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Holloway calls for abolishment of SA Upper House

Article from Adelaide Now - 20 Mar 2007 (italics my own):

Council is 'wasting our cash'

SOUTH Australian taxpayers have been told to watch members of the Legislative Council in action to see how their taxes "are being misspent".

A bitter row has erupted between the State Government and the Opposition and independents in the Upper House over the way it is operating.

Government Leader in the Council Paul Holloway said if taxpayers watched the chamber in action on Wednesdays "they would be calling for its abolition as soon as possible".

"Just come and see how your money is being misspent," he said. Mr Holloway's frustrations boiled over at the weekend, as the result of a move by the Opposition to ensure select committees of the Upper House were chaired by independents instead of a Government MP.

The Opposition has claimed that because Government MPs are chairmen, they are restricting the committees' operations.

Mr Holloway slammed the move as a breach of time-honoured political conventions. "The Legislative Council is reaching crisis point," he said. "The sooner it is abolished the better." He said the Government had a "big legislative program" and it did not receive any consideration.

"Yet we have nearly a whole day each week being devoted to private member's business," he said. Mr Holloway said that one sitting day in three, not a single piece of Government business was being discussed.

He said that last week, on one of those days the chamber had sat until after midnight "yet they are never ready to discuss Government Bills".

Opposition Leader in the Council, Rob Lucas, said it was a bit rich of Mr
Holloway to attack the Opposition for not debating legislation when it had to force the Government to sit on Tuesday last week after the Adelaide Cup day holiday.

When Mr Holloway calls for the abolishment of the Upper House because it misspends money, does that mean that he would support the abolishment of the Lower House if it is the same?

Proportional representation, as is in the Upper House, helps keep give SA some political diversity, could be said to more accurately represent the voters and helps keep us from a being 2 party system - like you see in the USA.

The Rann Government still has twice as many days as private members bills to debate, and to suggest that you have a mandate for a "big legislative agenda" (when you don't actually have the numbers to do it) is a little silly. I guess we will see if the electorate supports Mr Holloway's suggestion when Premier Rann has a referendum on abolishing-reforming the Upper House in 2010.


Housing Unaffordability by Land Shortage or Taxes?

My thoughts on an article where it is presented that home prices are due to government taxes not land supply.

(bolding and italics added by me)

No land shortage, blame taxes by Anthony Klan
26 Feb 2007 - news.com.au

MORE than 150,000 housing lots are available for development in the nation's three biggest cities, refuting the Howard Government's claims of a land shortage.

The figures, compiled by The Australian, show there are 155,500 lots across Sydney, Brisbane and Melbourne zoned for residential development - between three and eight years' supply - despite John Howard's claims last week that a shortage of land was contributing to the housing crisis and driving up rents.

In Sydney, where housing affordability is the lowest in the nation and continuing to deteriorate, developers have thousands of housing blocks ready to sell, and are sitting on tens of thousands more.

"Every time I see John Howard blaming land supply I see red because it's just not true - there are literally thousands of lots available," said Peter Icklow, chief executive of one of Sydney's biggest developers, Monarch.

Mr Icklow said rather than land shortages, it had been increases in property taxes - levied by all levels of government since the beginning of the property boom - that had led to the affordability crises. He said there was plenty of land available for sale and for development, but there were no buyers at current prices and developers could not drop prices any further without losing money.

"I've got about 3000 lots of land and I can't develop any of them until they take some of these taxes off or we get a 20 per cent lift in prices," he said. "And we're not doing this to be greedy, we just need to make a return. The bank won't lend me money if we can't show a return."

Residential Development Council executive director Ross Elliott said governments at all levels had used the property boom as an easy cash cow, but now that the boom had receded the effect of the new taxes had come into stark focus.

He said inflated taxes were stifling any recovery in the property market and in turn driving the rental shortage. Starting with the Howard Government's introduction of GST on all new homes, and culminating with the NSW Government's infrastructure levy on new homes introduced last year, property taxes had ballooned since 2000.

Taxes associated with a typical house-and-land package have grown by an average of $77,000 nationally in the past six years, with the problem most pronounced in Sydney's northwest, where government costs have ballooned by $115,000 in that time, according to research by consultants Urbis JHD. The group said taxes and red tape cost more than the land.

Illustrating the amount of zoned land available for development across the nation, Stockland, Australia's second-biggest property group, controls 66,600 housing lots, which it will gradually feed to the market as conditions improve. But lot sales are expected to remain low until at least next year in the face of poor rental
returns and low housing affordability. Of the 1900 blocks Stockland sold in the past six months, just 96 - or 5 per cent - were in NSW. And ANZ senior economist Paul Braddick said there was no historical evidence to suggest lack of land supply had significantly driven up prices.

Maybe it is just my skeptical side but the land triumvirate seems to be:

  1. State Governments (who generate land tax revenue and money from land sales via the LMC)
  2. Banks (higher mortgages mean more profits from interest) and
  3. Large Developers (whom the LMC seems to sell the state land to).

You might possibly add in newspapers (who do a heck of a lot of real estate advertising).

Now I don't dispute that the unfair land tax and the GST have contributed to housing inflation, but even if they were removed entirely, houses would still be priced far above their true market value.

It is interesting that the 2 of the land triumvirate are the ones that fail to acknowledge land supply as a root problem. Why would they? They are a main beneficiary! Until other developers (including private land holders like farmers) are able to enter the market, they can (and will) sit on their land til it sells at astronomical prices.

See also: Why Land is Bananas

AdelaideNow... Land bank's policy 'is driving up prices'

Commentry on article by Greg Kelton on 6 Mar 2007 (emphasis my own):

AdelaideNow... Land bank's policy 'is driving up prices':

THE state's biggest landholder - the Land Management Corporation - has been accused of hurting new home buyers by creating false land shortages, driving up prices. ...

In a submission to Parliament's Statutory Authorities Review Committee, the Housing Industry Association says

'The dominant practices of LMC are also exposing the taxpayers of SA to enormous financial risk and undermining affordability through anti-competitive practices,' the HIA submission says.

The HIA warns:

THE state is in danger of losing its traditional competitive advantage of affordable housing.

THE LMC has shifted its role to that of maximising profit and return for the Government, which exacerbated affordability problems.

RESTRICTIONS on the urban growth boundary has created a 'chronic shortage' of residential land, leading to massive increases in prices.

Infrastructure Minister Patrick Conlon yesterday said the claims were 'extreme and absurd'.

He said they were motivated by greed, and the private development sector's 'long-standing antipathy' towards the corporation was because the developers wanted to make more "

Minister Conlon's claims of 'extreme and absurd' I feel are misplaced. I came to the same conclusions about land prices and the urban boundary independantly. and this was one of my main issues when I ran for Mayor of Onkaparinga last year.
In fact, one of the goals outline in the charter of the LMC is to make profit. So the government creates the virtual monopoly (via the Urban Boundary) and the LMC makes the profit for the government!
Talk about putting the cat in charge of the canary!


Liberty and Safety

Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety

motto on the 1759 title page of
An Historical Review of the Constitution and Government of Pennsylvania