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The Forum > Article Comments > Supply is code for windfall gains > Comments

Supply is code for windfall gains : Comments

By Karl Fitzgerald, published 30/8/2013

The bureaucrats' golden pen tick from farming to residential re-zoning creates overnight millionaires for those who own land in the right location.

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"Dymphna Boholt and her colleagues are doing exactly what the tax system tells them to do." Exactly! But rather than abolish negative gearing, Australia's politicians cop out, preferring to set up a generational conflict between Gen Y who want to buy a home and the increasing number of investors who, smugly believing they are looking after their own future, also deny affordable home ownership to future generations. Do we have to wait for market crashes to fix all this incredible stupidity?
Posted by freddington, Friday, 30 August 2013 10:43:58 AM
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Yes, and that windfall belongs to the people.
We need some nation building projects, all of which can and should be built on resumed land.
If some of that land then becomes surplus to actual requirements, nudge, nudge, wink, wink, say no more.
Then it could be rezoned as urban and sold, perhaps to even raise enough capital repay all outlays for the project. All while making housing affordable once more.
Projects like say, a very rapid rail system down the eastern seaboard; or, an inland canal that opens up our arid interior, and provides a waterway for roll on roll of ferries, that facilitate our trade with our Asian neighbors!
A dual lane system as far as Lake Erie, would be able to utilize land, much of which is already below sea level.
Huge northern tides could then be controlled by simple lock gates to maintain constant water flow and movement, to move shipping in and out and constantly flush the system twice daily.
With the salt level quite dramatically lowered, some of the water could be harvested by wind or solar powered pumps, and circulated around inside membrane covered agpipes.
A number of plants have enough moisture pulling power, (better than pumps) to utilize some of this water.
If that plant production took place under glass, then the pristine evaporate could be used and reused time and again, for myriad purposes, some of which could be permanent human habitation, which currently only lacks water!
Moving shipping in this way dramatically shortens the route; and, in the most cost effective and energy efficient way!
Rhrosty
Posted by Rhrosty, Friday, 30 August 2013 12:44:46 PM
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<< The bureaucrats' golden pen tick from farming to residential re-zoning creates overnight millionaires for those who own land in the right location>>?

Nah! Canít be true, just ask Eddie Obeid and Ian Macdonald
Posted by spindoc, Friday, 30 August 2013 1:15:13 PM
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Not sure your derision of deriving income passively is correct. When you retire (and a 'are receiving income that you don't have to work for') where exactly is this going to come from? You may say your superannuation, etc, but is this not income that has been generated under generous tax schemes, and that you have not lifted a finger for - all invested in property, stocks, etc to generate your income?
One of the major issues with housing affordability is the 'need' by young folk to have a 4 bedroom house with a double garage, swimming pool, media room, stainless steel kitchen appliances, stone benchtops, etc. This comes at a very high cost and can't be discounted in any housing affordability argument. I do get very sick of young people with cavernous houses, where they only live in 20% of the space, crying poor about their massive mortgage. What happened to living within your means and starting out in a tiny 1br or 2br apartment that costs less upfront, but would more than adequately account for their 'needs' rather than 'wants'.
I do however, agree with your being appalled at the property inventment evangelism that comes from the like of Dymphna Boholt.
Posted by coothdrup, Friday, 30 August 2013 3:42:41 PM
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I get so sick of envy.

I was debt free well over 20, & watched friends investing in real estate, using less equity than I had, but I was too cautious for that. I wanted an iron clad, gold plated guarantee before I would risk my hard earned.

Well some edged in a little & some leapt in way over their heads. Yes a couple got into difficulties & did not fare well. The ones who invested carefully are perhaps a little better off than I am today, but some of those who took the big chances are now very wealthy people.

I don't think they ever hurt anyone, or inadvertently caused anyone any hurt, but they profited from inflation, & can now enjoy the wealth their risk taking has brought them.

I could have done it & been rich, or the worry of being over committed at each downturn could have killed me. AS it is I'm happy, & happy for the risk takers that the risk taking paid off, it just wasn't for me.

I most definitely won't whinge that some who had a go did better than me. Good on them I say
Posted by Hasbeen, Friday, 30 August 2013 4:18:39 PM
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One of my neighbors died a few years back. He was a soldier settler, with a square mile allotment, [640 acres] down Beaudesert way. It was nothing great, a bit of river flat, but mostly sandy country. The type of stuff that when cleared & improved will run a beast to about 7 acres.

He worked it all his life, paid it off, raised 3 kids, & as an old man had a reasonable home, a couple of aging cars, a property that stopped him getting the pension, with a lot of fences requiring repairs, but could not really earn him a living, & not much else.

He subdivided 200 acres of it, into 2.5 & 1.25 acre blocks. By the time he had put in the water treatment plant & reticulation, underground power, & phone, roads & paid about $100,000 per block to various levels of government, he did not become rich.

He & his wife got new cars, & each kid got a block with a house.

He said to me one day, this farming is a mugs game. You work all your life, & you can't earn enough to house your kids. You have to sell the place off to even help them.

He was a nice old bloke, & I miss him, but fortunately my 45 new neighbors on those little blocks are really good people, & an asset to the district. A few have joined the rural fire brigade & other organisations.

I can no longer train my eventers in those paddocks, but then I can no longer train eventers anyway.

Next time you see an old farm being subdivided, just remember, the sale might generate the only spare cash that owner ever had, & it was his after all.
Posted by Hasbeen, Friday, 30 August 2013 4:48:05 PM
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