The good ol’ boys clean up


Fairfax’s Michael Pascoe writes today about Murray & Frijters’ study Clean Money in a Dirty System: Relationship Networks and Land Rezoning in Queensland which found politically connected developers gained $410 million through favourable rezoning decisions in Brisbane in the years 2007-2012.

Cameron Murray and Paul Fijters of University of Queensland comprehensively scoured records and assembled who owned what, lobbyists paid, networks exercised and political donations made.

Or, as they put it:

Using micro-level relationship data from multiple sources, we compare the relationship-network characteristics of landowners of comparable sites inside and outside the ULDA areas, finding that ‘connected’ landowners owned 75% of land inside the rezoned areas, and only 12% outside, capturing $410 million in land value gains out of the total $710 million from rezoning.

You could have heard Cameron build this picture at a Prosper-sponsored seminar in Melbourne back in June.

One fascinating insight from Cameron was that political donations are overwhelmingly ‘signalling’ by outsiders who want to join the picnic. Established developers have no need for such nonsense. The big licks of (visible) money paid go to incentivizing political lobbyists to secure a particular outcome.

Michael Pascoe rightly observes this paper:

“…should have brought down state and local governments, sparked a royal commission and radically changed the Australian housing industry. Five months later, the paper seems to be forgotten and Australia’s biggest racket rolls on unchallenged: gaming land rezoning for enormous windfall profits.

The unceasing narrative proclaimed before the innocent is that high and rising land prices are evidence of economic health.

The bleak reality is, entire future working lives are capitalized into today with mortgages and captured by a small band of developers. Life-long debt-servitude and diligent employee behavior is the lot of anyone presuming to fulfil The Great Australian Dream and buying their family a home.

And people wonder why we want to tax the land while untaxing labour and business.


  1. THEO04-10-2015

    So in other words, this article confirms the general public are sheep and that the political world accordingly and deservingly treat them as such? I rest my case.

  2. THEO07-10-2015

    How about we all help with the acquisition of a radio broadcasting licence? The office is already there. Donations are tax deductible. Advertising can help with ongoing costs. ‘Prosper’ can make a much more powerful case against these vested interests. Feasibility study into this idea would be great.

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