Monday, January 23, 2006

It's Good To Own Land

I am incredibly thankful to my parents for giving me the firm grounding of taking me to a national park camping year after year. It’s given me a sense of grounding that would have been lost when my parents sold up in Ballarat. If I hadn’t decided already to be marinated in rosemary and garlic and lemon and then roasted on a rotisserie at my funeral I would have my ashes scattered there at the park which shall remain nameless namely to keep other people from going there. Nothing personal but that’s the way parks work.
National parks provide a wonderful counterpoint to development. To remove a hotel in a national park and undo the development that takes place there is more expensive (if not also impossible) to replace what has been lost. If you take a long term perspective neiche resort opportunities like raw bushland make economic sense to preserve in the long term. If you take a truly long-term perspective of course it doesn’t matter because the earth is incredibly good at restoring itself. Even if we were to scarify the earth’s entire surface with nuclear weapons it would be a lush green planet again within 100,000 years or so I’m told. But why be fatalistic? Fact is the contribution of parkland and public spaces in the city aren’t recognised in economic terms. Infact due to speculation (my most hated business practice, ruining the stock market for everyone) it is entirely possible to make money simply by buying an empty concrete lot with weeds poking through, fencing it off and sitting on it as the land appreciates.
Your parents are fucking you over because they think land values never go down, a mentality that brought ruination on the Japanese. This is simply because the property market is a financial horserace that moves slow enough for the stupid masses to understand (as masses increase in stupidity the more massive it get’s refer fundamental theory of stupidity). Due to massive superannuation payouts and this general stupidity more and more retirees are choosing to finance their retirement through investment. Buying investment properties that don’t even need to be leased because people who are just receiving their superannuation payout are going to appreciate the land value because property is the only investment strategy they perceive as zero risk. Which is bullshit and homeless people keep asking me for change while rental properties go unfilled. They go unfilled because you don’t have to fill them because you feel like you’re still making money.
Enter earthsharing (go on enter it http://www.earthsharing.org.au ) just another way of thinking about taxation really and beautiful in it’s simplicity. Tax people for owning land, or charge them rent. You wouldn’t lease a shop in a department store and just leave it vacant growing weeds through cracks in concrete would you? No because you can’t afford it. If people were taxed rent to the point they had to make use of the land they owned land would be more accessible for one thing because Baby boomers couldn’t afford to sit on so much and you wouldn’t see closed vacant extinct petrol franchises fenced off in the middle of the suburb you and 12 mates from college are looking for rental properties near public transport.
Furthermore you get rid of income tax. Which is what we want because while my parents are spending my inheritance in Tuscany I’m being taxed 70c in the dollar of my mediocre wage to pay pentions to the Australian majority of bankrupt baby boomers, who blew their super money in bum property deals. That’s one huge tax burden for the working population. Some G8 nations will be bankrupted by it. Why scrap income tax? (I must point out again having studied marketing people should generally just be taxed to shit so they can’t spend money on the crappy consumer goods they want) because if the majority of government revenues is drawn from land tax then the only way to raise revenues is increase land values through investing in infrastructure and services.
Why won’t it happen? (A good devils advocate always makes this assumption and plows on) because there isn’t any incentive of the current voting majority to bring about such a tax reform. They own all the land and want us to pay for their retirement (indirectly). It will happen though if enough of our generation develop a positive attitude towards it because eventually our generation will be paying for everything and I’m sure nobody in our generation looked at the old growth logging policy in Tasmania of John Howard and thought ‘There’s an investment for the future another generation of structural unemployment’ there needs to be a general attitude change. The good thing is you can choose your attitude, if incentive exists and a good way to motivate people is to force them, ‘Aussies’ wouldn’t give a shit about recycling if we weren’t first given smaller wheelie bins that forced us to cut down our waste and then yellow bins for recyclables, we were forced and our attitude shifts. Attitude effects behaviour, behaviour dictates attitude. The tendancy of people is to justify what they do rather than change. So legislate! The GST is good, because it taxes people for consumption and it’s simple. Income tax is good because it (slightly) holds the disparity of classes in check though it’s weakening. Land tax is good because it pushes speculators out of the property market and makes a government that will always want more revenues have to look beyond the three years between elections.
Of course there are limitations to earth-sharing that I must admit haven’t really thought about much, like how do you economically value park land? The masses are so stupid that economic theories that say ‘A ghost gum increase the value of the land surrounding it’ results in some dude planting neat rows upon rows of Ghostgums and other such stupidity. Nor myself believing life isn’t fair is everyone entitled to own land, because we are at the end of the day dumb animals who don’t own the land and need to encourage (through legislation) a value of restraint in trying to control the natural environment. (While camping I saw kids trying to redirect the river mouth) an ignoble moral (read Nietzsche’s – ‘Genealogy of Morals’ just don’t get excited about bashing Jews that’s not the point) add deepecology (a form of meditation based on the theory that in order to control successfully the natural world we have to understand how we are connected to leaves, insects, everything) I did a lot of this while camping. Just force people to appreciate these things that’s all culture really is. I love AFL because I’m bombarded with it, I couldn’t avoid it.
There we guy, I’ve leant my shady name to a cause, but I like it. I said to some smelly hairy girl who talked to me about Goolengook (I never said I wasn’t an arsehole) that you could do more for Old growth forests if you were CEO of a logging company than if you chained yourself to a tree. Lastly read Growth Fetish by Clive Hamilton I strongly recommend it to understand the danger in trying to economically evaluate things that really should only be appreciated and valued in spiritual terms, places like my National Park produced by a chaotic and random set of geographical coincidence which is the only way diversity ever truly occurs. Can’t be done by design. Be patient, we’ll be able to vote in a charismatic crazy of our own in 20 years or so. In the meantime tell your friends.
http://www.earthsharing.org.au – I could probably write more, but there’s shite loads here/there.

2 comments:

Anonymous said...

So. Tom loves land tax. Look, I agree with a lot of what you're saying, especially about the excessive greed of the middle class baby boomers in their great property grab, but ultimately it's going to fall down around their knees as they are hit with an oversupply in the rental market (which there is, there are other reasons as to why we don't keep homeless people in abandoned petrol stations).

But your complaining that the system allows people to create capital gains from investment properties by just purchasing them and leaving them dormant is pretty weak. The system, you'll be happy to know, is geared exactly against that sort of thing. That's why we have land tax. It's also why we have the laws of possession where if you squat on land for long enough (12 years or something?) you can legally claim it as your own. Which is fair enough really, as the owner obviously has no use for it. The same rules apply in intellectual property, which is why you see Hungry Jack's suing "Hungry John's" or whatever. It's not because there are a bunch of executives sitting around a table laying out their evil plans for the day (but maybe there are), it's because our laws are geared towards the principle that if you own something that can create value you have a responsibility to use and protect it, otherwise the public should be allowed to. If Hungry Jack's didn't sue to protect their intellectual properties, then it would be fair for judge to rule that they become public domain.

As for GST being a good tax... good grief. Yes it is simple, but that's about it. It is a regressive tax which punishes the poor and benefits the rich. What I think you really want is to bring back the luxury tax. Now there was one to smack those plasma tv loving bastards in the mouth! Fucking jack that back up to 40% for all I care. But taxing food, books, clothes... and taxing the same amount for someone earning $20,000 as someone earning $200,000 is ridiculous.

As for quantifying a price on your beloved bit of national park. You absolutely CAN recognise it in economic terms. Its value is whatever someone would pay for it. If they were going to mow it down, would you pay $10 to save it? Then its value is $10. As it stands, its value is a lot higher than that, but don't believe for a minute that if the right price came along the government wouldn't sell it. If you really want to protect your patch of land, you need to find some way of increasing its value. What we really need is a way of measuring value to future generations by todays terms. The Kyoto protocol tried to do something like this by creating a value for greenhouse gas emissions. I doubt it will work.

ohminous_t said...

I am pretty ignorant of taxation. As a marketer I'm in favour of people being taxed to the eyeballs to prevent them from buying stupid shit. It would be good if all the extra government revenue would be spent on something good too like mental illness or terraforming mars instead of wasted on buying laptops and mobile phones for administrators in the public education syste who don't do there job as is (which is what education spending by the government too often equates to) And your right there aren't any evil boardrooms in the world saying 'let's make some bad decisions today' just ignorant fuckwits their not evil. Or dogmatic non thinkers. Squatting can be challenged at any point in those twelve years and it doesn't take the government 12 years to build a train station (only about 20 after the need for a renovation is determined)housing does appreciate and often for no good reason. Australia's never had a real estate bubble like Japan.
Earthsharing the site does kind of propose it as a magic cure for everything and it could be right. I'd at least feel a lot better about my pay check if my tax wasn't taken out of it. The Land Tax system worked wonders for the british collonies in the Pacific region where the Dutch and French had failed. It has merit and I don't like the thought of my parents owning everything. A capatilist dictatorship would be nice but democracies waste so much energy in the retention of power which is necessary to allow self determination and handle succession which is where all the benevolent dictatorships fell down. The short term focus though makes investment in infrastructure poor and unpopular which is why Melbourne has one of the worlds worst and inefficient ports, public transport fleets are badly outdated and cost of tickets on pt is comparable with putting petrol in your own car so nobody uses it. So if you have to build stuff to raise revenues you get rid of the most annoying part of democracy (apart from the illusion of real choice)