Boomer Welfare Enjoys Foreign Investment Fillip!

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The Climate Fund Under Our Feet – this Thursday!

Thursday February 26th, 6.30pm
Level 2, 22 Punch Lane, Melbourne
Presenter: Karl Fitzgerald
RSVP

As resource scarcity is compounded by rising housing debts and a democratic system auctioned off to the highest bidder, a new perspective is needed to bind seemingly disparate challenges into a unified system of analysis.

For genuine sustainability to be attained, 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 until March 1st.

Boomer Welfare – and the Path to Reform

The reluctance of politicians to even mention the family home in tax reform discussions means baby boomers are getting richer and richer, while Gen X and Y drift further behind. Karl Fitzgerald analyses the “sacred cow” in this snappy analysis of boomer welfare.

The bigger question is how we get beyond superannuation handouts and onto the big inter-generational issue – home ownership. Some 30 years of State and Federal tax inquiries have largely been supportive of our stated desire to replace taxes on the productive sector with those on economic rents ie land and mining. However, well meaning tax inquiries fall over due to vested interests polluting the public interest.

Boomer property investments are enjoying a further fillip by the foreign investors currently surging into Australian real estate. Our foreign investment future is discussed at Prosper.

For Australia, the much vaunted housing supply mantra is being undermined by foreign investment in new homes. New re-zonings are being snapped up off the plan as a safehaven to park money. The mobility of capital is set to increase alongside technology, ensuring the commodification of housing escalates as the global housing marketplace matures. Housing supply alone cannot keep up with international demand for a commodity returning (barely taxed) huge capital gains.

Danist Soh

Collyer on Tax Reform Derailed

Policy Director David Collyer writes:

Late last year, the Abbott government called for submissions on its tax reform white paper. Prosper was happy to help and offered ideas.

Since the call, the popularity of the government has plummetted and Tony Abbott’s leadership is shrouded in doubt. There is no confidence the government could carry the electorate with it in any direction. Difficult tax reform would likely arouse a storm of derision rather than a reasoned debate.

On Friday, Treasurer Joe Hockey told the AFR the tax white paper would be deferred until after the intergenerational report – taking it and its controversies off the table in the hope L/NP fortunes can recover.

Read Prosper’s Federal pre-budget submission.

Brett Davies

Census Survey – Essential for Democracy

The news arrived last week that in a bid to save money the Abbott government is considering axing the national census survey. This is however upon recommendation from the ABS itself, perhaps influenced by the Abbott appointed leader David Kalisch. Good information is key to good decision making and we agree with Matt Wade that the census is fundamental to our democracy.

The neo-conservative agenda has open data in its sights. The push to privatise land titles offices in the UK, NSW and Victoria must be monitored. This is an attempt to smother analysis of the inequality stretching our freedoms. There are some rumours the census is to be replaced by a $500m data retention centre.

We discussed the importance of regular census data on the Renegade Economists when Dr. Jack Barton and Dr. Bob Stimpson joined Karl Fitzgerald for an invigorating discussion on why data is an essential element of moving towards an economic democracy.

While we’re talking data – the Liberal-National Coalition has made data an election issue by pledging to make real estate sales data available free by October if it is re-elected. If only that went national!

Joey

Debt, Orbits and Sharing the Scraps

Prosper researcher Phil Soos is quoted in this piece about debt and the fact that Australian households are up to their eyeballs in it:

Of that total, $1.4 trillion of our private debt is in mortgages over housing. And the big four banks hold 80 per cent of Australian mortgages, leaving them insanely exposed to a market that, in Sydney and Melbourne at least, is almost at boiling point.

Economic rent is not just a terrestrial game – private companies are patenting the commons in outer space too.

Robert Reich calls the sharing economy the ‘sharing the scraps’ economy in this pointed piece.

And there’s an interesting read at Quartz magazine about market bubbles. 33 of the 36 bubbles being tracked by Investment Fund GMO have popped.

William Warby

Rounding Off

Spring cleaning our bookshop has unearthed a surplus of some great books which we want to offer to our Evolving Economics readers. For a list of all the titles which are free to a good home (+ postage) please contact the office. It’s a great list and includes books by Henry George, and DVD copies of our must-see documentary Real Estate 4 Ransom! Email office@prosper.org.au

Thanks for all the positive feedback we have been receiving about the Enews – keep it coming!

We have something exciting to announce in our next edition – until then catch up with us on Twitter (@earthsharing & @dontbuynow) and Facebook (dontbuynow & earthsharing) and don’t forget to tune in to the latest Renegade Economists podcasts.

See you Thursday night,
Jess Wright