protests fell on deaf ears, so they joined the subsidy queue themselves and, over time, built up a huge network of perks and privileges, some of which are still with us.
Family First is quite right to point out that property investors, a favoured political constituency, are being unfairly rewarded. But instead of trying to correct that, it wants to bring in a fresh subsidy for its own favoured group. So much for the conservative message of self-reliance.
This is the sort of subsidy arms race that keeps gumming up our economy. If everyone is getting a subsidy, nobody is any better off — in fact, people are worse off, because moving all that money around carries large transaction costs.
In practice, the subsidies are not universal. Some group will be missing out — in this case, renters, who being towards the bottom of the socio-economic heap, have less political clout. But given time, someone will get around to subsidising them as well.