Mirvac: Land is for Hocking, Not Housing

Follow the blue trees road
Creative Commons License photo credit: lrargerich

Karl Fitzgerald

as published in Crikey 20/02/09

Mirvac yesterday admitted what many affordability watchers know. The housing market is manipulated to suit shareholders over householders.

Due to the fear that an $81.4m half yearly operating profit is insufficient, first home buyers will have to pay higher land and housing prices to support Mirvac’s Executive Incentive Scheme.

Mirvac managing director Nick Collishaw admits to the immense power of land monopolists in Mirvac to delay land releases in existing estates:

“Effectively what we are doing for the bulk of the projects that we have in Victoria is managing a staged release — rather than have a release with 100 lots in it, the stage sizes will be much smaller.”

This behaviour exhibits why Brumby’s land supply handout to the property lobby will do nothing to assist affordability. Land and housing releases are manipulated to suit profiteering over people.

As Australia’s affordability epidemic gets left behind in the backwash of the GFC, the genuine land supply issue is that controlled privately by land banking developers.

Compounding these issues, the write-offs on Mirvac’s investment properties total more than $800 million dollars. Top and tailing the benefits of the system, Mirvac has the power to drip feed land and housing to market such that home buyers of all generations are guaranteed to pay 40% of their income on rent or mortgages.

And the government is silent on this market manipulation.

Governments at all levels are complicit in the rights of land speculators over and above the future of its people. One need only refer to the recent AEC figures to understand the power of lobbyocracy.

For the productive economy to survive, we must push for more effective public finance policy. Higher holding charges on land are needed to force land prices back to affordable levels. Spin-offs include the abolition of payroll, GST and a massive cut in income taxes. Investment in new infrastructure becomes self funding through land value capture.

When this occurs, the land and housing market will no longer be seen as a casino. The risk of global meltdowns will be reduced when we no longer have to borrow so much to put a roof over our heads. Speculators will become producers, hopefully funding the inventions needed for a sustainable rather than sprawling society .

Relatively speaking, who really benefits from rising land and housing prices?

Hudson on Obama’s Banking Bailout


Watch Michael Hudson blister Obama and his economic advisors on Democracy Now.

Digest the hard hitting statements then read Hudson’s Counterpunch piece:

Trying to Revive the Bubble Economy:
Obama’s Awful Financial Recovery Plan

By Michael Hudson

Martin Wolf started off his Financial Times column for February 11 with the bold question: “Has Barack Obama’s presidency already failed?” The stock market had a similar opinion, plunging 382 points. Having promised “change,” Mr. Obama is giving us more Clinton-Bush via Robert Rubin’s protégé, Tim Geithner. Tuesday’s $2.5 trillion Financial Stabilization Plan to re-inflate the Bubble Economy is basically an extension of the Bush-Paulson giveaway – yet more Rubinomics for financial insiders in the emerging Wall Street trusts.

The financial system is to be concentrated into a cartel of just a few giant conglomerates to act as the economy’s central planners and resource allocators. This makes banks the big winners in the game of “chicken” they’ve been playing with Washington, a shakedown holding the economy hostage. “Give us what we want or we’ll plunge the economy into financial crisis.” Washington has given them $9 trillion so far, with promises now of another $2 trillion– and still counting.

A true reform – one designed to undo the systemic market distortions that led to the real estate bubble – would have set out to reverse the Clinton-Rubin repeal of the Glass-Steagall Act so as to prevent the corrupting conflicts of interest that have resulted in vertical trusts such as Citibank and Bank of America/Countrywide/Merrill Lynch. By unleashing these conglomerate grupos (to use the term popularized under Pinochet with Chicago Boy direction – a dress rehearsal of the mass financial bankruptcies they caused in Chile by the end of the 1970s) the Clinton administration enabled banks to merge with junk mortgage companies, junk-money managers, fictitious property appraisal companies, and law-evasion firms all designed to package debts to investors who trusted them enough to let them rake off enough commissions and capital gains to make their managers the world’s highest-paid economic planners.

The Earth Belongs to Everyone


Alanna Hartzok, who we toured around Australia in 2006, has a new book: The Earth Belongs to Everyone. Signifying the clarity of this work, Alanna has been awarded the 2008 Radical Middle Political Book Award. The annual award is given to books that best exemplify a politics that’s grounded in practical reality, but at the same time are deeply creative and imaginative.

Alexia Eastwood provides this review in commondreams.org

Sharing the land and resources of the world more equally is the basis for the ‘Next World Economy’ founded upon comprehensive tax reform and Earth Rights Democracy, says a new book by Alanna Hartzok.

In ‘The Earth Belongs to Everyone’, Alanna Hartzok establishes equal rights to the earth and its resources as a basic human right, identifying sharing as a key ethic in constructing the ‘Next Economy’. This compilation of essays represents the author’s life journey, weaving personal narratives and new economic perspectives around the themes of Earth Rights Democracy and land rights issues. In providing practical and applicable policy solutions, Alanna Hartzok’s analysis stands out in its capacity to inspire optimism and propose affirmative action.

Just $20 from Melbourne’s most extensive economics bookshop.

Hear Alanna discuss the book on this week’s Renegade Economists radio show.

Speculators Urged to help Homeless Fire Victims

Creative Commons License photo credit: Markus Koellmann

Press Release 09/02/09

Earthsharing Australia urges all holders of speculative vacancies to open their doors to the 5000 homeless victims of the bushfire.

“Earthsharing Australia joins all Australians in expressing our sorrow at this awful tragedy and join the call for all Australians to give what they can to help the victims with what is sure to be a long and slow recovery” said Earthsharing Australia spokesperson Karl Fitzgerald.

“We are most concerned at the number of people who will be searching for emergency accommodation in a housing environment when so many houses are being held off the market for speculative gain. This is not a time to be cashing in on the needs of our most needy.

“The 2008 I Want to Live Here report found that speculators were hoarding accommodation for over 18,000 Victorians.” stated Mr Fitzgerald.

“We urge all owners of empty houses to unlock the doors when the imminent call comes for housing assistance.

“Lets hope that the fire tragedy sees all Australians working together, including those who own our most valuable resource – land and the housing that sits on it.”