Madden’s Economic Snubbery
Planning Minister Justin Madden today writes about critics exhibiting cultural snobbery towards sprawling suburbs.
He goes on to discuss the rationality behind last week’s expansion:
Releasing land for homes in Melbourne’s west and north will allow for development where there is room, but not nearly as far out as some imagine…..Cranbourne in the east is 44 kilometres from the CBD — Werribee (30 kilometres), Melton, (30 kilometres) or Craigieburn (25 kilometres) in the west are not so far away.
Fair go Minister Madden, but what about applying the same rationality to the existing land already zoned residential? Prudence would see all land zoned residential be utilised to its’ full potential. We have written a number of times about former Commonwealth land at the Braybrook RAAF base, just off Ashley St. The trend is rife through any development.
Every day I cycle down Melon St, Braybrook and see a small building team slowly infilling one block at time. Over the last two years this land has been drip fed to the market in order to maximise profits. Wouldn’t it be nice if we all had the opportunity to hold people to ransom for one of the greatest moments in their life – gaining access to the Great Australian Dream?
Or would our morals (hopefully) call our conscience into line? Why doesn’t the tax system do this for us?
This entire RAAF site was sold off to the private market in the early 2000’s. Today one can pass through the area and still see at least 30% of this land vacant. Repeat – vacant! Land banking away to year long holidays, earning profits in their sleep whilst the rest of us engage in the daily slog.
In the middle of this housing crisis we have people begging for a piece of the earth to build on, but a concoction of inefficient taxes sees it more profitable to withhold this land from supply in order to extort prices.
RIP Richard Pratt – his reputation tarnished for price fixing cardboard boxes. Meanwhile the price of land is publicly released by various property lobby groups, in effect giving land speculators the heads up on when and where to sell. Why can land (needed to meet primal human rights for a roof over our head) be manipulated for profits, but throwaway cardboard boxes can’t be? Neither should, but such is the mystery behind our economic and legal system.
Is this economic snubbery due to the dominance of lobbyocracy on political decision making? Our right to vote is undermined if we have such little influence. We need economic freedom too. Then we can do what we really want. However, if the price of housing is double the long term average, we have less for food and fun, savings and investment. The wealth gap continues as policy makers avoid the too-hard box.
Madden should be called to account for this economic snubbery, but unfortunately too many youngsters are devoid of economic know-how, such that 200,000 young people will be manipulated into buying at the wrong time by the end of the federal FHOG this September.
Why doesn’t Minister Madden campaign to eradicate land banking by removing stamp duty and increasing and flattening Land Tax? The tax free threshold for Land Tax must be removed. Every time they increase it, the price of land increases, as fundamental economic law dictates.
An affordable block of land on the Braybrook site would incur barely $300 in yearly Land Taxes and $800 in rates. The tragedy with our rating system is that the family home will be paying 30% more in council rates than the land banker (due to CIV rating on the improvements, the house component). Site Rental rating is much more efficient. The rationality of this argument cannot be shot down.
We must use land wisely. Land is for housing, not hocking.