Prosper Australia

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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With the growing pressure to find affordable accommodation and our excitement at the Canberra Land rent proposal, we thought it high time we showed you a growing trend through the northern hemisphere - Community Land Trusts

by Prosper Tasmania’s Leo Foley

(Based on material from the Institute of Community Economics, Massachusetts)

A Community Land Trust (CLT) is a democratically controlled nonprofit organization that owns real estate in order to provide benefits to its local community - and in particular to make land and housing available to residents who cannot otherwise afford them.

CLT’s recognise that land is a finite resource and will naturally appreciate in time due to social progress and population growth. This natural appreciation in land values is recycled back into the Community Land Trust to ensure that future home owners can afford to enter the CLT.
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By Bryan Kavanagh

Treasury’s mission is “to improve the wellbeing of the Australian people by providing sound and timely advice to the Government, based on objective and thorough analysis of options, and by assisting Treasury Ministers in the administration of their responsibilities and the implementation of Government decisions.”

It aims to assist:

1. A sound macroeconomic environment
Although it covers monetary, fiscal and monetary issues, Treasury has little or no understanding of the theory of valuation insofar as it relates to the national real estate market, a proven driver of the economy. This is demonstrated by the manner in which it allowed the residential real estate bubble to continue develop ever since 1999. Of course, it is possible that it did offer advice to the government in this regard but was ignored. If this was so, we need to know so that blame may be sheeted to the Howard government.
Mark: 2/10
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by Anne Schmid

JUNE 2006

This submission is made with particular reference to the proposed introduction of the waste collection charge.

I ask the question – Are user charges better than rates? What is the next charge going to be? Traditionally councils have relied on rates for their revenue and a push to obtain local revenue from sources other than local land values leaves councils vulnerable to vested interests, pressure groups and anti social forces.

I believe that unless we have local revenues collected from site values all words about community building and equity is merely rhetoric.

Councilors, ratepayers and council advisors must recognize that council services generally, whether a transport system, water reticulation, sewerage, or rubbish collection, enhance land values. Ethically it is on the land values so created that the annual rates should be calculated as in site value rating. CV rating corrupts this to a large extent as properties are rated on improvements as well as site value. User charges disconnects completely any recognition of the relationship between services and land value.
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by Karl Fitzgerald

as published in Arena Magazine, Feb-March, 2008, Edition 93

In a period where the twin crises of global warming and the wealth gap are attacking society from both sides, policy makers are continually limited in their effectiveness by a two dimensional approach to economics.

Land prices have increased at 4 times the rate of GDP and dwarfed wages growth by 1000 to 1 since WW2 (The Poverty Inquiry to end all Inquiries, Tony O’Brien, Figure 1, p5) . Such damning statistics beckon the ALP to take a hard look at the economic fundamentals undermining union wage demands. For Julia Gillard’s ‘War on Poverty’ to be successful, policymakers must look outside the square.

2008 marks the half way point in our promise to halve world poverty with the Millennium Development Goal’s 2015 deadline. With the wealth gap accelerating in both Developed and Developing countries, a serious flaw is evident in modern economics.
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by Dr Gavin Putland

Given that the economy is managed so that a certain percentage of people must be losers, the majority stands to gain by ensuring that the losers are selected not from its own ranks, but from the ranks of some already disadvantaged minority. That’s why, forty years after Dr. King’s mountaintop” speech, African Americans still haven’t reached the Promised Land. The solution is to minimize the need for losers. Here’s how.

Forty years ago, as Martin Luther King Jr. spoke of the Promised Land and prophesied “I may not get there with you,” a quiet revolution in economic theory was beginning, which would ensure that Dr. King’s hearers, except perhaps the occasional Caleb or Joshua, wouldn’t get there either. The architects of the revolution didn’t plan it that way, but that’s the way it turned out.

The revolution concerned the relationship between unemployment and inflation. A paper by Milton Friedman, published in the month before Dr. King spoke, and another by Edmund Phelps, published a few months later, gave reason to believe that in the long term, if unemployment falls below a certain rate, inflation speeds up, whereas if unemployment rises above that rate, inflation slows down. That magic unemployment number became known as the Non-Accelerating-Inflation Rate of Unemployment, usually abbreviated by the acronym NAIRU.
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by Bryan Kavanagh

As featured in today’s Business Age, 28/03/08

WHEN it mattered, the US Federal Reserve, US banks and rating agencies failed the risk-management test — in much the same way that Australia is now failing it.

This is because none of these bodies comprehends the manner in which the real estate market leads the economy. Many considerations flow from this, because businesses and individuals borrow against the value of their property assets. So when real estate bubbles burst and banks and mortgagors are left exposed, analysts flounder with such hogwash as “business cycles and recessions are a natural part of the financial landscape”. Another knee-jerk reaction to systemic failure is simply to blame banks and borrowers. It seems anything will do, rather than tackle the fundamental flaw in risk management.
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With the recent passing of the highly respected Georgist Clyde Cameron, we feel it is timely to look at the wisdom of his core beliefs:

EXTRACT FROM AN ADDRESS BY THE HON.CLYDE R. CAMERON A.O.

But now it is an oversimplification to say that the lessons of the Maritime Strike of 1890 were the sole reason for the formation of the Australian Labour Party in the following year. In South Australia; the seeds of discontent were sown on 28th December 1836, when the first white settlers came ashore at Glenelg. Among them were unemployed working men in search of work in the new colony.

South Australia was the only Australian Colony that did not at any stage rely upon transported convicts for cheap labour. And yet the real cost of employing what passed for free men was very much less than the cost of housing., feeding and guarding convict laborers in New South Wales, Victoria, Western Australia and Tasmania.

South Australia was able to prove that wage slavery can provide cheaper labour power than any other form of slavery. Slave owners have the responsibility for feeding and housing their human beasts of burden and of keeping them healthy enough to perform a full day’s work.
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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.