Prosper Australia

Today’s Age Artice Higher Rentals Seen as Spur for Investment by Chris Vedelago is a good prompter to peer behind the curtains of rental yield.

Despite the headline quoting a new report saying that gross rental yields are at an attractive 5.5% for investors, CommSec’s Craig James sums it up nicely:

“Investors are concerned just as much about getting a good capital return over time, and many are prepared to endure relatively low (rental) returns if the end result is higher capital gains down the track,” he said.

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Interesting developments in Canberra can be tracked via this ABC report:
Buy the house, rent the land: ACT’s new housing plan.

As many will know, it’s not the first time this has occurred. Read one of our most popular web pages: Canberra’s Land Leasehold system (1910 – 1971).

Letter to the Age

Thursday June 26th

WHEN we hear that the rental vacancy rate is less than 1% (”$155-a-week Lalor ’shack’ highlights rental crisis”, The Age, 25/6), we need to remember that this figure includes only dwellings offered “to let”. If it included vacant lots and other unoccupied properties that are not on the rental market, the vacancy rate would be at least 10 times higher.

One obvious solution is a holding tax of several per cent per year on the values of all vacant sites, including those with buildings that have been vacant for more than a month. To avoid the tax, property owners would build on vacant lots and seek tenants for unoccupied buildings.

Gavin R. Putland, Dandenong.

Geoff Forster

• The International Union for Land Value Taxation is launching a campaign to modify the UN Declaration of Human Rights. Article 3 at present reads: Everyone has the right to life, liberty and the security of person. The proposed amended version is: Everyone has the right to life, liberty and security of person, the enjoyment of which is contingent on the right of access to land . The right to land may be exercised indirectly, by sharing equally in the benefits that accrue to the community when use rights are assigned to others.

Article 17 is at present: (2) No one shall be arbitrarily deprived of his property. The proposed amended version is: No one shall be arbitrarily deprived of his property, including through taxation.

Article 29(1) is at present: Everyone has duties to the community in which alone the free and full development of his personality is possible. The proposed amendment is: Everyone has duties to the community in which alone the free and full development of his personality is possible. The life of the community is reliant on the performance of those duties, principal among which is the payment to the community of the value of the benefits received from it.
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What else need we say?

Understand why making ends meet is such a challenge and what we can do about it.

Famous Quotes

“The earth is given as a common stock for man to labor and live on. If for the encouragement of industry we allow it to be appropriated, we must take care that other employment be provided to those excluded from the appropriation. If we do not, the fundamental right to labor the earth returns to the unemployed.”

“Wherever in any country there are idle lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right.”
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A grasp of economic rent is vital to understanding geoism and the path to social justice and environmental sanity.

Short definitions are helpful but limited – the return to privilege; a free ride at society’s expense; unearned increment; excess profits that monopolists reap in the absence of competition; income derived from assets that cannot be freely produced by private economic agents; income (real or imputed) that cannot be justified as an incentive for private economic agents; or even the natural source of revenue for the community.

Sydney’s David Smiley continues his series wherein he fleshes out the meaning of rent through a string of vivid historical examples.

David Smiley

writes:
Most history books attempt to explain progress, poverty and conflict in terms of charismatic actors and political events, seldom in terms of fundamental causes. It is therefore refreshing to find, in A Traveller’s History of Italy (Lintner, V. 1989, Gloucestershire, Windrush Press), explanations in terms of land ownership.
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Karl Williams, Editor of Progress Magazine

What I’m about to write here would almost certainly land me in jail if it were written in Thailand. I’m about to criticize its monarch, King Bhumibol.

Yes, dear reader, it may be hard to believe that, in the 21st century in a modern and supposedly democratic nation, such a draconian punishment can still be meted out, but Thailand is the Land of Surprises in more ways than one. But, stranger still, this “respect” accorded to the king is not enforced by the police or secret service, but by the overwhelming majority of ordinary citizens. You see, so all-pervasive is the massive royal propaganda machine that the Thai citizenry themselves so wholly believe in the goodness and greatness of their monarch that they not only enthusiastically obey and serve their king, but vigilantly enforce obedience from any who might dissent.
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Robert J McAlpine, President Prosper Australia

The time for thinkers on economic matters has come! By neglecting the field of property valuation, mainstream economists have missed some of the most important factors in market price determination

There exists an almost complete chasm of two closely related economic considerations. One dealing with the abstract, which can vary between money market commentators – the other is concerned with the measurement of the market and its value in the marketplace. Each has developed contemporaneously but along separate and independent lines. Their origins were different, one – philosophical speculation, two – judicial and administrative necessity – land valuation backed by the land valuation courts.
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This article was presented at a late 1980’s meeting prior to ACT self government and published in the Canberra Times.

Terry Dwyer

ACT finances will come from three sources – taxes, grants and borrowings. I do not propose to say much about borrowings because borrowings are not a source of current revenue. Australian Governments are generally coming to the realization that borrowing for current deficits is a dead-end road . The end comes when you have to flog whatever you can to pay your accumulated debts and you still can’t pay the housekeeping bills. Borrowing, other than for capital works which will repay principal and interest, is a shifty expedient in Government finance which is best avoided.

Turning to grants, much is clearly outside the ACT’s control. We do however need to point out firmly and clearly to the Grants Commission that there are features of the ACT which do reduce its taxable capacity in comparison to the States. Apart from the obvious National Capital functions and the ACT’s increasing service role for the South-East of NSW, there are other disabilities such as the high portion of exempt governmental or diplomatic activity here. Again the ACT suffers more than the States from the Federal monopoly of income tax because of the high proportion of higher income and two income households in Canberra. Many of Canberra’s fiscal disadvantages are well set out in the ACT submission to the Grants Commission.
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