Yemma's First Day and First Mistake

Morris Iemma's first major economic announcement as NSW Premier, the abolition of the Real Estate Vendor tax, is his government's first big mistake.

The vendor tax was doing its job, ie, dampening the overheated Sydney property market. The fact that he, or the people from head office that selected him, were spooked by a bunch of greedy property speculators and real estate agents does not bode well for the economic management of the state.

The measure may cause the market to drop further as investors dump their properties, or spark off another rise in housing prices that will make the inevitable correction all the more painful when it happens.