Prosper Australia

Letter to the Herald Sun

Monday Jan 28th, 2008

It is appropriate that the surge in Melbourne home prices has rekindled debate on stamp duty, but not at all appropriate that the discussion has focused on the size of the duty instead of its base.

Stamp duty is a transfer tax on the total value of a property, including the building(s) and the land.

By taxing buildings, the duty deters construction and thus reduces the supply of housing.

And by separately taxing every transfer in the supply chain, it impedes the process of bringing new homes to
market (and discriminates against owners who need to move frequently).

The solution is to apportion the duty to the increase in the land value since the last transfer of title.

Dr Gavin R. Putland, West End, Qld

Read Gavin’s commentary on Stamp Duty and development levies

submitted to the Age on January 22nd, 2008

Dear Editor,

Martin Feil and Ernest Rodeck in “The debt penalty: a matter of great import to all Australians” (Opinion, 21/1) express concern at the accumulation of foreign debt, partly due to two decades of buying foreign goods instead of Australian.

It is often said that we cannot compete with Asian countries because of their low wages. That is only a small part of the problem. If one buys an item for $10 in a supermarket, the cost of labour in making it might be less than $1. The remainder goes to handling, marketing, profit taking, etc.

What appears to be the main problem is 55 of the 56 taxes imposed in Australia, most of which directly or indirectly end up increasing cost of production. It penalizes manufacturing. At the same time those who hold land, which only has value because of the community and the infrastructure provided by government, pay very little for the benefit. A realistic community resource charge (or tax ) on land values would allow scrapping most of the 55 taxes. A good start would be payroll tax.

David Barkly

Property lobby pushes all the usual red herrings whilst ignoring the speculative causes to affordability pressures.

Demographia International’s new report on housing affordability again pushes the “unending sprawl forever” mantra. Report author Wendell Cox rolled out all the usual criticisms of land rationing, infrastructure charges and bureaucratic tape.

“The effect of unending sprawl is to stretch government finance such that public infrastructure suffers throughout the city. The resultant doughnut development sees slum pockets develop throughout the city, breeding crime” stated Bryan Kavanagh from the Land Values Research Group.

“Cities that may have affordable land on the fringes suffer greatly from a lack of services that every respectable community deserves. Few of the leading cities in the Demographia survey rate well in the World’s Most Livable Cities indices for a reason” claimed Mr Kavanagh.

Of concern is the fact that ‘land banking’ is never mentioned in any property think tank related report. The heavily criticised ‘land supply’ issue is a diversionary tactic from the large tracts of vacant land that speculators have accumulated. Speculative vacancies act to enforce scarcity and push up land prices.
(more…)

Read this PBS transcript on Monopoly’s original intention to teach about the dangers of land monopoly. Understand how the world’s most popular boardgame was subverted to teach young people the opposite to the games original intent. It is interesting that not more people have twigged that something is wrong in the land game when most Monopoly games end with someone in tears.

With a new book out by Philip E Orbanes that glosses over its’ georgist inspirations, ‘Monopoly: The World’s Most Famous Game–And How It Got That Way’, it’s time we remind ourselves of its original intent by reading either this PBS TV special by the History Detectives, or go all the way and read the classic detective-like book The Billion Dollar Monopoly Swindle by Richard Anspach, available in our bookshop for $25.

by Leo Foley
The primary source for this paper is “Canberra in Crisis” by Frank Brennan, 1971

The Road to Leasehold – the origins of the Canberra leasehold system..

Canberra is the offspring of politics and a social ideal.

• The politics were those of Federation and nation making.
• The ideal was one of social and economic freedom.

In the early years of Federation, there was a widespread belief in the need for government ownership of all the land within the proposed federal territory. It was considered that the taking of the unearned increment for the people would make the capital city a paying proposition within a few years. In 1901, the Prime Minister, Edmund Barton spoke of the territory to be chosen for the seat of government: “we shall be able to get the land on fair terms, lease it on fair terms and still make a profit for the Commonwealth”.

These were the years when the words ‘unearned increment’ were basic to any discussion of leasehold tenure in the proposed Federal Territory. As King O’Malley (Labour, Tas) saw it, ‘Every dollar spent by the people of Australia in the erection of that capital will create an unearned increment in the property for miles around. The question is, are the people of Australia prepared to spend thousands, yea millions, and then lose the benefit of their expenditure? I say the unearned increment created by the expenditure of the people’s money belongs to the people…”
(more…)

7pm, January 10th, Horses Bazaar, 397 Little Lonsdale Street

Be part of a world first as international comedian Ross Ashcroft (London) delivers his first geonomics based comedy routine! Yes its time we took the mickey out of our two dimensional economic system and laid it bare for all its worth.

Ross runs the Magdala Comedy Club in London and has performed at Edinburgh’s Comedy Festival. He is also a good friend of Fred Harrison, author of ‘Ricardo’s Law’. Ross is over here on holidays and couldn’t resist the temptation to engage in a little ‘rule brittania’ whilst here.
(more…)