Public Education Priorities!

Thursday February 26th, 6.30pm

Level 2, 22 Punch Lane, Melbourne

Presenter: Karl Fitzgerald

RSVP

Last year was Australia’s 3rd hottest on record. The likelihood of a radical future grows with each day we do not take action.

The need for greater economic flexibility is vital. How can the economic system support cyclists and seaweed cultivists for their carbon commitments? Dozens of changes are needed in a manner that does not drown the economy in green tape. How could we finance a world class train network whilst encouraging urban infill? Provide tax incentives for science as we manage fisheries more sustainably?

Join 3CR’s Renegade Economist Karl Fitzgerald for a dynamic presentation on the economics of possibility. This workshop is part of the Sustainable Living Festival. Make sure you check out the program and catch some of the great events and workshops happening all around Melbourne from February 7th – March 1st.

David Collyer recently submitted to the Federal Government’s Budget submission process. He raised concerns over negative gearing and the largesse allowed to rent seekers. He states:

The GST’s reduction of after-tax labour incomes has a corollary – a lift in after-tax private capital incomes.

Prosper’s Project Director Karl Fitzgerald also sent a budget submission to the Victorian State government on the need to improve the taxation of economic rents. The submission covered Land Tax thresholds and the need to remove the ineffective stamp duty discount for First Home Owners. The submission then moved on to replace stamp duty with a broad based Land Tax. Perhaps most importantly was the need for a public education campaign on these issues. For decades economists have supported the efficiency gains from such reform but the political process always breaks down in the face of vested interests. A long term education campaign must be undertaken. You will read more about these submissions soon. Next – the South Australian tax inquiry. Will yet another inquiry support our reform agenda? Public education please!

In other political interactions, Karl was asked by Cr Stephen Mayne to speak to a motion passed at this week’s Future Melbourne council meeting. The motion was designed to raise concern at the recent Victorian State government rate pegging. Cr Mayne raised many good points about the danger this posed to council sovereignty, but should also acknowledge that State Land Taxes have been more than halved in the last 20 years. Read the post for more.  

Following on from their analysis of real estate holdings by Victorian Parliamentarians Phil Soos, Paul Egan and Lindsay David turned their attention to Queensland’s politicians and finding $91 million in property holdings. The authors ask the public to critically consider if 2.2 properties per member could be affecting the decision making process when it comes to formulating housing and taxation policies. Recommended reading.

Phil Soos was also quoted in this SMH article discussing the interest rate cut and the risks in investor driven boosts to the property market. Soos got the final word on this one.

The economy needed stimulation but lowering interest rates was likely to add fuel to the housing boom, Mr Soos said.

“Australia has the world’s fourth-most-indebted household sector. The only country where leveraging is higher than Australia is Switzerland and they’ve got a cash rate of negative 75 basis points.”

New Look Earthsharing

The Earthsharing website has a brand new look and layout. Earthsharing Australia is our sister organisation and is the Renegade Economists primary home. Earthsharing has a strong focus on housing affordability, land use, public transport and environmental sustainability.

There’s plenty of information and angles at Earthsharing you won’t have seen on the Prosper site so go check it out.

If you missed the last couple of radio shows make sure you catch up via podcast. Last week Frank de Jong was on the line to discuss the implications of confusing land and capital amidst the economic pressures of an ageing workforce. That crucial distinction was also at the forefront of the discussion we had with NY academic Yannis Tziligakis – as he delivered a scathing inside analysis of the newly elected Syriza party in Greece and the economist MPs behind it and their inability to differentiate land and capital.

Safe As Houses

There’s a good read over at The Economist examining some of the economic consequences of the banks shifting from business to personal lending:

Since the 1970s virtually the entire increase in the ratio of private-sector debt to GDP around the world has been caused by rising levels of mortgage lending.

The same authors also find that the growth of mortgage lending has led to property bubbles and financial instability. Their data suggest that rising levels of mortgage debt are a better predictor of financial crises than surges in other forms of lending.

Synopsis: Mortgages were 30% of all loans in 1900, now 60%. Mortgages were half as risky as corporate loans in the 80’s, but that’s now reversed.

On the subject of private debt check out this short video at The Guardian, in which economist Ross Ashcroft outlines how private debt is steering us towards economic meltdown.

At Forbes Jesse Colombo writes of 5 common misconceptions about economic bubbles (and the people who warn about them) and warns of the potential for a global, system-wide bubble!

Clyde Cameron Lecture 

The 4th Clyde Cameron Memorial Lecture

Wednesday February 18th, 6-8pm

University of Newcastle City Campus, Level 4 University House, Room UNH421

Corner of King & Auckland Streets, Newcastle NSW

Free, RSVP to goodgov@bigpond.net.au

Keynote Speaker: Professor Bill Mitchell’s on “The Myths about Government Spending and Taxation”. Bill Mitchell is a Professor of Economics at the University of Newcastle and one of Australia’s most prominent heterodox economists, particularly on monetary reform.

Mr. Clyde Cameron AO was the member for Hindmarsh in South Australia and a vocal supporter of land tax.

Rounding Off

If you’re following stories about the sharing economy there’s a good one here discussing the element of trust involved in how it all functions, and Melbournians interested in the collaborative economy can check out this event with Rachel Botsman, an expert in sharing technologies at the SLF.

Thanks again for your support. Don’t forget to follow us on Twitter @earthsharing & @dontbuynow for all the latest news and commentary, and there’s always plenty of lively discussion on Faceboook.

Thanks,

Jess Wright

Office Manager