The Victorian branch of the Australian Property Institute Plumbs New Depths

by Bryan Kavanagh AAPI

Today’s Victorian API news demonstrates the Australian Property Institute is at risk of losing its way:

“Property taxes shoulder Vic budget

The Victorian government is becoming addicted to property taxes, which will raise over $6 billion in forward estimates for the 2013-14 Victorian State Budget.” [My emphasis]

The phrase “becoming addicted to property taxes” is hardly a sober assessment. Whose barrow is being feverishly pushed here?

The API has apparently got to the stage where the organisation, founded by statutory valuers in 1910 mind you, now joins the ranks of urgers and touts – like the Real Estate Institute of Victoria – in agitating against land-based revenues.

If the author was agitating against that vile instrument conveyancing Stamp Duty, I would instantly add my support.

But bundled with Stamp Duty in ‘property taxes’ is one of the most economically efficient and least distorting of all the revenue tools available to government:  State Land Tax.

Of course, I was impelled to reply as follows:

“THE Victorian government is becoming addicted to property taxes, which will raise over $6 billion in forward estimates for the 2013-14 Victorian State Budget.”

An institute purportedly representing valuers— it was after all founded in 1910 by Commonwealth Taxation Office valuers — should know the case for reforming and extending the current State Land Tax was made by Dr Ken Henry in  Australia’s Future Tax System. The words “becoming addicted”  above disgraces  the person who wrote them and diminishes the professional standing of the API.

This is the professional institute of which I was once proud to be a member.  Previously known as the Australian Institute of Valuers, it is rapidly becoming indistinguishable from just another branch of the property lobby.

 

5 Comments

  1. THEO10-05-2013

    It seems it is becoming more and more common to read about so called ‘respectable’ institutions lose track or forget to uphold principles that were the reason or basis for their creation. That is what happens where the underlying factor called ‘economic interests’ take priority over everything else. I expect it will only get worse as the economic climate continues to deteriorate in Australia

  2. George14-04-2014

    The australian property institute is the professional institute of which was once proud to be a member .

  3. Steve21-05-2014

    One of the leading profession institute is the australian property institute.and its registered with the Australian Property Institute

  4. Jim Cone14-10-2017

    See “Herald Sun” of 13/10/2017 Re: “Labor lands tax grab” – Annual property valuations mooted.
    (1) Why are valuations required at all for the levy of Council Rates? I get no more from my Council whether I live in a $500000 house or a $200000 house. Seems good money spent by council for no tangible result.

    (2) Re Annual Valuations of property: does this include farming land: that is, commercial farms, rural smallholdings, hobby farms bush blocks? If so, there are not nearly enough “boots on the ground” – meaning – qualified “Rural” Valuation Officers.

    Where to now?

    Jim Cone
    SPINZ AAPI

  5. Bryan Kavanagh16-10-2017

    Hi, fellow-valuer, Jim Cone! Good to hear from you! The Prosper Australia team referred your questions to me.

    First, most people fail to understand the basics, namely, that escalating land prices [the ever-increasing private capitalisation of land rent] comes at great cost to people and the economy. In “The Wealth of Nations”, Adam Smith noted that privatised land rent adds one-third to costs and should therefore be publicly captured. John Locke said that all taxes come from land rent anyway, so why not put them there in the first place, in order to avoid all the on-costs and deadweight that other forms of taxes inflict? [Interesting, too, that Moses commanded “The land shall not be sold”, but Jew and Christian both seem to manage to side-step that one!]

    It’s eminently arguable Australia’s current wage and profits squeeze is result of the speculative rent-extractive economy (including real estate and banking) winning out at the expense of the wealth-producing economy.

    Now, the municipal budget is simply apportioned between ratepayers on the basis of their property values (which, by the way, cannot be avoided in the same way some companies ‘offshore’ to avoid income taxes. Municipal rates at least get a small part of the land rent many economist are now arguing we need to be capturing, instead of counter-productive taxes on goods, services & incomes. Of course, ratepayers need to inquire about, and question what council is funding in the municipal budget! But I’m unable to think of a fairer way of breaking up council costs (except to have them on land values only, so as to not deter property development and redevelopment.)

    Re question 2, Jim. I’ve heard some valuers say they’ll not be able to carry out annual revaluations, instead of the current biennial valuations. However, in the light of computer-assisted mass valuation (CAMA) techniques, I’d be prepared to bet that in-house or contract valuers will be found who will be able to conduct effective annual revaluations. I may be wrong, but I feel sure that my former company, which values ten Melbourne municipalities, will be able to rise to the occasion.

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https://prosper.org.au/2013/05/09/the-victorian-branch-of-the-australian-property-institute-plumbs-new-depths/