Sticking with the state of Victoria, their government seem to have a lock on all the dumb ideas.
Not only did they think debt doesn’t matter as they effectively shut down private enterprise and built a police and public servant state, they now believe a raft of new taxes will pay for it.
That’s not what happens.
New taxes chase good money and good investment out of a state. It’s a pretty simple calculation; as an investor, if I can get a better return elsewhere, that’s where I am likely to put my money.
Although that’s basic economics, it hasn’t stopped the Dan Andrews race for other's riches.
They’ve put forward a raft of dumb ideas, but one of their dumbest has to be rent controls.
The Victorian government is actively considering fixing rents for two years. That will hurt renters and mum and dad landlords, who happen to live in the Venezuela of our Federation.
First, a move like this will drive investors out of the market.
Many will sell and take their money elsewhere. Andrews has said he doesn’t care about that.
But many will care when all those rental properties are no longer available for rent.
You see, around 90% of residential rentals are owned by small investors, the nurses and teachers who are trying to save for their future.
If they step out of the market, who will step in? The government? I wish you good luck with that.
And that’s why rent controls are bad news for renters.
The availability of rental properties will diminish. Those that remain available will front-load the rent to accommodate the freeze period, meaning there will be more upfront costs to renters.
That’s why these types of policies are being dumped - even by lefty politicians around the world.
In the UK, the Labour Party have dumped a rent control policy from their manifesto.
The Irish protested over the consequences of their government's terrible rent control policies, which saw small investors driven out and vulture funds move in.
In America, rent control properties in New York are often maintained to different standards than others. Landlords simply can’t afford to - which creates virtual slums.
That’s a lose-lose for everyone.
This is the future that Dan Andrews and his ilk have planned for Australia.
These types of policies are straight from the Greens Party manifesto, which tells you just how radical and economically irresponsible they are.
Socialism, in whatever guise it is presented, doesn’t work. That’s a lesson many people right around the world, have learned the hard way.
Incredibly the Victorians who keep re-electing Dan Andrews have some more hard lessons coming their way.
