staringclown

How taxing housing diminishes affordability

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How taxing housing diminishes affordability

An interesting read. This guy argues not only that CGT exemptions and NG should remain but that other property taxes should be replaced to encourage building more houses and thus solve housing affordability.

Substantial gains in the efficiency of the tax system and housing affordability could be achieved through the substitution of more efficient taxes such as the goods and services tax for inefficient taxes on residential property. CIE estimate that replacing taxes on housing with a broadening of the GST base could increase GDP by around 2% and increase residential construction by 14%, providing a much needed boost to housing supply.

The main obstacle to a reform of this type is the dependence of state and local governments on residential property taxes, accounting for around 40% of their total revenues. This points to the need for a federal-state compact on tax reform that finances the abolition of inefficient taxes on residential property through changes in the GST rate or base. State and federal governments unwilling to consider such a compact are not serious about addressing housing affordability.

The solution to Australia’s housing affordability problem is to build more and cheaper houses. This can only be achieved by easing the tax burden on housing and not through the abolition of existing tax concessions.

At what rate would the GST need to be set to recoup the loss of property tax revenue I wonder?

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At what rate would the GST need to be set to recoup the loss of property tax revenue I wonder?

2 years ago revenue or this years?

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2 years ago revenue or this years?

I had to check. GST 26%. Property taxes as measured by the ABS don't seem much by percentage of the total @ < 10%

Every level of government get a cut though. A 15% GST on the back of a beer coaster (20% max) would probably cover the loss.

TaxTotal.jpg

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Some interesting comments after the article ... I'm not seeing much love for author's theory.

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Some interesting comments after the article ... I'm not seeing much love for author's theory.

I'd be happier if the article suggested dumping the tax concessions as well as the taxes/levies/stamp duty/rates and replaced them all with a land tax which would get rid the duplication of functions across the levels of government.

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I'd be happier if the article suggested dumping the tax concessions as well as the taxes/levies/stamp duty/rates and replaced them all with a land tax which would get rid the duplication of functions across the levels of government.

If you want to remove duplicity, then why not go all the way and dump state governments altogether. All that money saved in the public service would allow for a surplus much more easily.

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If you want to remove duplicity, then why not go all the way and dump state governments altogether. All that money saved in the public service would allow for a surplus much more easily.

I couldn't agree more C but the constitution makes it very difficult to change.

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If you want to remove duplicity, then why not go all the way and dump state governments altogether. All that money saved in the public service would allow for a surplus much more easily.

+1

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I couldn't agree more C but the constitution makes it very difficult to change.

It would take a referendum, which would most likely loose as all state governments irrespective of their political bias would campaign against it purely to save their bacon!

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It would take a referendum, which would most likely loose as all state governments irrespective of their political bias would campaign against it purely to save their bacon!

What is often forgotten is that the states are federated... in some ways similiar to countries in Europe federated under the EU.

It would actually be better IMO to reduce the centralisation of power in Canberra, makes the states adhere to the Constitution (which they aren't doing now), and respect and enforce the 1988 referendum result (establishment and continuance of local government was rejected).

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It would actually be better IMO to reduce the centralisation of power in Canberra, makes the states adhere to the Constitution

Does the constitution enforce states to have common standards/laws such that businesses don't have to worry about different laws for each state, disallow different rail gauges such that a single train could not travel from one state to another, require a common school curriculum making easier for tertiary institutions to compare the performance of students from different states, plus a few other things? If so, then the States have been breaching the Constitution since Federation. If not, then they should piss off states altogether! Why have multiple Health, Education and other departments when a single version will do for a population of around 20 million. The savings in back office operations alone would be massive. Then there is a savings to private enterprise in only having to deal with only a single layer of government across all states.

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actually you could contract the admin out and let the state gov bid for the contracts along with private companies. o wait this is health we're talking about. ok maybe moter vehicles you could run nationally, and let state gov departments bid for the contract.

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Abolish the states!!! UK and NZ seem to do OK without the duplication. I need two incompetent health and housing ministers like I need another hole in the head.

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It would take a referendum, which would most likely loose as all state governments irrespective of their political bias would campaign against it purely to save their bacon!

That's it. As soon as it is mentioned states claim to act as a counterbalance to federal power and it's all over. I don't think there has ever been a successful politically contested referendum. 2/3 majority and majority of states is hard to achieve without bipartisan support.

Australian referendums wiki

In order to pass a referendum, the bill must ordinarily achieve a double majority: a majority of those voting throughout the country, as well as separate majorities in each of a majority of states (4 of 6). In certain circumstances, where any state or states are affected by a referendum then a majority of voters in those states must also agree to the change. This is often referred to as the "triple majority" rule. Prior to the 1977 referendum, residents within the Northern Territory (NT) and the Australian Capital Territory (ACT) did not vote at referendums.

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I don't think there has ever been a successful politically contested referendum.

IIRC only 6 of 46 federal referendum questions have carried. Fortunately Aussies see through the BS and tell the pollies to get stuffed most of the time.

In Victoria there has only been one referendum (not constitutionally required). It had to do with the opening hours of hotels (pubs)... and it was rejected too!

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IIRC only 6 of 46 federal referendum questions have carried. Fortunately Aussies see through the BS and tell the pollies to get stuffed most of the time.

In Victoria there has only been one referendum (not constitutionally required). It had to do with the opening hours of hotels (pubs)... and it was rejected too!

I thought it strange when I moved to Melb and discovered camberwell et al were dry suburbs. A hangover from the prohibition/coffee house/power without glory days of the turn of the century I thought. What year was the opening hours referendum?

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I thought it strange when I moved to Melb and discovered camberwell et al were dry suburbs. A hangover from the prohibition/coffee house/power without glory days of the turn of the century I thought. What year was the opening hours referendum?

offtopic.gif

It was in 1956, the relevant legislation IIRC was the Licensing Act 1955 VIC.

http://www.vexnews.c...ur-must-stupid/

In 1956 we had a referendum in Victoria on hotel closing hours. Admittedly this wasn’t citizen initiated but was pandering by the state government to the then powerful wowser lobby. Opinion polls showed massive support for extended hours but a week before the referendum a violent sex crime was committed by a pervert under the influence of alcohol. The No vote swarmed as a result. Only the electoral district of Toorak voted Yes at the referendum.

http://www.faqs.org/...2101245641.html

Once established, six o'clock closing proved surprisingly durable. As the greatest political victory of the Australian temperance movement, it became a symbolic standard around which to rally. Tasmania switched to 10 o'clock in 1937, but six o'clock closing persisted in South Australia, Victoria and New South Wales well into the postwar era. It retained substantial popular support: in a 1947 referendum in New South Wales, six o'clock closing received over a million votes, compared to 600,000 for 10 o'clock closing; in a 1956 referendum in Victoria, the figures were 805,000 for six o'clock and 530,000 for 10 o'clock (Dunstan 1974:127, 130). Ten o'clock closing finally came to New South Wales - after a narrow referendum victory - in 1954, to Victoria in 1966 and to South Australia in 1967.

http://www.walkingme...&t=396&start=18

Text from Melbourne, The Biography of a City - Until 1915 the trading hours of hotels were 6 a.m. to 11.30 p.m. In that year they became 9 a.m. to 9.30 p.m. as a wartime measure, and twelve months later six o’clock closing was introduced as a temporary wartime measure. In 1919, like many temporary measures, six o’clock closing was made permanent. The public by referendum in 1956 overwhelmingly voted against an extension of hours until 10 p.m.

The Licensing Act 1965 ( http://www.austlii.e..._act/la1965104/ ) altered trading hours without a referendum. I assume the referendum in 1956 was not constitutionally required but provided to appease lobby group(s).

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offtopic.gif

It was in 1956, the relevant legislation IIRC was the Licensing Act 1955 VIC.

http://www.vexnews.c...ur-must-stupid/

In 1956 we had a referendum in Victoria on hotel closing hours. Admittedly this wasn’t citizen initiated but was pandering by the state government to the then powerful wowser lobby. Opinion polls showed massive support for extended hours but a week before the referendum a violent sex crime was committed by a pervert under the influence of alcohol. The No vote swarmed as a result. Only the electoral district of Toorak voted Yes at the referendum.

http://www.faqs.org/...2101245641.html

Once established, six o'clock closing proved surprisingly durable. As the greatest political victory of the Australian temperance movement, it became a symbolic standard around which to rally. Tasmania switched to 10 o'clock in 1937, but six o'clock closing persisted in South Australia, Victoria and New South Wales well into the postwar era. It retained substantial popular support: in a 1947 referendum in New South Wales, six o'clock closing received over a million votes, compared to 600,000 for 10 o'clock closing; in a 1956 referendum in Victoria, the figures were 805,000 for six o'clock and 530,000 for 10 o'clock (Dunstan 1974:127, 130). Ten o'clock closing finally came to New South Wales - after a narrow referendum victory - in 1954, to Victoria in 1966 and to South Australia in 1967.

http://www.walkingme...&t=396&start=18

Text from Melbourne, The Biography of a City - Until 1915 the trading hours of hotels were 6 a.m. to 11.30 p.m. In that year they became 9 a.m. to 9.30 p.m. as a wartime measure, and twelve months later six o’clock closing was introduced as a temporary wartime measure. In 1919, like many temporary measures, six o’clock closing was made permanent. The public by referendum in 1956 overwhelmingly voted against an extension of hours until 10 p.m.

The Licensing Act 1965 ( http://www.austlii.e..._act/la1965104/ ) altered trading hours without a referendum. I assume the referendum in 1956 was not constitutionally required but provided to appease lobby group(s).

But don't you think its just a little interesting that governments in this country once asked their populace on moral decisions. Now such decisions are determined by a small back-room group that may often have vested interests.

Personally, I would like to see a few more referendums on matters of social and ethical significance.

Won't make any difference, but it would be fascinating to actually hear the public voice on issues that governments are now deciding for us.

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offtopic.gif

It was in 1956, the relevant legislation IIRC was the Licensing Act 1955 VIC.

http://www.vexnews.c...ur-must-stupid/

In 1956 we had a referendum in Victoria on hotel closing hours. Admittedly this wasn’t citizen initiated but was pandering by the state government to the then powerful wowser lobby. Opinion polls showed massive support for extended hours but a week before the referendum a violent sex crime was committed by a pervert under the influence of alcohol. The No vote swarmed as a result. Only the electoral district of Toorak voted Yes at the referendum.

http://www.faqs.org/...2101245641.html

Once established, six o'clock closing proved surprisingly durable. As the greatest political victory of the Australian temperance movement, it became a symbolic standard around which to rally. Tasmania switched to 10 o'clock in 1937, but six o'clock closing persisted in South Australia, Victoria and New South Wales well into the postwar era. It retained substantial popular support: in a 1947 referendum in New South Wales, six o'clock closing received over a million votes, compared to 600,000 for 10 o'clock closing; in a 1956 referendum in Victoria, the figures were 805,000 for six o'clock and 530,000 for 10 o'clock (Dunstan 1974:127, 130). Ten o'clock closing finally came to New South Wales - after a narrow referendum victory - in 1954, to Victoria in 1966 and to South Australia in 1967.

http://www.walkingme...&t=396&start=18

Text from Melbourne, The Biography of a City - Until 1915 the trading hours of hotels were 6 a.m. to 11.30 p.m. In that year they became 9 a.m. to 9.30 p.m. as a wartime measure, and twelve months later six o’clock closing was introduced as a temporary wartime measure. In 1919, like many temporary measures, six o’clock closing was made permanent. The public by referendum in 1956 overwhelmingly voted against an extension of hours until 10 p.m.

The Licensing Act 1965 ( http://www.austlii.e..._act/la1965104/ ) altered trading hours without a referendum. I assume the referendum in 1956 was not constitutionally required but provided to appease lobby group(s).

Off topic but interesting Mr M. :) Thankyou.

So there have been two distinct periods of wowserism. The earliest period where a lot of pubs became "coffee palaces". The later period coining the term "Six o'clock swill""

We are indebted to Red Smith's coverage of the 1956 Olympics at Melbourne. He wrote a piece called "The Six O'Clock Swill" in which he described the innovative accommodation resulting from a government-mandated bar closing time of six o'clock. This restriction was designed to insure that some of the thirstiest would return home after work, since they were prohibited by law from drinking after six. The unintended consequence was that glasses were saved during the hour after quitting time until the last call came for drinks. Then the emptied glasses could be refilled. Smith noted, "The bartender didn't carry your glass to the tap. He carried a pistol-shaped spigot hitched to a long tube and squirted your glass full where you stood."

But don't you think its just a little interesting that governments in this country once asked their populace on moral decisions. Now such decisions are determined by a small back-room group that may often have vested interests.

Personally, I would like to see a few more referendums on matters of social and ethical significance.

Won't make any difference, but it would be fascinating to actually hear the public voice on issues that governments are now deciding for us.

They are fairly expensive to run though. (A full blown referendum I mean) We could develop an online voting system - Less expensive however I wouldn't like to have the results binding, more a plebiscite. Governments need some room to make unpopular decisions that might provide longer term benefits. At least we would see the end of the reliance on "focus groups".

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They are fairly expensive to run though. (A full blown referendum I mean) We could develop an online voting system - Less expensive however I wouldn't like to have the results binding, more a plebiscite. Governments need some room to make unpopular decisions that might provide longer term benefits. At least we would see the end of the reliance on "focus groups".

It would not be hard to develop a web based system to handle all elections in this country. IMO it is long overdue.

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It would not be hard to develop a web based system to handle all elections in this country. IMO it is long overdue.

Never trust an electronic voting system. Perhaps I should make a poll on it. :)

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Never trust an electronic voting system. Perhaps I should make a poll on it. :)

I remember about 10 years ago reading a white paper on how electronic cash would work (so it was anonymous but also verifiable) wouldn't be hard to extend that to electronic voting. Just keep the source and data open in the same way.

The only issue that voting would have which cash doesn't is extra votes. Which would be trivial to solve.

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I remember about 10 years ago reading a white paper on how electronic cash would work (so it was anonymous but also verifiable) wouldn't be hard to extend that to electronic voting. Just keep the source and data open in the same way.

The only issue that voting would have which cash doesn't is extra votes. Which would be trivial to solve.

Indeed. There are no technological barriers to electronic voting. I have a colleague who is one of the leading experts in this field in Australia.

The problem is public perception.

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Indeed. There are no technological barriers to electronic voting. I have a colleague who is one of the leading experts in this field in Australia.

The problem is public perception.

Well public perception is kind of warped by the companies trying to make a buck in a half arsed way. When all the booths get hacked in pretty trivial ways it is hard to have any hope it would ever be done properly.

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Well public perception is kind of warped by the companies trying to make a buck in a half arsed way. When all the booths get hacked in pretty trivial ways it is hard to have any hope it would ever be done properly.

Yes, the problem is that the first attempt would fail miserably. See the Myki public transport ticketing system as an example. I was meeting with a client a few months ago and Myki came up. They mentioned how they have designed, implemented, and installed many such systems all over the world, but when they tendered for Myki, the Victorian government awarded the project to a subsidiary company that was especially created just for that project, had no experience in such projects, and by an amazing coincidence, was made up from a company who had given technical advice to the government on the project. I believe that one of the company's directors was also a former staff member of the Victorian Labor party, who resigned to start the Myki tender.

The same level on incompetence would also be demonstrated on early voting systems, I'm sure.

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