Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Housing industry ploy

By Karl Fitzgerald - posted Wednesday, 18 April 2012


To finish off we note from p74:

a $500 million reduction in most state, property specific taxes such as stamp duties, land tax and rates on dwellings, and replacement with a $500 million GST on food would increase national welfare (national consumption) by over $350 million due to reductions in distortions across the economy, but it would also increase the supply of housing considerably more, by over $400 million...

We ask:

Advertisement
  • Whose consumption would increase by $350 million? The poor who face less discretionary income due to higher regressive GST charges or investors benefiting from lightly taxed capital gains enjoyed by the tax trickery of Self Managed Super Funds (where property investment is exempt from capital gains tax)?
  • Small business who would no doubt face even higher rents when holding charges are removed?
  • Why would there be less distortions in the economy? Simple and easy to administer taxes in the property sector would be shifted onto the retail sector where the administrative burden would increase.
  • We are asked to accept that this will increase the supply of housing by $400 million. This implies that the retail sector should be slugged with this burden so we can build a whopping extra 800 homes (valued at $500,000 each).

Without some form of holding cost, there would be little encouragement for developers and speculators to put housing on the market to meet the prevailing market conditions. Those in control of our crucial housing supply have the upper hand. They can simply hold the market to ransom.

Should an anonymous think tank be widely quoted that it is more efficient to allow one sector of the economy to enforce higher rents in the retail, commercial and household sectors as if this is solid economic theory? The property industry can act in this manner because they have an un-natural advantage over the productive economy. Their responsibility to shareholders demands that they engage in drip-feeding the market to maintain high prices, a practice that is ignored by the CIE report.

Lastly, the importance of Land Taxes is paramount when considering the consolidation of the Australian housing industry. Holding charges are vital to counter-balance the market power of the property industry.

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. Page 4
  6. All

This article was first published on Prosper Australia on 16 April, 2012.



Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

3 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Karl Fitzgerald is the Projects Coordinator for Earthsharing Australia.

Other articles by this Author

All articles by Karl Fitzgerald

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 3 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy