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!

The percentage return on donations for Victorian Govt contracts:

• Leighton – 301% return
• ABN Amro – 684% return
• Baulderstone – 5862% return

What is shocking is that these figures do not include the upkick in land values that the associated zoning changes or infrastructure delivery provide. Big decisions deliver big returns, captured in land values. These would add thousands of per cent in return to each political donation. Our concern for such trends saw us invent the term ‘lobbyocracy’ in 2003. One vote one value has been replaced by one dollar for one decision.

Visit lobbyocracy.org to contribute your story on legalised corruption. Evidence is mounting even at the local government level that new footpaths seem to materialise adjacent to big property developments.

As Royce Millar says, the only reason we haven’t had a similar corruption epidemic in Victoria (as compared to NSW and its’ Woolongong Council fiasco) is that we don’t have an independent anti-corruption commission here. Remember the independence of the Victorian Auditor General was sold off years ago. With these trends prevalent, we must question who is to hold government accountable for the dominance of the costly PPP model (Public Private Partnerships)? Government donors in unions and big business both win under today’s cosy lobbyocracy mantra.