A tiger by the tail !

Kevin Rudd's government has a decisive decision to make ! Whether to end the first home buyer's scheme at the end of June - or to let it continue for another six months.

Damned if he does ... and damned if he doesn't !

If the scheme ends in June it is inevitable that the Real estate industry, the building industry and the huge supply infrastructure that supports the building industry will fall in a hole !

The sale of homes will slow to a trickle and there will be a vast lay off of sales people, those in the building trade - and the vast factory spectrum that produces building products.

The generous first home grants that provide $ 14,000 for existing home purchases and $ 21,000 for newly built homes has produced a reason to concentrate sales in the present time structure. When it ends, there will be an inevitable hiatus.

There have also been unintended repercussions for those in the renting market. The rush to get a foot on the home ownership ladder has concentrated home sales on the lower end of the price market, and induced the owners of rental stock to sell while prices are more favourable.

As a result, rent costs have risen sharply and there is a gross under supply of rental accommodation. We are therefore facing an increase in the number of homeless people - unable to find a place to rent at an affordable price.

On the other side of the equation, the ranks of first home buyers are mostly those who have borrowed to the max - and are young and vulnerable to job loss if the ranks of unemployed do exceed ten percent - as is predicted by many economists.

The first home grant scheme will have been a boon to many - provided this recession is short lived and does not become extreme. Otherwise it is simply a money trap - leading to default - home loss - and in many cases an ongoing debt if a price massacre erupts because of home resumptions by the banks.

The government may be wise to ease itself out of this dilemma slowly. Stopping the scheme dead in the water may be nothing short of disaster.

Perhaps the better option would be to retain the scheme, but to lower the grant progressively over a five year period. At least then those not sufficiently financially stable would have reason to wait a few months more rather than jumping in to meet a deadline.

In politics - the hardest decision is the one where something given is being withdrawn.

That has a tendency to swiftly come full circle - and bite you on the bum !