Welcome to the new Evolving Economics e-news, combining both the Prosper and Earthsharing Australia e-mail subscriber lists. The two groups represent different focus points: Prosper on tax efficiencies and housing, Earthsharing overlaps a little, primarily messaging for younger, greener types interested in housing, infrastructure and true cost economics. Thank you for your patience – it has been a little while since we sent an email. Now let’s get into the interesting stuff!

The first few words in the Treasurer’s budget speech could have been written by a Georgist

“This Budget will help build a more prosperous nation.

Every generation before us has contributed to the quality of life that we enjoy today.

Prosperity isn’t a matter of luck.

Prosperity is not a gift. It needs to be earned.“

Unfortunately that’s about as close as it got to addressing the unearned incomes those who own natural resources or licensed monopolies enjoy. No mention of housing, let alone land. Negative gearing didnt rate a word, neither did the billions made in unearned incomes by miners, bankers or the staggering $484bn that we as home (land) owners benefitted from last year. Nor was there discussion on how the 2% ‘budget repair levy’ will encourage more tax planning, away from productively based incomes and into speculatively based capital gains. Pensioners too will no doubt be forced to engage in such behaviour, just to survive. Gavin Putland sums up the tax expenditures leaking holes in our budget with the wryly named Top 10 reasons why you have to work until you are 70.

Some of the #Budget2014 tweets posted or re-tweeted via @earthsharing

Curbing pension payments from 2017 to spur more property speculation, driving the wealth gap as students pay more for uni #Budget2014

#Budget2014 in short – ‘tax policy certainty’ assured with switch away from taxing unearned incomes (mining) and onto Packer’s mugs 

Rich kids in #PrivateSchools get $8.8bn #PublicSchools get $4.8bn? I try so hard not to swear…but…#FFS!!!

dont look now (budget website crash doh) but tax take as GDP % keeps rising into 2017, from 23.6 – 24.9% #Budget2014

The age of entitlements continue for the @HIAhousingvoice. No voice for FHOs – just lean into $600k debt #auspol #budget2014

Blessed are the daughters of battler mining billionaires, for they will inherit the subsidies. #auspol #Budget2014

Reorientation away from taxing the privileged and towards Packer’s mugs – those high income earners who still pay tax #Budget2014

#communityradio has been spared tonight and will continue to be funded http://www.committocommunityradio.org.au  #Budget2014

‘We must not leave our kids worse off’ but looks the other way on #aushousing. FHO’s borrow $300k? #Budget2014

‘Prosperity has to be earned’ except if you are a property speculator or miner #Budget2014 #auspol #rentseekers

location location location #ThreeWordBudget

Kerry Packer’s famous statement ‘only mugs pay taxes’ may well come back to bite this Hockey budget. Of interest is the $80bn cut to state funding, a strategy timed to force state governments to either beg for an expanded GST or use their own tax bases more effectively (with an enhanced Land Value Tax).

Coming events

Tuesday, May 27, 6.30 – 8pm – new members and those interested in new economics night – an informal gathering at our Punch Lane offices to discuss any economic issues, concepts or politics of the day.

David Collyer will host the evening for a roundtable discussion. Perhaps you require further detail on  economic rent – why is it so important? Or what can we do about the influence of donations on the political process? Come and relax amongst like minded people trying to make sense of this world.
RSVP to assist our planning. 

Tues June 24, 6.30 – 8pm – Bob Keall from Resource Rentals Association of New Zealand will be in town presenting his latest on global economic trends in The Way Forward Under Rentier Rule. As a genuine storyteller, Bob will be an absolute pleasure to see in action. Lock in that date, more details soon.
RSVP – donation to cover refreshments.

Evolving Rentiers

As we engage in the state and federal budget media cycle, we’re concerned at the brazen rent seeking agenda.

The Commission of Audits was purely a positioning paper for further privatisations – handouts to the privileged as outlined in Commission of Auditing Rent Seekers.

If the Abbott government was serious about budget deficits, they would address tax expenditures. The IMF placed Australia as the worst in the OECD. The income washing by those in their pension phase (over 55) through their super account one day and out the next to achieve a 30% income tax discount is a rort that must end. There’s $30bn alone there. Trust funds are another untouchable by our Treasurer, Mr Entitlements, Joe Hockey.

The Victorian State Government must reform housing related policy urgently. The state budget announcement saw an $11million infrastructure spend reliant on further privatisations in Rural Finance and the Port of Melbourne. We need to change the narrative so that privatisation is understood as ‘code for failed public revenue raising, requiring short term electioneering slush fund’. The $27bn building blitz could barely make it any more obvious its an election year. And to see the Melbourne Rail tunnel will swing by Fishermen’s Bend, where a number of major Liberal Party donor developers are rumoured to own large land holdings, makes ones head spin.

Infrastructure spending seems to be a common theme but without an effective financing mechanism, this just locks us into more expensive financing for increasingly irrelevant public interest projects. 

Senate Housing Affordability Inquiry

Since we last communicated, the Senate Affordable Housing Inquiry has published all submissions.

The website reveals at least seven submissions from Prosper members and related supporters. Download the various policy reform approaches:

Prof Frank Stillwell – (PDF 162 KB)
Ashley Holmes – (PDF 192 KB)
Phillip Soos, Paul Egan for Prosper (PDF 578 KB)
Saul Eslake (largely based on his Henry George dinner presentation – (PDF 227 KB)
Catherine Cashmore – (PDF 137 KB)
Cameron Murray – (PDF 925 KB)
Karl Fitzgerald for Eartsharing (PDF 210 KB)

A random selection of the 211 submissions sees a number with similar reform agendas. Michael Basso, who we have no connection with, delivered this excellent submission.