Economics for Activists 2008

Karl FitzgeraldPast Events6 Comments

Short Course – 4 x Tuesdays starting Oct 14th*
6.15 – 8pm

Following last year’s highly successful Economics for Activists series, Karl Fitzgerald (3CR – Renegade Economists) returns to provide these gold coin sessions.

Investigate universal economic laws and how they influence our everyday lives as activists, advocates and solid citizens. Now more than ever activists and solid citizens alike need to know the principles guiding the behaviour of the big boys. We will join the dots so we can keep up.

The ins & outs of the bankers bailout, carbon trading, housing affordability, WTO/ IMF and resource speculation will be covered over the 4 sessions.

The first session is the most important. If you miss another session that is understandable, but we will be building on the first session’s knowledgebase throughout the course.

Registration essential
Gold coins will cover nibbles, drinks
Level 1/ 27 Hardware Lane, Melbourne

Download Flyer
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Last year’s event

* we will have Melb Cup night off, with the last session on Tues Nov 11th

Rudd’s $500m subsidy for speculators

Karl FitzgeraldCommentaryLeave a Comment

Today’s big announcement promoted by the Rudd government:

The $512 million Housing Affordability Fund, promised before the last election, is expected to help 50,000 new home buyers in the next five years.

“What I am signalling loud and clear is that we want to tackle the housing affordability crisis for Australian families which has gotten out of control, and we need to start bringing it back under control.” said Mr Rudd.

Will the same sort of economic ‘oversight’ for the First Home Owners Grant be claimed as a defense to this policy handout? Basic economics teaches that when the land market receives a subsidy, land owners have the monopoly power to claim all of the benefits. Similar to the FHOG in effect, the Housing Affordability Fund will result in a subsidy for those who own land where infrastructure is required, typically in sprawl zones.

What is missing is a fairer method of infrastructure funding, one based on the tried and tested technique of Council bonds. Bonds are sold to fund the roads and sewerage infrastructure. Then the beneficiaries to the lifetime of new services pay something back to the Council over 20 years via Council Rates. The present upfront Developer Charges see one generation paying for the infrastructure services in one go. Reform that Rudd!

What is needed to address housing affordability is a genuine supply side solution to unravel the thousands of empty blocks of land withheld from the market by land bankers. Importantly, these are already in established urban communities, requiring less infrastructure and resulting in less travel pollution. Just keep an eye out for them near your local train station. We were shocked to see how many vacant blocks there were in Altona over the weekend. Have a look (above) Julia!

Speed Renting Takes Off

Karl FitzgeraldCommentaryLeave a Comment

but it's what under it that counts!

but it's what under it that counts!

Quoted in today’s Melbourne Leader:

DESPERATE room seekers fret not: speed renting has arrived.

In ways similar to its dating counterpart, speed renting gives desperate room seekers in Melbourne the chance to meet leaseholders without excess travel or advertising costs.

Tomorrow dozens of potential housemates and leaseholders will gather at digital arts bar, Horse Bazaar, for the first ever Melbourne speed renting event.

Leaseholders – revel in your popularity. Interview 3 times the amount of potential housemates you traditionally could (in the same time); then choose the cream from the crop. Room hunters – have a laugh meeting people and save zipping all over town during your weekend.

More details on Speed Renting

A Fair Deal On South African Land reform?

Karl FitzgeraldCommentary, InternationalLeave a Comment

selago_canescens(scrophulariaceae)808
Creative Commons License photo credit: derekkeats

Mark Braund

Guardian UK

The South African government’s recent decision to abandon its Expropriation Bill, aimed at addressing the painfully slow pace of land reform, prompts the question: how can the country move towards a more equitable distribution of land and natural resources 14 years after the end of apartheid? Given the catastrophe in Zimbabwe following Mugabe’s land seizure policy, South Africa needs to get it right.

Land reform has always been high on the ANC’s agenda. In negotiations over the 1996 constitution it secured the inclusion of provisions to enable it to force through the land reforms necessary to give the black majority a real stake in the country’s economy. The constitution includes both a commitment to “the right to land ownership” and an acknowledgment that under exceptional circumstances that right could be suspended to promote land reform. Until recently, however, the government opted not to exercise its constitutional right to expropriate land.


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Bursting the Bubble – SBS Insight

Karl FitzgeraldCommentary, FeaturesLeave a Comment

Last night’s Insight focused on the tragedy unfolding in the housing market and it’s effects on the rest of the economy. It was good to see that Housing Supply side issues got some time on air, but again the property lobby had large numbers in the crowd, no NGO’s got a guernsey, the omnipresent Ross Gittins took the softly softly line and outside of Steve Keen, there was not the sort of hard hitting critique needed.

The Real Estate lobby again pushed for more land supply. Result – cheap land for speculators to extort the market. Someone mentioned building high speed rail to Penrith and surrounding areas. Result – the added benefits are capitalised into higher land prices – benefiting whom? Those speculators with inside contacts. Debt was mentioned at 7 times the average wage – yes, but why? The high cost of land due to land speculation, inefficient government developer charges and the failure to capture the economic rent. Supply side was mentioned by 1 young academic and a few others, but no one dared to mention how.

Supply side? 119,623 vacant homes in Melbourne. Supply would be increased if the most efficient tax of all is implemented, the one students are taught in economics as the most effective way for government to raise revenue with the least distortions. It’s called Land Tax.

Let’s rename it as a Site Rental. No one likes a tax. We don’t like how it is presently administered, but we agree with the property lobby that it should be set at a flat rate. However, we differ in seeing that it should be set at a higher rate, funding the abolition of income and sales taxes.

Holding charges on land are barely 2%, whilst land values have increased at over 10% p.a for over a decade. The two are inter-related. Increase holding charges and speculation is diminished. Land banking becomes no longer profitable. Read more here and on our sister website

But what did other bloggers say?
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