Mark Wadsworth

This is a spare 'blog in case my main 'blog at markwadsworth.blogspot.com isn't working

They’ve not thought this one through either.

Spotted by DNAse in The Grauniad:

… as of Friday, the state government of New South Wales will pay residents A$7,000 (£4,500) to leave [Sydney]. It’s part of a new scheme to boost the population and economy of country areas.

“Regional NSW is a great place to live, work and raise a family – these $7,000 grants will provide extra assistance,” said the NSW deputy premier, Andrew Stoner.

The one-off grants to move to country areas will be payable to individuals or families provided they sell their Sydney home and buy one in the country. The country home must be worth less than $600,000 (£390,000), something that won’t be hard in most rural areas. It will cost the taxpayer up to $47m (£30m) a year.

As much as boosting regional areas, the scheme is also about making Sydney more liveable. The city’s population is 4.5m and predicted to grow by 40% over the next 30 years, putting unprecedented pressure on infrastructure and housing.

The immediate point is that this is a subsidy to rural land values – the price of a country home will merely go up by $7,000 because yer ex-Sydney household has $7,000 more to spend. And of course, it’s only Sydney homeowners who get the bribe if they move, not Sydney tenants, so indirectly it must be a subsidy to Sydney homeowners as well.

But why encourage people in Sydney to sell their houses? How does this get the population down – won’t they sell their houses to, er, somebody who wants to move to Sydney?

Slapping Sydney homeowners with Land Value Tax would be a much more sensible way of going about things – such a tax tends to increase the population, of course (because small households will be replaced with larger households who are more able to share the cost), but they expect the population to increase anyway, so why not cash in?

This gives the government the money to pay for infrastructure improvements in Sydney, if appropriate, or they can spend the money on making the countryside a more attractive place to live, or paying for resettlement grants or a Rural Citizen’s Basic Income or something.

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