AUSTRALIAN PRODUCTIVITY COMMISSION                                 AUSTRALIAN CURRENCY TASKFORCE

Housing@pc.gov.au                                                                                                               hardcurrency2k@hotmail.com

                                                               DISCUSSION DRAFT SUBMISSION

                                                                               FEBRUARY 9, 2004

                                                  “… IRONICALLY, MANY OF THE HOME BUYERS CONDEMNED TO DEFAULTING
        BY PUNITIVE MORTGAGE RATES WERE THE SAME LOW-INCOME HOUSEHOLDS WHO QUALIFIED FOR
       GOVERNMENT ASSISTANCE PACKAGES…

… IN THE AUSTRALIAN CONTEXT, THEY ARE THE HOME BUYERS WHO CAME TO LEARN THE MEANING OF
E N T R A P M E N T…”

                                                                                                                                                  B. BADCOCK & A. BEER

                           HOME TRUTHS-  PROPERTY OWNERSHIP AND HOUSING WEALTH IN AUSTRALIA (P.71) 

IT IS APPARENT FROM THE DISCUSSION DRAFT THAT THE COMMISSION MAY HAVE MISCONCEIVED

THE TASK PLACED BEFORE IT BY THE TREASURER.

A LARGE NUMBER OF SUPPLEMENTARY SUBMISSIONS ARE  HIGHLY CRITICAL OF THE DRAFT,

AND MANY POINT TO THE  TERMS OF REFERENCE AND COMMISSION’S STATUTORY OBLIGATIONS.

THE DRAFT, NAIVELY, APPEARS TO APPROACH ITS TASK AS IF IT WAS DEALING WITH

AN UN-ADULTERATED AND PERFECT HOUSING MARKET,  WHEREAS IT IS, IN FACT,  DEALING WITH 

A HIGHLY SOPHISTICATED PLAY AND A DELIBERATE PLOY TO PUSH,  AND KEEP PUSHING UPWARDS

THE PROPERTY PRICES FOR THE BENEFIT OF THOSE WHOSE INCREASING PERCENTAGE-LINKED 

PROFITS ARE DEPENDENT ON THE INCREASE IN THE NUMBER OF TRANSACTIONS AND IN THE SIZE 

OF  THE  ASSET PRICE “FOOTPRINT”,  IN A PYRAMID-LIKE FASHION.

THE DRAFT, WE SUBMIT, USES AN INAPPROPRIATE TERMINOLOGY TO DESCRIBE MATHEMATICAL

OUTCOMES OF THE ORDINARY AND/OR COMPOUNDING EVENTS,  AND HAS THUS ALLOWED 

CONTAMINATION OF ITS OWN CONCLUSIONS, CAPABLE TO LEAD A LESS SOPHISTICATED READER 

INTO ERROR, FALSE IMPRESSION AND A FALSE SENSE OF ECONOMIC SECURITY.

FOR EXAMPLE,  HAVING TO BORROW MORE AT LOWER RATES FOR THE SAME PROPERTY

DOES NOT, LOGICALLY, AMOUNT TO “CHEAPER”  FINANCE COSTS,  AND/OR TO A LOW 

INFLATIONARY CLIMATE, BUT TO QUITE  THE OPPOSITE;

AND THAT, IN A DEBT-DRIVEN MARKET,  RISING PRICES ARE INDICATIVE OF THE DEBT AVAILABLE

ANDSUPPLIERS’ PROFIT MOTIVES, RATHER THAN PURCHASERS’ DEMAND OUTSTRIPPING SUPPLY.

THERE CAN BE NO DOUBT THAT REGULATORY VIGILANCE AND THOROUGH LAW ENFORCEMENT

ARE THE MOST EFFECTIVE WEAPONS IN DISCOURAGING UNTOWARD ACTIVITY IN THE PRIMARY, 

AND THE SECONDARY,  DEBT AND EQUITY MARKETS.

IT IS MOST IMPORTANT TO UNDERSTAND THAT SETTING UP, AND ENTERING INTO, TRANSACTIONS 

AIMED AT, EVENTUALLY, CALLING UPON GOVERNMENT GUARRANTIES  IS A GLOBAL INDUSTRY,

WITH ITS ROOTS ON WALL STREET (THE RECENT ENTHUSIASTIC BUYING OF OUR CURRENCY CAN 

BE TRACED TO THE ANNOUNCEMENT OF THIS INQUIRY).

TEMPORARY “HOME OWNERSHIP”  FOR THE LOW-INCOME ‘BUYERS”  IS AN IDEAL VEHICLE,

AS THESE PEOPLE ARE THE LEAST LIKELY TO BE ABLE TO SUE  FOR CONCEALED CIVIL AND/OR

CRIMINAL ACCOUNTING FRAUD, ETC.

THE COMMISSION IS UNDER A POSITIVE STATUTORY DUTY TO PROTECT ECONOMIC WELLBEING

OF ALL AUSTRALIANS AND, AS SUCH, MUST NOT MAKE RECOMMENDATIONS THAT MAY LEAD TO

ECONOMIC IMPERILMENT OF ANY AUSTRALIAN CITIZEN, DEPLETION OF PUBLIC FUNDS AND/OR   

WRONGFUL IMPOSITION ON CONSOLIDATED REVENUE.

WE ARE HOPEFUL THAT, IN ITS FINAL REPORT TO THE HOWARD GOVERNMENT, THE COMMISSION

WILL NOT FAIL TO REMEMBER ITS STATUTORY OBLIGATIONS AND WILL NOT RECOMMEND ANY

ACTIONS LIKELY TO PLACE IT IN BREACH OF THOSE OBLIGATIONS.

PETER SHERMAN

AUSTRALIAN CURRENCY TASKFORCE