Review Notes: Housing Market and Greg Jericho

review notes: The review notes rising protectionist sentiment around the world with tariffs imposed by the United States on steel and aluminium prompting retaliation from China and suggests Australia should respond by maintaining low barriers to trade and investment, according to The Guardian. We have reached the bottom of the housing market but any rebound will be slow to come Greg Jericho Read more While government assistance has fallen in most industries, the Productivity Commission noted it had risen in primary production industries due to numerous drought assistance measures including payments of 12,000 per household and bigger concessional loans. In its annual trade assistance review, released on Wednesday, the commission also warned the proliferation of government finance facilities including for small business and the Pacific imposes a risk on taxpayers the federal government has failed to disclose. The commission noted it has not reviewed drought programs since 2009, when it found they acted like implicit insurance without requiring a premium and potentially altered the behaviour of some farmers . It noted that new federal government-funded loan schemes have been introduced despite the earlier finding that concessional loans created a number of perverse incentives and unintended outcomes that made it ineffective in achieving its stated objective of building farmers' self-reliance to manage climate variability and preparedness for droughts . The schemes gave farmers an incentive to build or not reduce debt, not to diversify income sources off-farm, and provided a windfall gain and competitive advantage against other businesses, it said. The Productivity Commission noted since its last annual review the federal government has created a 2bn Australian Business Securitisation Fund to lower the costs of small business borrowing and a 1bn infrastructure lending facility for Pacific Island nations. The commission said the government has extended cash grants out of step with income support available to other Australians suggesting they are now better thought of as industry assistance . Cash grants and state schemes to pay for fodder reduce the incentives for farmers to manage their properties well over climatic cycles and may also reduce the incentives to de-stock during periods of drought it said. (news.financializer.com). As reported in the news.