Prosper Australia

6 – 8pm Sept 16th

@ Horse Bazaar

In conjunction with our I Want to Live Here film competition, we are running a Speed Renting night to assist in the pursuit of the perfect living environment.

Speed Renting is similar to Speed Dating, though this time home hunters meet house holders. It’s time share householders shifted from notice boards, websites or frantic rushes to inspections and towards the warm inner glow of good chats and a beer.

Good housemates now, good rents after some further reading!
More event details

photo credit: Svadilfari

by Gavin R. Putland

(Address to the Melbourne Unitarian Peace Memorial Church, August 17, 2008.)

Thank you, Peter. And thanks to all of you for welcoming this former Trinitarian Methodist, and current Trinitarian Orthodox Christian. I’m here as Research Officer for Prosper Australia, which is Australia’s leading Georgist organization. A “Georgist” is one who believes that government should be financed out of the rental values of land and natural resources and other monopolies, rather than from taxes on productive activities. I’ve been able to establish that at least one prominent Georgist, namely Dr. H. William Batt of Albany, NY, is a Unitarian. But we’re a broad church.

Henry George, the recognized founder of our global movement, was Episcopalian. Max Hirsch, the early leading light of our movement in Australia, was Jewish. William Vickrey, the most Georgist economist to win the Nobel Prize, was a Quaker. And the people I presently work with include two Roman Catholics and a Buddhist. For good measure, our present executive committee includes at least one member from each of the Liberal Party, the Labor Party, the Greens, and (if they still exist) the Australian Democrats. So collectively we’re a broad-minded group, able to accommodate a broad range of individual rigidities.

When I was asked to speak on rising oil prices, I saw that there were many aspects of the problem that one could talk about. Some people say the recent spike in oil prices was a one-off, caused by speculators taking refuge in commodity markets. In the longer term, one can argue about whether the price rise is mainly driven by depletion of supply, or rising demand, or the intention of governments to put a price on carbon emissions, either by taxation or by a cap-and-trade system. And even if we admit that the basic problem is the finite amount of oil in the ground — which seems pretty obvious to me — we still don’t know how uncomfortable things are going to get, for at least three reasons.
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“Communally created values must be safeguarded, and it is the function of government to collect into the public treasury the value attaching to land by reason of the presence of the people, as that is the natural source from which public revenue should be drawn.”

“This small bespeckled man was always looked upon in the parliament” – so says Clyde Cameron – “as the greatest debater the Parliament of South Australia had ever seen”. Clyde (a cabinet minister in the glory days of the Whitlam government) also makes the claim “that Craigie really was a very great figure – I think really the greatest man of this [20th] century, and it is a tragedy that he was not given the opportunity to play a more important role in the politics of our country”.
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Fred has gone digital! He also has a new website, and a new blog with the title cheekily borrowed off our own Renegade Economists radio show. Interest in his work is really taking off, such that a regretful property developer has made a 2 part clip featuring Fred’s analysis of the 18 year cycle. It’s a must watch:

photo credit: Paul Keleher

Gavin R. Putland

In light of the recent Tax and Transfer Review by the Federal Government, lobbying interests are moving to reduce capital gains taxes.

The term “capital gain” contains a deliberate contradiction: real capital doesn’t gain.

Capital, as defined by the classical economists, is a product of human effort. Land is not; its supply is fixed. When the effective demand for land increases because population grows, or because people have more money to spend, or because public investment in infrastructure makes people willing to pay more for land in the serviced locations, there can be no compensating increase in supply; therefore, in the long term, land increases in value. But if capital increases in value for any reason, the increase induces production of more capital, which competes with the existing capital, causing values to fall again.

Therefore any gain in the value of capital is temporary; in the long term, capital depreciates due to wear-and-tear and obsolescence. An exception arises when the owners of capital are given some sort of protection from competition, like that which nature gives to the owners of land — but in that case the “capital” has been stripped of its defining economic property and has become, for economic purpose, land-like.
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photo credit: x_jamesmorris

Wednesday’s release of the Architecture of Australia’s Tax and Transfer System
review paper saw commentary by lobby groups attacking capital gains taxes.

PETER ANDERSON, CEO ACCI: Our capital gains tax has not been looked at in an analytical way for more than 20 years. And capital gains tax as it currently is structured is a tax on investment. So we need to try and reduce the level of taxes on constructive investments.

The property lobby is also wanting to look after their interests. However, we were heartened to read in the government’s Tax and Transfer paper:

The OECD (Johansson et al 2008) has recently undertaken a cross-country study of the effects of different taxes on economic growth. The indications from this analysis are that property taxes have the least detrimental impact on growth, followed in order by taxes on consumption, taxes on labour income and taxes on capital income.

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Read the OECD report – Do tax structures affect aggregate economic growth? Empirical evidence from a panel of OECD countries
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photo credit: Torley

David Smiley

All countries save about 25 percent of what they produce, their Gross Domestic Product or GDP, for investment as capital in future production. In national accounts these “savings” include environmental damage and natural resource depletion incurred in the process of production. This does not seem a very good measure of sustainable development, and the World Bank has come up with a better one. The Bank subtracted from Gross Domestic Savings, the cost of carbon dioxide damage, and the values of energy depletion, mineral depletion, and net forest depletions. The result of these subtractions the Bank called Genuine Domestic Saving, or GDS, and they are astonishing.

World average GDS was about 13 percent. Both World Bank regional and country data were tabulated in World Bank World Development Indicators report of 2001, pages 180-183. For East Asia and Pacific, a region dominated by the land reform countries of China and South Korea, GDS was 25 percent. Moving to areas of political turbulence, GDS for Sub Saharan Africa was 3.9 and for Middle east and North Africa minus 1.3 percent.
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Equal and inalienable rights to the Earth

- ground, water and air:
when and how should one allow enclosing the commons?

Tues Sept 2nd

This year we are fortunate to have Dr Terry Dwyer deliver the Commemorative Address. As a highly respected Resource Economist, Terry has chosen this year’s topic based on the omnipresence of resource privatisation. With water trading spreading in influence and Carbon Trading soon to be in operation, this address will be highly relevant to today’s hot topics.

Terry Dwyer is a visiting Fellow, National Centre for Development Studies, Asia Pacific School of Economics and Management, Australian National University. He is also a practicing lawyer.

This is a very special event on our calendar and has been held annually in Melbourne since 1897. Henry George was a highly influential economist at the turn of the 20th century who took the writings of Classical Economists to their logical conclusion: simplify business and community life by capturing most of the value the community and business create. He saw this value reflected in higher land values and controversially found that such land value appreciation could fund the abolition of all other taxes.
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