134th Henry George Commemorative Dinner Address by John Alexander OAM, Kelvin Club, Melbourne, 4th September 2025.
Joe Langley, Prosper Australia Secretary and MC:
It’s my pleasure to introduce John Alexander to you tonight.
John was a member of the House of Representatives from 2010 to 2022, during which time he led a number of key parliamentary committees. He was chair of the parliamentary committee on infrastructure, transport, and cities, which is where I got to know him. He was chair of the committee on economics, the committee on tax and revenue, and the coalition policy committee on infrastructure and regional development. He led the Liberal Party’s Sustainable Cities Policy Task Force and the Parliamentary Friends of Rail Group, which invites members of the industry to provide presentations and information to the members of the parliament.
He was also a huge supporter of mine and a founding director of the Australian High Speed Rail Association, and we’ve got some members at the back here. He’s been fantastic in opening doors and helping us. But the thing that he has done is create a body of work in parliament that is pretty well hidden, but is incredibly important to Australia’s future long-term development if it’s ever taken up. He’s a strong supporter of federal and state government policies that implement value capture funding on transport projects and promote regional development and are designed to improve social and affordable housing supply.
I think I don’t have to tell people in a bar or a club like this in Melbourne that he played a bit of tennis in his youth. He was a professional tennis player, as I’m sure you all know, but that went from the 1960s into the mid-1980s. During which time, he led the Australian team to the Davis Cup victory in Sydney. On a personal note, the journey, I think, that John and I have taken started about the same time in Atlanta, Georgia, when we were 17, 18 years of age. And he moved to Atlanta from Australia to play tennis and become a tennis pro and become a superstar. And I moved from Southeast Asia to Atlanta when my father got out of the military. And I did none of the things that he did.
But we both saw in Atlanta the city grow during a period of about 20 years, from a million people to 6 million people today. From 1980 to about 1990, the growth rate in the Sydney metropolitan area was 5% per year. It was incredible growth. And during that period of time, there was a huge investment in infrastructure.
Mainly, unfortunately, roads, but also all sorts of other infrastructure. They actually did build a metro line, created the largest and busiest airport in the world. And I think in the talks that John and I have had over the years, Atlanta sort of lit a bit of a light in our brains that we came back together again in about 2014, I think it was, John, when I was sitting at my desk at ACOM, and the phone rang, and it was John. But I didn’t know who he was at the time. And he started asking me about value capture and what I was doing in that particular field. And I got to know him pretty well. And he said, “Would you come down to Canberra and talk about your experiences there?”
It was a night that Tony Abbott almost lost his seat. But that particular night was when he was being presented with some of the work that John had done on value capture. And all that work was about funding infrastructure and going to public transport, and supporting affordable housing. And Tony got up and he said, “I’m so pleased to see that John has found another way for us to fund roads.”
So the work continues.
But now I’d like to invite John Alexander to come up and share with us all the tremendous work he’s done at the federal level for affordable housing, transport, and other social programs. John Alexander. (Applause)
Regional Development, high-speed rail, and value capture: a bipartisan approach
John Alexander OAM
Thank you, Joe. That was a long introduction.
I often tell a story about when I was asked to introduce Julie Bishop one night in Canberra during a major event. And I started telling a story about playing tennis at the Alan King Classic in Las Vegas, which was a very desirable tournament to play. You got to go to all the shows. And I reflected that as you went to the lesser lights, the introductions were magnificent. But when we went to see Frank Sinatra, there was no introduction at all. He just walked onto the stage. So I was telling the stage, and then I said, “Please welcome,” and Julie walked on. And I thought I was sort of cute.
But thank you, and thank you for inviting me. I hope you won’t be disappointed. But at least what I want is to engage and continue a conversation, and maybe stimulate that a little bit more and challenge.
I’ve got to say, it’s been such a joy to sit with Tim Costello. I’m a bit of a fan of yours, but I contain my fandom for the moment. And it’s great talking with you tonight.
And the other person who impressed so much was Anne-Marie Hermans. What a treasure you are. What an asset you are to the Victorian Parliament. So good luck with you and your future career. You’ll do great things, I’m sure.
But tonight, I’m going to try to connect the various inquiries that I was involved in, from sustainable cities, to home ownership, to the planning of settlement, to the funding of infrastructure and the role that infrastructure must play in facilitating settlement to address some of our big problems, which is the over-congestion of our major cities.
In extraordinary fact, we have incredible amounts of immigration at the moment, and when I did my inquiry on this subject, I think it was 85% of immigrants went into Sydney and Melbourne, compounding the problem of overpriced and overcrowded cities. So I’ve got some written notes, which I’ll stick to for a while. I will drift off. Joe, tell me if I’ve drifted off too far, and then we’ll open up to discussion at the end. So I gave a name to my speech tonight, which is dangerous.
And it’s: From Commonwealth to Kingdom to Revolution.
The growing division of wealth
I did an interview recently, and I was talking about Commonwealth, and I’m trying to explain to my interviewer that Commonwealth actually means Common Wealth, that wealth was common. And certainly, when I was growing up in the ’50s and the ’60s, wealth was common. But it’s becoming less. We’ve got the lowest rate of home ownership in 60 years, and what used to be the barometer of our wealth was the rate of home ownership. From the end of the Second World War until sometime in the 70s, we went from under 40% over 70% of home ownership, and that was the barometer of how well our country was doing. Tim, you’re almost my age, aren’t you? I’m just tall for my age, I’m not that old.
The other criteria were the minimum wage and the cost of a beer were the three big things.
Anyway, the way I see it is that the greatest domestic threat to our Commonwealth is the growing division of wealth. And I intend to be provocative by claiming that we are on a trajectory from Commonwealth, literally Common Wealth, to a Kingdom state and then on to Revolution.
Tonight I want to raise an awareness of the deep consequences of negative gearing and the all-pervasive role it plays in the concentration of wealth and the issue of value capture, or what we have at the moment: value escape.
In Parliament, we backbenchers were often given a bit of time. We were permitted to speak freely on a topic of our choice. It’s called an adjournment debate, which is late on a Thursday night at the end of a sitting week, when hopefully our superiors would think nobody would be listening.
But I’ll just read a little bit of one of my adjournment debates that I’ve kept. And it was Kingdom to Commonwealth, but it went like this. It was meant to be a little bit funny, so laugh. If you don’t laugh, it’s a poor reflection on your IQ. I tried that one once in Brisbane, and half the crowd laughed and half didn’t.
Anyway, since 1707, the Kingdom of Britain has transitioned to the British Commonwealth, where even the commoner can own land, once the province only of lords. The British lords accumulated enormous wealth on the toil of their serf tenants. It was even better to be king. The British Empire grew to the far reaches of the planet, and colonial rule reigned supreme. Far from the land of kings, queens and lords, Australia, the lucky country, boomed under the banner of Commonwealth of Australia.
And we lived the dream that allowed home ownership to a higher percentage of our population than any other country. A man’s home was his castle, a real opportunity for every Australian family.
Something has changed now.
The empowerment of many has been taken by new lords who share many benefits of the lords of old England. These lords are known as landlords, and somehow, consecutive governments have empowered these lords to rule the working class, taking from them any chance of home ownership and enslaving them to affect the enrichment of their lords, their landlords.
This is not a joke, and it’s not funny.
The current tax laws allow the investor, the landlord, to borrow 100% of the purchase price and deduct the cost not only against the income of the property but also against their other income. That’s negative gearing. The investor is also allowed to deduct all other costs of the property from council rates to power, electricity, water, and even having the dog walked or the lawn mowed. On the other hand, the owner-occupier must pay their mortgage with after-tax dollars and has no deductions.
How does this play out with interest rates at a historic low and rents high?
I attended a number of auctions with children and friends who had children who were looking. And at one event, the daughter of my partner lost out in a very closely contested auction. And the man who won the auction turned to me and said, “Your daughter seems to like this property, do you think she’d be interested in renting it?” I was begging him to ask her because she would have smashed him. And he deserved to be. The attitude was unbelievable.
That’s what happens time and again. And it is the renter that is imprisoned like a serf, ever devoted to the gaining of greater wealth for the landlord. In talking just briefly about the last federal election, many would agree that what disappointed most about the last federal election was a lack of vision. Did we hear any great ideas, any vision?
For a young, vibrant, rich in so many ways country, where were our leaders tapping into our collective imagination to divine a vision for our future? A contest of ideas and vision to fulfil our potential, it was not.
What are the consequences if we continue on the path we’re on? Our major cities are over-congested, overpriced and undersupplied with housing, and with immigration at record levels.
A recipe to increase these existing challenges.
All while our regions are left behind. Our political culture has failed us.
High-speed rail in Australia
High-speed rail has been debated for over 40 years, and Australia has spent more on enquiries into high-speed rail than any other country.
Over 140 million of your dollars.
Laugh not. I’ve contributed to that. I’m so sorry. I did three enquiries into this subject.
Harnessing value and delivering infrastructure, Building up and moving out, which was the building up, densifying around infrastructure hubs in our major cities. But more importantly, strategic decentralisation: moving out. And the final one on the subject was Fairer funding and financing of faster rail. And I’ll talk about each of those.
In short, Harnessing value and delivering infrastructure explored the opportunity of value capture, funding of high-speed rail, and the term value escape came into being because we were not value capturing. Our recommendations were simple: when infrastructure and zoning create windfall uplift in property values that the unearned beneficiary should contribute proportionately.
Building up and moving out went further to explore concerns that saw 85% of immigrants settling into either Sydney or Melbourne, adding fuel to the fire that was already very hard to control. The retrofitting of infrastructure into these cities is very expensive and rarely meets the current needs, let alone future needs.
What was represented as planning was, in fact, a reaction to a problem that had developed because of a lack of planning.
Therefore, our needs were clearly defined. We needed to be proactive, not reactive. And this thinking came from a presentation of a town planner at Epping, which was in the heart of my electorate, a guy called Steve McMahon. He was a great presenter, and I was really caught up, and he was talking about the plans of Epping. And I went up to him after I thought he had a sense of humour, and I said, “That’s not a plan, Steve”. He says, “Oh no, that’s the plan”. I said, “No, it’s not a plan. What you’ve presented is a solution to a problem that has developed because there has been no planning”. And he gave me his card, and he said, “Please call me”. And he started my education in that area. And thank you, Steve. He was fantastic. But he agreed with me, which is a dangerous thing.
And that was the foundation of that thinking that we’ve never planned our settlement.
How can you have a country and not think to plan settlements? So without a plan, we’ve had this concentration of population into these major cities, and our regions have died.
A summation of this inquiry recommended that there should be a master planner of settlement, a master plan for infrastructure to support the plan of settlement and a master funding mechanism through value capture.
Funding high-speed rail
The Fairer funding and financing of faster rail inquiry was called out of concerns of what was in train if the development of Badger was in train at the Western Sydney Airport, where the landholders and speculators were making out like bandits, funded by the taxpayer investment into that infrastructure that elevated unearned beneficiaries to unprecedented levels.
And the uplift of the value of that land was extraordinary. And if high-speed rail ever proceeded, this gross inequity would be repeated time and again.
It’s important to understand the challenges we face in Australia that have resulted in a failure to plan and develop policies at all levels of government for way too long. In the absence of a plan of settlement, an imbalance has evolved that sees our major cities overcrowded, overpriced and over-congested, while our regions have been in decline.
We have a housing shortage, and we have record levels of immigration. Housing affordability in Sydney is the second-highest in the world, only to Hong Kong. Compounding the concentration of wealth that negative gearing provides for landlords, their close cousins, the speculator and landowners, are participating in what many would claim to be an even greater concentration of wealth funded by the taxpayer.
Wealth is being concentrated and is no longer common.
In the parliamentary inquiry into fairer funding and financing of faster rail, evidence identified another inequity whereby in the absence of a value capture mechanism being applied in the surrounding areas of the development of the Western Sydney Airport, the most obscene transference of wealth from taxpayers to land owners and speculators occurred in Australia’s history.
In short, the taxpayer funded the infrastructure of the airport, the rail lines, the roads and the services and coupled with rezoning, increased land values most extraordinarily.
One notable speculator who’s doing time for the murder of a business partner bought some land for three million and sold it for 500 million. Ron Medich.
Other lands that were previously dairy farmland and valued at about $2,000 an acre, when you put a metro station on that land and zone around it for high-density 20-storey buildings, what do you think that acre is then worth?
I can tell you it’s upward of $10 million. That’s an increase of 5000 times. No one ever gets that question right, by the way. And very few people know what value capture is.
But the concerns are that if we go ahead and build high-speed rail, that scenario will play out time and again. The claim that the government was investing taxpayers’ money was disingenuous, as the benefit did not find its way back to the taxpayer in any way, but went directly to the landowners and the speculators gambling on their knowledge, often inside knowledge.
Why this inquiry was called was out of fear that if we ever went forward with high-speed rail, this scenario would be repeated time and again with even greater wealth for the few funded by the many. This pattern of inequity driven by policy gaps has not only repeatedly deepened the divide between urban and regional Australia, but has also created a vicious cycle of opportunity and disadvantage. The concentration of resources, jobs, and infrastructure in metropolitan areas acts as a magnet, pulling more people in and further overwhelming an already strained system. Meanwhile, regional communities, once thriving centres of innovation industry, are left to contend with dwindling populations under investment and a sense of neglect.
National settlement planning
A strategic plan for national settlement is a fundamental foundation stone. In regard to funding infrastructure, we had evidence from Tim Williams from London’s Cross City Rail project, and he had often been lauded for raising some 30% of the cost of the Cross City Rail through a betterment tax.
He’s opening statement went something like, “I’m embarrassed at being lauded for the excess of this betterment levy that funded a third of the cost of the project, and that I really had stuffed up because if we’d shared in the resulting uplift of the property values, the entire cost of the project would have been met.” So he was a strong advocate for value capture. The notion that value capture could at best only fund a third of infrastructure cost was repeated because of this initial claim that a very successful levy had only paid for a third. That’s simply not correct.
We had extraordinary evidence from Professor Andrew McNaughton of the UK’s high-speed rail, too. He encapsulated his position by saying that the uplift of property values around metro stations was very significant in the immediate vicinity.
He went on to say that the uplift was much more dramatic and over a larger region around a regional station. Then concluded, however, that the most significant uplift occurs around a high-speed rail station over a greater area and a longer period of time. Value escape had become a common terminology to describe what had happened in Australia over the last hundred years, climaxing now at Badgerys Creek in the development of the Western Sydney Airport.
Our Building up and moving out inquiry made fundamental recommendations for the master planning of settlement, the master planning of infrastructure, and the master plan of funding through value capture.
Of the three parliamentary inquiries that I initiated and shared, there was never one dissenting report. That means there was unanimous bipartisan support for the findings and recommendations.
Important conclusions were reached in the understanding of the purpose of high-speed rail.
How it will contribute to addressing some of our most intractable challenges and, most importantly, how it should be funded. One of the early and somewhat surprising learnings was that high-speed rail’s main reason for being was not as an alternative to air travel between our major cities, Sydney and Melbourne, even though that is the second busiest air corridor in the world. But more importantly, to provide commutable times into our major cities from satellite cities, therefore creating world-competitive mega-regions.
This understanding led us on a path of other collateral benefits of dramatically increasing the affordable housing supply. This would no doubt benefit us all if our housing sector could be returned to one of shelter, not a speculative, volatile, get-rich sector for the investor.
A land of lords and serf tenants, a kingdom, not a commonwealth.
The future of national infrastructure planning
When Philip Lowe, the former Governor of the Reserve Bank, was asked what was needed to facilitate major infrastructure, his response was that if 40 years ago I had told you that my board and I would set the prime rate of interest at arm’s length from government, people would have laughed. But it’s worked very well. And he suggested that short of bipartisanship, this is what is required.
I would think that that is probably the case because we’ve recently seen one of the most embarrassing things in our recent history that the referendum to recognise how indigenous people as the first people of this land couldn’t get up. There is not a snowflake’s chance in hell that if you leave it in the government’s hands, high-speed rail will get up. They cannot agree on anything. The whole system of political debate is non-productive. And the first casualty in virtually any political debate or campaign is the facts.
I was fascinated recently, there were two smartest men in the world, the two men with the highest IQ, which I think come in fourth, fifth and sixth behind the smartest three women.
They both agreed. When asked what was their God? They said the truth and the facts.
And you reflect, then, well, what is our government culture like? Because it is so devoid of facts and the manipulation of facts, and devoid of the truth. So there’s a lot of work to be done there.
Unfortunately, the plan announced to commence this nation’s building of infrastructure, the high-speed rail, has gone diametrically opposed to all of the recommendations of the three inquiries that I chaired.
We finally have a high-speed rail authority, and they’re going to commence high-speed rail in Australia with a station at Central. It’s going to go to Gosford. And when it gets there, it’s about six levels down. And then to Broadmeadows in Newcastle.
The fundamental findings of our inquiries were that you had to identify greenfield sites where you could maximise the uplift of the value of properties to fund the cost of infrastructure. So we have this absurd situation where we’re going to go through the most challenging geography in Australia under the harbour from Central. What are the chances of getting some uplift at Central in property values? Give me a break. Hello.
And then under the Hawkesbury River, where it’s so deep, they’ve got $500 million to spend. They’ve been spending the money. And they’ve put these parlons down a couple of hundred metres, trying to find where they can finally get the tunnel to be dug under the Hawkesbury River. By the time it gets to Gosford, it’s about six or seven levels down. The cost of that station will be phenomenal.
Gosford is blocked by water on one side and hills on the other. There’s no room to create a million-person city. You go about 20 km north, and you’ve got an area where you could have an enormous city halfway between Sydney and Newcastle. And then Broadmeadow, I talked to the Mayor just a couple of weeks ago, oh, they’ve got 20,000 homes that can be built at Broadmeadow. 20,000 homes? Give me a break. There’s an area between Newcastle and Maitland where you can establish one million homes. Now we’re talking, but that’s not happening.
So it’s extraordinary that Anthony Albanese, who is a fan of high-speed rail, can put in place an authority and then ignore the three inquiries that members of his government participated in and did not object to a single issue. And yet ignore those part of the $140 million that we’ve spent was just wasted.
It is so frustrating to be in government. The first words that I was greeted with when I went into parliament were Tony Abbott talking about a meritocracy. And I said, Oh, yeah, I understand what a meritocracy is. I used to play prize money tennis. And if you win the match, you get the money. And if you don’t, you don’t. That’s a meritocracy. I thought it was very funny. Look, I was always struggling to find his humour.
The corridor between Sydney and Melbourne links two of the highest cost housing cities in the world, separated by several regional cities surrounded by greenfield sites, producing the most ideal precondition to maximise value capture funding. Australia recently suffered, as I was just talking about, an international embarrassment by failing a referendum to recognise our indigenous people as our first people.
Political warfare fails us time and time again. It’s an embarrassment.
For high-speed rail to become a reality, there must be either bipartisan support or take Philip Lowe’s advice and install an independent body similar in nature to the Reserve Bank to deliver major infrastructure.
Housing policy and wealth accumulation
So, what to do about housing? Don’t mention negative gearing, because that’s political suicide. Could you imagine during the whole last election, when housing is such an issue, negative gearing wasn’t mentioned by either party?
After my inquiry into home ownership and further discussions with Glenn Stevens, who was the Governor of the Reserve Bank, John Fraser, as the Secretary of the Treasury and Wayne Byers from APRA, we through our inquiries became quite good friends and had these strange alignments and enthusiasm for developing a suite of policies, which we went ahead and did. I’d just like to share some with you to commence that conversation.
And I’ll start off with a couple of comments that further clarified my thinking on housing and wealth distribution. One was by Hank Paulson, the American who was charged with addressing the global financial crisis under Barack Obama.
Another way I met Barack Obama, and I was introduced as a tennis player, he said tennis was his first love. And he said, “You know, I was ranked in Hawaii as a 12 and under, and then our family moved, and I had to give up tennis. I started playing basketball.” So I looked at him. I said, “So had I quit tennis at 12, I could have been the president of the United States.” He had his doubts about me for a while.
So there was a gathering 10 years after the global financial crisis and a reunion with the major players, Ben Bernanke, Timothy Geithner and others. In a tight little huddle of the inner circle, Hank confided in his belief that the genesis of the global financial crisis was that in the US, when the housing sector moved from one of shelter to an investment sector.
Should we be concerned at this time, our housing sector, as to how long our housing sector has been an investment sector and with the accompanying volatility, to the point that our housing sector, which is our biggest economic sector, is often referred to as a Ponzi scheme? And if you reflect on that, what a Ponzi scheme is, what the components of a Ponzi scheme are, the glove fits.
The other comment that I’ll raise is one that came from Gore Vidal during a fascinating series of debates with William F Buckley in the lead-up to the US elections in the 60s. Now, this probably predates nearly everybody in this room, but these were two social commentators. One was of the left, one was of the right, and they were both unbelievably obnoxious characters. William F Buckley probably gets the gold, and Gore Vidal, who is also a famous author, as decent a man as he was, was pretty arrogant, but they made for great entertainment. But at one point, Gore lamented the concentration of wealth in the US with the extraordinary claim that 25% of the US wealth was held by the wealthiest 5%. Just think about that. 25% of all the wealth was held by 5%. This is in 1962. And that the poorest 25% only held 5% of the nation’s wealth.
He was outraged, and to the best of my memory, William F did not oppose Gore’s outrage and claims of inequity. And you just have to wonder, what would they think now about their country? Where maybe less than 2% is claimed to hold the assets of more than 90% of that country. Remember, we now have the lowest rate of home ownership in this country for the last 60 years. Where are we going? What is our trajectory? Are we going from a commonwealth to a country dominated by landlords and real estate speculators, funded and fueled by tax systems and taxpayer-funded infrastructure that concentrates wealth further between those two groups of landlords and speculators?
The suite of policies we developed was categorised as counterbalancing and stabilising mechanisms. Like the creed of doctors, the first rule was to do no harm.
With the aim over time of moving incrementally, housing back to a sector of shelter where the prices would be determined by wage earners competing with wage earners.
The first target was addressing investor-driven inflation. And the recommendation was to install a lever to set the percentage of deductibility for investors entering the market.
Similar in concept to how the Reserve Bank controls inflation through the review and setting of the prime interest rates, on a monthly basis.
To assist the home buyer, a policy of accessing super was developed. And I guess that most, or a number of people in this room, would be immediately opposed to that notion.
Malcolm Turnbull shot down this idea by saying it was the stupidest idea he’d ever heard.
And I’d started meeting with him about these issues. And I said, “Look, I’ll raise this issue first, because if you still hold this opinion at the end of that, we can have a cup of tea and I’ll be gone. I’ll be out of your hair.”
And so I presented this policy. I made the point that the strongest statistical link to poverty in retirement is not owning your own home. Also considered and often referred to at that time in parliament as the elephant in the room was our future exposure to an increasingly aged population and their aged pension entitlements, with a reduced percentage of working people to fund such.
There’s an enormous issue of endless discussion telling us what the problem was, but not coming up with the answer. The policy that I put forward varied in that the money was not taken out of super, but transferred into the home purchase through a super mortgage. Where the principal component of the mortgage could be funded or partly funded from superannuation. The house would then be categorised as a super asset and therefore accessible in regard to the aged pension eligibility. So you’re killing two birds with one stone.
The question of the house not being a liquid asset was then raised by Malcolm. I think I’ve got you on this one, though. He’d accepted the argument at this point. But the invention of a product called the super line of credit. Whereby agreed amounts could be withdrawn in retirement from the equity in the home.
Maybe it’s a good time to enter discussion and questions, and comments on what I presented. And I’m very happy to be challenged. I’m very happy to be told that my ideas are no good. But I will suggest this. And if you’re going to do that, you need to come up with a better idea. Criticism alone has no place in an arena of contest of ideas.
So I thank you very much for listening to me. These are my favourite topics to discuss. I bored the hell out of Joe on the way down yesterday. I had him as a captive audience. We discussed these things long and hard. So I look forward to questions.
Thank you.
The presentation of the E.J. Craigie Writing Award and questions from the audience are available in the video recording.
Prosper Australia thanks the Henry George Foundation of Australia for their support for the 2025 Henry George Commemorative Address.
