The relatively newly installed LNP government in Queensland has not been short on controversies since its election. I understand that different governments have different ideological underpinnings, but when ideology becomes motivation without any reference to empiricism, it does a disservice to the ideal of good government.
Whilst there have been numerous decisions by the new LNP government that have a questionable policy basis, the latest offering is a prime example of policy that is either based on blind optimism, guesswork or even cronyism.
The idea is appealing enough. Remove the ‘red tape’ on building new dwellings and make them cheaper. Making them cheaper will increase sales, thereby rescuing the building industry and possible stimulating the economy.
But as noted in the article, it’s likely a false economy in exchanging short term cost savings for longer term additional costs. Take the water tank as an example. Not having a water tank might be cheaper, but it also means that you lose out in having to buy all of your water, rather than being able to supplement your usage with ‘free water’. The cynic in me suspects that the government is hoping to drive up revenue for state-owned water supplies.
Further, not having a tank installed during the building process deprives the purchaser of the cost savings that are gained through the builder’s wholesale bulk purchasing power – the cost of the tank when included in the construction is cheaper than having to buy and install it as a retail consumer at a later date.
Finally, what guarantee is there that those cost savings will be passed onto the purchaser? We know from previous cuts in costs and taxes that these are generally absorbed into the profit margins on business and don’t make their way to the end consumer. Just look at the effect of the First Home Owners Grant to see what governmental intrusion does to market pricing. Either the LNP is naïve in relation to this or they’re window dressing a policy to help out their mates in business at the expense of the average punter.
Populism rarely creates good policy, nor does policy borne of lobbying by rent-seekers in industry. I predict that this will not only fail to achieve its objective but will in reality cause more harm than good to the consumer. The fact that I can see this when the government either can’t or won’t is disturbing.