If you find the text too small to read on this website, press the CTRL button and,
without taking your finger off, press the + button, which will enlarge the text.
Keep doing it until you have a comfortable reading size.
(Use the - button to reduce the size)

Today's quote:

Tuesday, May 19, 2020

The virus of government intervention


First we had the federal JobKeeper initiative which gave everyone who lost some or all their income due to the lockdown, a fortnightly JobKeeper income of $1,500, regardless of how much or how little they had earned before.

This has led to a whole cohort of people, who previously worked for just a few hours and perhaps earned no more than a hundred dollars a week, to get a government paycheque of $750 a week.

In rushing out this "assistance", the government did not means-test it. But shouldn't they at least have dialled it back to a dollar-for-dollar-replacement up to a maximum of $750 a week? If someone lost $100, give them $100; if someone lost $1,000, give them the $750 maximum!

Not to be outdone, the State government of New South Wales rushed out their tenant initiative: not only a moratorium on evictions - fair enough! - but also an "entitlement" for a tenant to seek rent relief if their income was reduced by more than 25% during the corona crisis, with the one subtle difference that this rent relief is to be given by the tenant's landlord! Again, no dialling back to real hardship cases but across-the-board rent relief, even for tenants who have their salaries temporarily cut from (say) $191,300 a year to (say) $140,000 a year.

Why do I quote those rather specific figures? Because this is the situation my tenants find themselves in. They are paying $1,900 a month in rent and seek a rent relief of $400, down to $1,500 a month, because their income has been reduced to a "mere" $140,000 a year.

Since when is paying $1,900 out of $11,666 a month a hardship? That's just 16% of their income! By how many percent should the rent drop before they no longer "suffer hardship"? (This recent newspaper article says, "We're using 30 per cent of your income as a bit of a baseline. Anything over that is called rental stress.")

Again, a well-intentioned government initiative which would not be open to abuse, IF the government had put a rider on it so that only those who end up paying more than (say) 30% of their coronavirus-reduced income in rent would be allowed to seek rent relief.

Googlemap Riverbend