Howard woos Australian house-buyers in election campaign
Australian Prime Minister John Howard launched his general election campaign today with a pledge to provide tax breaks for people saving for their first home.
The plan would allow tax-free savings account for prospective, first-time home owners and cost around €992m over three years.
Mr Howard also said future government budget surpluses might be channelled into accounts to help young Australians enter the housing market.
Home ownership is an increasingly elusive dream for many of Australia's 21 million people after 10 successive quarter-percentage point interest rate increases since early 2002.
The rate has been raised six times since Mr Howard last went to the polls in 2004, promising to keep rates at record lows.
The latest increase last week brought the official lending rate to 6.75%.
Mr Howard ,68, Australia’s second-longest serving prime minister after holding the office for almost 12 years, hopes the launch of the final campaign of his 33-year career in federal parliament will turn around his polling woes.
He has been trailing the opposition Labour Party’s 50-year-old leader Kevin Rudd in surveys all year. The election is on November 24.
Both men are launching their campaigns from Brisbane, the capital of Mr Rudd’s home state of Queensland – a choice that underscores the Liberal-dominated state’s importance to the result of the coming election.
Queensland produces much of Australia’s largest export, coal, and miners’ futures are uncertain as Australia plans to reduce its greenhouse gas emissions.
Mr Rudd will be under pressure to also offer help to first-time home buyers when he launches Labour’s campaign Wednesday.
The Australian national newspaper meanwhile published poll results showing Mr Howard’s centre-right coalition trailing centre-left Labour by 10%.
Australia’s economy has increased in size by almost 50% since Mr Howard was first elected prime minister in 1996.
However, he warned in his campaign-launch speech of “storm clouds that are gathering on our economy”, including Australia’s worst drought in a century and high oil prices.
The country’s central bank left the door open today for further interest rate rises after raising its forecasts for core inflation in 2008 and 2009.
