Budget deadweight, Prosper happenings

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The enews of Prosper & Earthsharing Australia
MAY 2015

Gratis
Tech Crash 101 Our deepest apologies for Wednesday’s technology fluff up. Some people received 1, 3 or 5 ‘placeholder’ emails. Whoops! We have just installed a higher security SSL certificate to the website (making it a ‘https’ website – notice the lock in the URL bar) to enable safer online transactions. It turns out it didn’t like talking to our open source CiviCRM email / database software. We think we have fixed it! Apologies for the imposition on your inbox, we are very embarrassed as we sidle up to push the launch of  …..

42andpointless

Prosper Australia Research Institute Launch

Thursday, May 21, 6.30 – 8pm

LSX, 285 Lennox Street, Richmond

RSVP

The launch of the Prosper Australia Research Institute (PARI) is drawing closer! Science can elaborately finance research into the God Particle, we can boast about new advances in Quantum Computing, but when it comes to shining a bright light on the economic advantages handed to those with legal privilege over the earth and its natural monopolies, the money is scarce.

The launch of PARI as a tax deductible gift recipient is a major step towards seeing the necessary research come to life. Tax deductible donations will give us the additional funding needed to compete with the aggressive rent seeking we see undermining our freedoms every day.

The night will provide a window into Prosper’s operational agenda. Prosper Australia President Andy Moore will explain how PARI fits into the Prosper machine and outline strategic plans. PARI Executive Director Karl Fitzgerald will then explain planned fundraising strategies, how current fundraising has already enabled research to be undertaken and outline intentions for the future.

It’s our first event at the Lennox Street Exchange (LSX) and we are looking forward to warmly welcoming members and supporters into our new home. The event is free – please RSVP to assist us with catering drinks and nibbles. Enter via the red door on Gipps St.

Join us to strategise a way forward in our continual evolution!

Takver
Budget 2015The Federal Budget – how can we put a positive spin on it? The conservative push for a ‘credible return to surplus’ is nothing more than a surplus for rent seekers. With optimistic forecasts for India to take over from China and the highly indebted household sector expected to ‘have a go’, the projected growth expectations are questionable. Riding on wage-earners bracket creep to fund the minor cuts to small business, business confidence must remain uncertain. Will $20,000 write-offs for small business lead to a greater current account defifict via the electronic gadgets likely to be purchased on a jawboned exchange rate? Thats what Karl Fitzgerald discussed with Policy Director David Collyer and UTS senior lecturer Dr David Bond in their Budget 2015 podcast.  Play it from your computer now.To think the Abbott government spend will increase to its highest level since 1986-87, at some 26.7% of GDP! Talk about deadweight costs.

Further, will the $3.3bn in small business tax cuts be eaten up by the $8.7bn in higher commercial land values (2013-14)? Higher land prices infers higher commercial rents. Do higher rents have a greater influence on small business formation than a lower aussie dollar? That’s the sort of research we would love to be engaging in via PARI.

 

vassilis
Senate Housing Report Release

The long awaited Senate Housing Affordability Report was released late last week with some encouraging recommendations including:

The committee recommends that state and territory governments phase out conveyancing stamp duties, and that as per the recommendations of the Henry Review, this be achieved through a transition to more efficient taxes, potentially including land taxation levied on a broader base than is currently the case.

The report makes numerous references to Prosper’s submission and the appearance of David Collyer and Phil Soos before the committee, along with quotes by other advocates for housing reform such as Cameron Murray, Prof. Frank Stilwell and the Tenants Union of NSW – it’s worth a look and can be read here.

With headlines like this, and the government already on the front foot rejecting the committee’s findings, it will be interesting to see what kind of pressure the report can add to the growing call for serious housing reform. We were happy to see LVT, value capture and Community Land Trusts all mentioned.

The Tax White Paper is available for download and the submission period is still open. With Prosper and friends well referenced in the housing report, we hope this will inspire our members to make a submission to the white paper. There were 13 land tax and housing affordability based submissions to the Henry Review. Can we do more to keep the Libs aware of the need to recoup economic rents in the public interest?

janneke staaks
Save Our Stats!

Prosper reported back in February that the Abbott government was considering scrapping the national census survey in a bid to save money. As staunch proponents of the notion that good information is essential to good decision making, we were relieved to hear the census is safe for now.

The government has agreed to spend $250 million on the 2016 census and to replace computer systems at the ABS. This was reflected in the budget, with the $250m spread over the next 2 years.

David Collyer writes more at Prosper:

The census is a critically important national statistical tool. It measures population and housing – essential for evidence-based policy, government and private sector demand projection and efficient provision of community services. Lots of nifty insights can be derived by sifting the data this way and that. It anchors all statistical sampling, like opinion polls and surveys.

Keoni Cabral
Aussie Investors Still Winning

Karl Fitzgerald reported at Prosper that the Andrews government will tax foreign investment in Victorian Real Estate – including a 3% Stamp Duty surcharge and a 0.5% Land Tax premium for absentee owners. While it’s a welcome step towards addressing the capital gains enjoyed by foreign investors, realistically the move will likely only benefit Australian investors who will be advantaged by less competition in the property market!

If Andrews was serious he would have reversed the tax imposition with a minor Stamp Duty increase and a major Land Tax increase. This would put pressure on foreign investments to be leased out or on-sold quickly, adding to supply. A higher Stamp Duty does the opposite by slowing turnover. Buyers will hold a property until the $18,000 in stamp duty plus their desired capital gain is achieved. Charging $1750 in Land Tax will do little to alter investment behaviour at just 10% of possible rental income. With capital gains running at $40,000 – $60,000 per annum, a $1750 charge is minimal. We will be very interested to see if the new change affects auction clearance rates and off-the-plan sales.

Zest-pk
Rounding OffWe’ll be keeping an eye on budget developments in coming days and continue to read the 400+ pages of the Senate Housing inquiry report. The Victorian budget dropped last week and the Renegade Economists caught up with the Planning Institute’s Stuart Menzies for a a budget chat from a planning point of view.We’ve previously discussed the gentrification pressures tech workers are bringing to San Francisco – this short video puts a personal spin on the story. There’s a really interesting article here about new high rise buildings, and the politics of shadows in the commons in NYC:

The developers behind them merged multiple building lots or purchased the “air rights” above adjacent properties to legally build taller than what would historically be allowed.

As a result, multimillion-dollar apartments in the sky will darken parts of the park a mile away. Enjoyment of the park while actually in the park — a notably free activity in a high-cost city — will be dimmed a little to give millionaires and billionaires views of it from above.

And this interview with Jim’s Mowing founder Jim Penman turned up a surprising advocate for land value taxation.

Don’t forget to join us on Facebook (dontbuynow, earthsharing) & Twitter (dontbuynow, earthsharing).

Thanks for your support,

Jess Wright

Office Manager

 

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