Rudd ripped me off too

OPPOSITION Leader Kevin Rudd's "me-too" grab for policies apparently doesn't stop with photocopying Coalition pledges.

An independent property market expert now claims his proposal to ease the burden for first-home buyers is actually a rip-off of a scheme she proposed exactly one year ago. Not only that, but Melbourne-based Monique Wakelin says Rudd's ignorance of the fundamentals of economics have twisted her plan to help those struggling to enter the housing market into a nightmare . "He hasn't taken into account the fact the principal property markets, where most people want to live, will grow in value well beyond what they will be able to save under his plan," she told me yesterday. "His re-write of my plan is onerous and prohibitive and restrictive. It is completely ineffectual. It's not grounded in reality and shows he has no idea what he is talking about." That aside, what did Wakelin really think about the Mandarin -speaking former bureaucrat knocking off your idea? "The plan he announced bears a remarkable resemblance to a plan I first publicly proposed for a tax-based savings incentive scheme during a property industry address in November, 2006," she said. "So I don't have any problems with the core concept. "I again outlined this idea on Melbourne radio last February and have done so on several occasions since in numerous public forums." But, Wakelin quickly added, Rudd's idea that first home buyer savings could only be accessed after four years, that the account would have a $10,000 cap on annual contributions and an account balance limit of $50,000, simply ignores the fact that, short of national economic meltdown, house prices in the major capitals are going to keep rising in the medium term. "He must have missed something in regard to house figures Australia-wide," she said. "In the major capital cities, medians are already above $400,000 and there are no signs of any dramatic slowing in prices across 2008 and into 2009." Wakelin, whose property data is supplied to The Eureka Report, said that under Rudd's plan anyone over 18 who meets the eligibility criteria for the first-home owners' grant would be able to establish a first-home buyers' savings account. The first $5000 invested in a year would be taxed at 15 per cent rather than the normal tax rate that might apply. In addition, an extra $5000 a year could be paid into the account from after tax income. The savings would have to be left in the account for a minimum of four years, and then, if the account holder decided not to purchase a house, could be rolled over into a superannuation fund, or accessed, minus the tax concessions received. Wakelin said it was unreasonable for the earnings to be taxed, especially since interest rates were comparatively low even after last week's rate hike. She said the scheme was designed to be a savings-assistance plan - not a superannuation-style investment. It also has to be noted that, despite Labor's savage campaigning on the six interest rate rises that have taken place since the last election, they have only risen by a total of 1.5 per cent. Under former Labor leader Paul Keating, rates rose by 2.75 per cent between August and December, 1994, when he used rate rises as a blunt instrument to attempt to cudgel inflation back to a manageable level. On the Rudd scale, rates under Howard would have to have risen 11 times to match Keating's savage attack on Australian households - or, in Rudd-speak, working families. Wakelin cannot understand how Rudd failed to note that house prices in the principal markets are rising more rapidly than the rate at which the proposed the level of savings would increase. "In four years time, $50,000 will barely cover the stamp duty," she said. "Stamp duty works on a sliding scale - the higher house prices go the more you pay. State governments love it!" Rudd, famously, made a late payment of stamp duty on a property he bought at a heavily discounted price from the directors of a key Labor Party asset-controlling and fund-raising company when he was director-general of Queensland Premier Wayne Goss's Cabinet Office, the most senior public servant in Queensland. He didn't pay attention to stamp duty then - and he obviously learnt nothing from his experience. Wakelin says the states will eat up the savings from his first-home buyers' plan, as the NSW Government has already done with every grant offered by the Coalition Government. "Under Rudd's plan, $50,000 will be added to house prices - it's an ill-conceived, knee-jerk number." Wakelin said. It is clear Rudd doesn't know whether he put together a savings plan or an investment incentive plan. Either way, first-home buyers will lose if they buy Rudd's $600 million lemon.