In a bid to salvage its rather labyrinthine Housing Affordability Future Fund (HAFF) proposal, Labor has sallied forth with a twist, a guaranteed $500m income for the HAFF. What’s the scam?
The scam is that you can’t deliver a guaranteed income from a variable finance product without further complicating an already complicated solution to the housing crisis, without a MacBank-style structure finance element. So now we are facing another box or two for the HAFF flowchart, some sort of derivative to guarantee income from the financial markets.
Labor dropped its guaranteed income twist “olive branch” proposal to Murdoch’s The Australian last night in a bid to gerry up support for the HAFF, replete with a story image of former Greens senator Lydia Thorpe.
Why don’t they just issue government bonds to pay for it rather than pay a raft of fees to asset managers to bet on returns from a rising sharemarket when the country appears to be sliding into recession?
Is there another box on the flow chart for investment bankers’ structured finance fees? Maybe Labor could enjoin the Opposition to get its bill through but with Peter Dutton adopting the Tony Abbott ‘block everything’ routine, it’s a gamble.
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.