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Posted by: leofoley | November 4, 2011

Paying for the ‘Red Awnings’

Hobart has been obsessed for some time about some red awnings that have been attached to a sandstone heritage building in Hobart.  The building is the former Savings Bank of Tasmania, but is now in private hands, and used as a residence.  The owners spend much of theri time in Sydney, and use the Murray St residence as their away ‘townhouse’.  I have no objection to that, and according to reports, they have transformed the interior of the building very tastefully .  I applaud that.

But there is a bigger issue.  The Tasmanian Land Tax system should ensure that Tasmanians get a proper return on inner-city land values.  Giving them away to wealthy buyers is very bad.  Poorer Tasmanians pay the price, either by higher taxes on things they make or do, or by reduced services of the things a community needs.  I wrote this letter to The Mercury, to bring attention to the problem.

Now that the red awnings saga is over, we can think of matters that matter. I suspect that poorer Tasmanians awaiting surgery have had more pressing concerns than the shade of red used. They would be worried about their pain and the waiting list.

There is a link. The Murray St property, if it is now designated as the ‘Principal Place of Residence” will be exempt from Land Tax. Formerly, when used as a business, it would have contributed significantly to the State’s coffers. But it is still valuable land, in the city centre. The owners should contribute accordingly.

We cannot continue to ignore the most equitable, efficient and progressive revenue source. Put simply, we should all pay for the share of the earth that we occupy. A flat rate land rent system on all land would make us all better off. We could afford the services we require.

Of course, we cannot know exactly what payment is made on the property. Apparently, that is private information. Why? The tax payable on every property should be published for all to see and compare. What is there to hide?

Posted by: leofoley | October 7, 2011

A Fairer Tax System

Having read ‘letters’ in The Mercury, today, I’ve fired off this response to one about the tax system:

Ed Sianski’s warning  (Letters 8 Oct) about the tax system’s inability to fund basic services such as health and housing is timely.  Where does our money go?
As it happens, a new documentary “Real Estate 4 Ransom” explores this issue.  It is screening, once only, at the State Cinema on Wednesday 12 Oct at 6pm. Entry is by donation.
It investigates inefficiencies in the tax system that impact on potential homeowners and small businesses. It offers a saner future.

Posted by: leofoley | October 7, 2011

Abandon Fixed Charges

Be Fair; Abandon Fixed Charges

“All candidates for Hobart City Council should clearly state their view on increasing the Fixed Charge component of its rates charge”, says Leo Foley, a candidate for Hobart City Council. “Fixed Charges shift the rates burden from those with well-located and expensive land to those with less valuable land. It is a direct transfer from the poor to the rich,” Foley says. “Fixed Charges are inequitable. They work like a Poll Tax, the very issue that spelt the end for Maggie Thatcher. Any supporters here, amongst our Aldermen, should also be dismissed by the people”.

The State Government recently amended the Local Government Act to allow Councils to raise up to 50% of their rates revenue through Fixed Charges. Access Economics, in a Report to the Government, said that any more than 50% would be inequitable. “In fact, any Fixed Charge is inequitable”, says Foley, “its just that it becomes more obvious as the percentages increase. Its hard to comprehend that a Labor Government would allow such an unfair change to the Act”.

Local Government charges have increased dramatically in recent years, with all Councils using AAV as a rating base. The call for Fixed Charges is seen as a response to the inefficiency of that system. “The answer is not to debase the rating system by introducing Fixed Charges, but to introduce a truly fair system, Land Value Rating, instead”, said Foley.

It is the WISDOM OF THE LAND.

Posted by: leofoley | October 4, 2011

Lady Franklin’s vision splendid – doomed!

“A proposed subdivision in Lenah Valley will spell the end of Lady Jane Franklin’s vision for the area,” says Leo Foley, a candidate for Hobart City Council.

Ancanthe Park was gifted to the people of Hobart by Lady Jane Franklin, who built her beautiful ‘glyptotech’ in the heart of Ancanthe – “The Vale of Flowers”. She donated 10 acres of land for the park, and set aside another 400 acres as a working farm to support the park’s development.

Sadly, the remnant park is now a neglected 2 or 3 acres, with roads, a bus terminus and even private housing having been allowed to encroach on it. “The 400 acre farm was sold off for profit decades ago”, said Foley

Now, 6 acres of adjoining land is about to be developed in another very ordinary subdivision. 16 blocks are planned.  Once built, Ancanthe may as well not exist. Lady Franklin’s vision was not just her beautiful museum, but its relationship with its surrounds, and Mt Wellington looming overhead. “A paling fence is proposed, instead.  Oh, for a visionary now!” said Foley.

“There is still time to stop this atrocity”, Foley said. “Hobart City Council should purchase the land, with a view to honouring Lady Franklin during her bicentennial in 2036.  I call on all Council candidates to make a stand and support the purchase”.

“Lady Franklin was, perhaps, Tasmania’s most important female figure,” Foley said, “Her vision deserves our full support.”

Interested residents should check the HCC website, under Development Applications – 270 Lenah Valley Rd.  Representations close on 12 October.

A Public Meeting will be held at the Lenah Valley Community Hall, on Monday, 10 October at 7.30pm, to discuss the proposal.  All interested persons are invited to have their say.

At the meeting, I will put forward a motion for Hobart City Council to purchase the land, and to incorporate it into Ancanthe Park.

It is the WISDOM OF THE LAND.

 

Posted by: leofoley | September 30, 2011

Real Estate 4 Ransom

Australia’s economic system makes it nearly impossible to buy a house. Prices have risen from three times to five times average earnings in just the past eighteen years. Young Australians struggle to buy a home.

Those that do buy are mired in a sea of debt. Their life is one of debt-slavery, putting extreme pressure on their relationships and creating huge social costs. Housing costs are both the biggest item in household budgets and the fastest increasing cost – having increased 55 per cent over the last six years (Australians for Affordable Housing, Sept 2011).

One of the more fundamental reasons for Australia’s home affordability crisis is a tax system that preferences property investment over almost any other way of generating income, be it through wages, owning shares or simply putting your money in a bank. The tax system is stacked in favour of property speculation, which makes some people very rich, while leaving others, particularly young people, out in the cold.

The Global Financial Crisis demonstrated the danger of relying on a debt-fuelled property bubble instead of creating real wealth. The bubble burst around the world, and Australia is not immune to the effects. The worst may be yet to come.

When Ken Henry reviewed the tax system in 2009, he proposed that stamp duty and other transfer taxes be scrapped, and be replaced with a broad-based Land Tax. This would encourage land and buildings to be better matched with their most valued purpose, reduce the overall cost of housing, and increase incentives for large-scale housing investment.

These issues are explored in a new documentary, “Real Estate 4 Ransom”. The documentary investigates the inefficiencies of the economic system and the impact this has on potential home-owners and small businesses. With a simpler tax system, it argues, entrepreneurs have a better chance to succeed and the average Australian has a better chance of owning their own home.

The film features high profile economists, international guests and local home-buyers and renters. It features empirical evidence and testimonies from credible sources to debate whether Australia’s system of taxation is fair for the community and for future generations. It is fast-paced, and the soundtrack is well worth the admission fee.

Real Estate 4 Ransom will premiere in Tasmania at a special screening at the State Cinema, North Hobart, on Wednesday, 12 October, 2011 at 6pm. Entry is just a $5 donation, at the door.
Check out this preview, and then I’ll see you at “The State”:

http://player.vimeo.com/video/26707546?title=0&byline=0&portrait=0

Posted by: leofoley | September 30, 2011

Land Tax is best – SMH

Jessica Irvine, writing in the Sydney Morning Herald today (30 Sept), raises some huge questions about our tax system.

She says:  ”Ahead of next week’s tax forum in Canberra, we can expect to hear a lot about the need to increase the goods and services tax and cut the company tax rate. But the most messed up part of our tax system is the way we tax housing.

The tax system is stacked in favour of property speculation, which makes some people very rich, while leaving others, particularly young people, out in the cold. Notwithstanding the current cooling in the property market, affordability remains stretched for many would-be buyers. It’s fair to say that if you wanted to design an efficient way to tax housing – without distorting activity or encouraging price speculation – you’d probably do the opposite to now.

You wouldn’t give big tax breaks to speculators and investors, including negative gearing and capital gains tax discounts. You wouldn’t let home owners pocket every dollar gained through rising property prices, while taxing their labours at 30-ish per cent.  You wouldn’t tax new housing through developer charges and infrastructure charges more heavily than established housing.  You wouldn’t tax people through stamp duty simply for moving to accommodation more suitable to them, or closer to where the jobs are.  In Australia, we do all of these things. “

She concludes that a land tax is the most efficient and equitable tax.  She gives six reasons why that is the case.  There are many more.
Readers of this blog will be well aware that I have advocated for a shift to a land rent (tax) system.  It is pleasing to see the SMH shining light on this important issue.  We can only hope our local paper will follow suit.  It is the WISDOM OF THE LAND.
Posted by: leofoley | September 29, 2011

Candidates are out there!

The Mercury Editorial on Thursday, 29 September, laments the lack of contests for Mayor in several municipalities. Of course, we all want more choice, but under the present system, there are valid reasons why people do not put their hand up for Mayor, or as a Councillor.

It is often claimed, even quoted in the Editorial, that local government is connected to the people like no other form of government. It is “grassroots democracy in action”. But is that true? How often do we see our elected councillors? What effort do they make to connect with the people?

Interested citizens form community associations, spending countless hours trying to improve the amenity of their local area. Decisions are then taken by Council that directly negate that work, as if ‘big brother’ knows best.

There is a reason for this disconnect to the citizenry. Our voting system, the technically superb Hare-Clark system, delivers ‘name’ candidates to Councils.  Hard-working, low-profile candidates have no chance in this age of celebrity.  A radio personality, former government member, or a TV personality, does not need to campaign.  Kylie Minogue or Mickey Mouse would be a shoe-in’.  Councillors are elected on their name or face recognition.  There is no scrutiny of their ideas, or lack of them.

Good candidates do stand, but most are discouraged after their first try because the ‘name recognition’ of existing councillors makes it all but impossible to displace them.  The advantages of incumbency are numerous, not least the ability to use proposed council projects as their own policies. These are the reasons we see the same faces around council tables for decades.  A real democracy would make it possible to bring new faces, with fresh ideas, to councils.

The cynicism of the public is another barrier. Standing for public office should be seen as a worthy ambition, but disenchantment with politicians at all levels encourages a negative attitude that candidates stand only for their self-interest.  There are good people offering their candidacy. They desere our full support.

In a media age, the cost of a campaign is considerable, creating another barrier for independent, community-minded candidates.  Political parties have recently entered the local government scene in Tasmania.  Party candidates receive support, both financial and practical, that gives them a great advantage over the independents.  Party candidates have a volunteer base for letter-boxing and posting of signs, and a professional organisation for media/PR opportunities, as well as strategic advice.  Independent candidates do all of this themselves, while footing the bill for the privilege.

We should be careful what we wish for with Party-backed candidates.  Success by one Party will encourage others to field candidates.  We have seen this already, with the Labor Party endorsing candidates in Hobart and Glenorchy to match the Greens.  Party-dominated Councils are rife on the mainland.  Their performance is poor.  Councillors represent their party interests, rather than the public interest.  Unruly Council meetings and back-room deals are normal behaviour.  At present, 152 councils in NSW are under investigation for corruption.  We don’t have that problem in Tasmania – yet!

The ageing of councils (and candidates) concerns many people.  It is natural that, as we live longer, people will want to contribute longer.  Yet, we need to consider why we aren’t attracting younger candidates (except party members with higher ambitions).  It was sad to see a young candidate excluded because of a bureaucratic rule. He posted his nomination on time – surely that is enough.  There are too many rules, and they create barriers to make the system impenetrable by normal thinking humans.  Why, for instance, does every advertisement need to carry the name and address of the person authorising the advertisement.  Surely the ‘authoriser’ could be registered by the the Electoral commission.  That would save candidates considerable money spent on useless authorisations, that serve little purpose.  It is another barrier to independent, less well-off candidates, who foot the bill for this nonsense.  Sometimes the authorisation costs more than the message!

Councils have meetings – interminable, boring meetings. Why would a young person want to subject themselves to that purgatory, when all of their other communication is done on-line, by phone, text or Facebook.  Councils must bring themselves into the 21st century to engage with their younger citizens.  Future civic leaders are out there; Councils need to find ways to engage with them.

The way forward.  There is a solution to all of these problems. The voting system; the name-recognition problem; the party politics; the cost of campaigning; the ageing of Councillors; and the rebuilding of democracy.

Our society has lost its focus on grass-roots democracy.  We no longer know our elected representatives.  I believe we should look at a multi-level democracy.  Neighbourhoods of about 500 residents would elect one of their number, who is already working in a community group of some sort – be it Progress Association, Little Athletics, or Landcare (or any other) – to be their representative.  S/he would meet with other elected representatives of other neighbourhoods to form a suburb residents group, of around 5000 people.  Councillors would be drawn from that group. In this way, only people who are already working in their community would be elected, and only people with a broader focus would be elected to the higher level.  Hare-Clark would work well at this level, because candidates would be well-known in their local areas.

If and when Council amalgamations take place, then the system would simply utilise another tier to accommodate the additional numbers. A city of 200000 (Greater Hobart) would elect its Council by the same method as the current small (50000) Hobart Council. It would make the transition to fewer Councils easier.

Democracy is fragile. We need to ensure the system makes it fair for everyone, and that our representatives are truly ‘of the people, for the people’.

Authorised by Leo Foley, 31 Brushy Creek Rd, Lenah Valley, Tas

Posted by: leofoley | September 28, 2011

Democracy Rules – OK!!

One of the cornerstones of democracy is the idea that citizen participation is essential to good government.  Nowhere is this more true than at the local government level.

Public involvement engages citizens, community groups, organizations, and businesses in problem solving, planning and decision making at both Council and staff levels.  Above all, public involvement processes aim to inspire people, groups, and organizations to take an active role in caring for and enriching their community.

Public involvement processes are designed to:

  • inform citizens, groups, and organizations about specific decisions likely to affect their lives
  • ensure all views are considered in planning and decision making
  • create joint visions that speak to multiple interests and concerns
  • initiate action to resolve issues and problems.

Local government is the closest approximation to the idea of democracy in this country. Municipal councillors are ‘of the people’ and move among them.  While we want the efficiencies of mergers and amalgamations, we don’t want to lose that close representation. In fact, we want to enhance it.

Rating reform provides a pertinent example of how democracy can be lost.  Lets look at the New Zealand experience.  In NZ, hundreds of resident polls have been held over the years, with an overwhelming number voting for Land Value Rating.  90% of municipalities had, by 1982, adopted Land Value Rating after ratepayers opted for that system.  Wherever Land Value Rating was introduced, it followed a poll of electors, and profound social concern.

On the other hand, wherever Capital Value or Annual Value rating applies, it has been imposed by Government or by a Council,  contrary to the wishes of ratepayers in almost every case. (Not just in NZ – remember Jeff Kennett!!)

Democracy is fragile.  We must protect it at every opportunity.  Let the people have their say, and act on their collective wisdom.

 

Posted by: leofoley | September 26, 2011

My simple philosophy

Many people ask where I get my ideas.  As it happens, they are all based on a single philosophy  -  that the earth belongs to all of us.  How simple!

A growing number of people around the world subscribe to the same view.  It has a name, “Geonomics“, a term coined by Jeff Smith in Seattle.  There is no need for me to describe Geonomics;  Jeff does so admirably.  Here is his description:

Geonomics in a Nutshell

The world did not come without a way for people to prosper, and the planet to heal and stay well.  That way is geonomics.

Economies are part of the ecosystem.  Both generate surpluses and follow self-regulating feedback loops.  A cycle like the Law of Supply and Demand is one of the economy’s on/off loops.  Our spending for land and resources – things that nobody made and everybody needs – constitutes our society’s surplus.

Those profits without production (remember, nobody produced Earth) can become our commonwealth.  To share it, we could pay land dues in to the public treasury (recall the Minerals Resource Rents Tax) and get rent dividends back, a la Alaska’s oil dividend.  Doing so allows us to axe taxes and jettison subsidies.

Taxes and subsidies distort prices, benefit the well-connected more than anyone else, reinforce hierarchy of state over citizen, and are costly to administer.

Land dues, conversely, motivate people to not waste sites, resources, and the ecosystem while rent dividends motivate people to not waste themselves.  Receiving this income supplement – a Citizens Dividend – people can invest in their favorite technology or outgrow being “economan” and shrink their overbearing workweek in order to enjoy more time with family, friends, community, and nature.

That is the world I am working for.  It is the WISDOM OF THE LAND.

Check out Jeff Smith at:  http://www.progress.org/geonomy/index.html

 

 

Posted by: leofoley | September 23, 2011

Land Value Capture – simplified!

After a couple of articles with too much depth, I hope I’ve found a way to explain Land Value Capture more simply.  It really is quite simple.

Infrastructure adds enormous value to land in prime locations, acccording to its proximity and the services provided.  Land Value Capture simply recycles the publicly funded windfall gains that accrue to land owners.  These windfall gains are captured over the life-cycle of the infrastructure, so that one generation isn’t hit with the total costs.

Government bonds would finance the initial investment.  Land owners then pay the community back for the new infrastructure over the lifetime of the asset.  Users would pay only for the running costs eg fares on a train or lightrail.  Fares would be reduced considerably, encouraging more users.

A bonus is that LVC would keep a lid on land value increases, allowing businesses the opportunity to access cheaper sites, and not be over-burdened with land-related debt.  Everyone wins with Land Value Capture, except the speculators.  It is the WISDOM OF THE LAND.

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