A warm welcome to our new visitors from the Sustainable Living Festival. Over 90,000 people visited the SLF and we were snowed under with interest, with many expressing an interest in what the Next Economy could be. Of course the answers were there with Land Value Tax as the bedrock to a new economy prioritising the productive sector over the current speculative frenzy seen in land, mining related shares and water rights to name a few. The Next Economy must reflect our economic as well as democratic rights. As our zine (below) mentions, if we are all born onto the planet as equals, why aren’t we all shareholders to the earth’s naturally rising value? This would reduce incentives to pillage and slow down the intense growth mantra economies are forced to abide by.
With this recognition of the commons, the common-wealth (the land, the water, the air and all other gifts from nature) would be more respected. Economic interest would develop a sense of stewardship for future generations. Accompanying this would be the knowledge that our publicly built assets, our infrastructures such as dams, gas and power piping and the like are valuable public commodities. If they are well managed, all of society benefits with the lowest cost operating system. Low utility prices give our industry an advantage over neighbors.
However, in today’s world, if it’s not available for the FIRE (Finance Insurance and Real Estate) sector to profit from, then a full frontal attack on our last remaining public utilities is activated (as is currently underway) to ram through more privatisations. The public loses out due to these newly privatised entities having a legal mandate to return shareholder dividends – first and foremost. This leads to maintenance cutbacks and reliability suffers. Listen to a recent Renegade Economists show on Energy Price Gouges with fmr CSIRO researcher Chris Mardon. There are over 10 different ways we are being gouged, something I hope to spell out online soon. These are much more substantial than the effects of the carbon tax on pricing. A convenient smokescreen.
This leads nicely to the other tenet to a New Economy – the need for a charge on pollution. As Christine Legarde (IMF chief) said over the weekend:
“I do think that climate change issues and progress in that regard are critical and are not just fantasies, they are real issues…..I would hope that it (Australia) continues to be a pioneer (on Carbon Tax).”
We had much interest in our More Trains poster. It was excellent to see the interest in the issue continue to build, with much help from the Melbourne Transport Forum. Here is our new poster describing the process:
We heard of many infrastructure related stories over the weekend. A Sydney-sider reminded that land values had increased by over $100,000 for many lucky landowners neighboring Sydney’s new Inner-West light rail. This highlights just how easy it could be to finance new transportation (and new public works in general). Read the article to see how many have enjoyed an actual doubling of their property valuations in what is called a ‘windfall gain’. This is a leakage financed by the wider public into the pockets of the lucky few.
The sooner the general public alerts the ‘Infrastructure Government’ to the potential enabled by capturing approximately 1/3 of the uplift, spread over 20 years and ‘value captured’ by local council rates, the more likely is PM Abbott to achieve his desired status. Instead he is proposing an extension of the financing model that has already seen two infrastructure companies go bankrupt in the northern states. The efficiency premium delivered by value capture is undeniable. Go into more detail via the value capture primer on our Prosper site.
Another news item that shocked over the weekend was the knowledge that 40 year mortgages are now being offered. This should be illegal. This will enforce greater debt over longer periods.
The Perma-Nomics talk was well received. Unfortunately our recording did not work, however, a paper will be written up in the coming weeks and perhaps a podcast on the Renegade Economists.
Lastly, many liked our zine over the weekend, featuring some of our latest cartoons (via Sam Wallman) and graphic designer Yuki Kamimura. Please download and share. It is presented here formatted for an A5 photocopy, which online does not read as sequentially as one would like! Print it on A4 double sided, fold it in half and pass it on!
See you next year at the SLF, if not before at one of our upcoming events.