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The Forum > Article Comments > Infrastructure levies should go > Comments

Infrastructure levies should go : Comments

By Ross Elliott, published 26/7/2013

Depending on whose research you want to rely on, we now have the situation in Australia where between a third and 40% of the price of a new home can be attributed to taxes and other government costs.

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< Itís an axiom of economics 101 that to decrease demand for something, you increase its price. >

ŅWhat?

Not necessarily by any means!

The whole article is premised on the notion that the reduction or abolition of levies and taxes and of urban boundaries and any other restrictions is a good thing, because it would bring down housing prices, end of story.

It is just another example of Rossís incredibly one-sided view, based on a limitless growth ethic, with no thought of the need to slow and eventually stop population growth or that Carr was indeed right to implement policies that moved towards capping the urban growth of Sydney.
Posted by Ludwig, Friday, 26 July 2013 7:41:44 AM
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Australian permits, licenses, registrations & rates are way over the top of decency & that is purely due to the excessive pays of our bureaucrats. We're not getting value for money from them, much more sensible to invest in infrastructure for the future such as Mono Rails & sending teachers overseas for an education.
Posted by individual, Friday, 26 July 2013 6:34:29 PM
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Our population is currently growing at 1.8% annually. According to the ABS, 60% of that growth is due to immigration. Each new migrant immediately needs the full complement of infrastructure: roads, schools, ports, power plants, hospitals, etc., etc. The cost per person is enormous, hundreds of thousands of dollars.

http://www.abc.net.au/unleashed/39930.html

If the migrant is skilled and on a decent salary, he will eventually contribute enough to pay for his share, but it may take decades. An unskilled worker never will. See this paper about infrastructure costs and immigration in the UK

http://mpra.ub.uni-muenchen.de/6869/

What is really being suggested here is that infrastructure levies should be eliminated and existing residents should pay for all the additional costs due to the growing population. This might be reasonable if we just had natural increase (given our low fertility rate) and a modest level of immigration, but the costs are completely out of hand with the politicians' mania for growth. Infrastructure Australia has estimated a $770 billion backlog.

While there are cultural and educational benefits to having some immigration, the days when we all benefited from high population growth are long past. The Productivity Commission has said that there is no large-scale per capita economic benefit (p. 6)

http://www.pc.gov.au/__data/assets/pdf_file/0016/113407/annual-report-2010-11.pdf

The extra pressures on the environment and the livability of our cities are all too obvious. This is a high price to pay so that the property developers can get richer.
Posted by Divergence, Friday, 26 July 2013 8:54:22 PM
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This is a high price to pay so that the property developers can get richer.
Divergence,
There's a perfect example in our area where a builder blow-in could see money making potential & is now developing a fair parcel of land on a small island. It was "his dream" to build posh homes without consulting the other indigenous & long-term residents if they shared his "dream" at the potential of their rates going up because of his "dream"
This is the sort of greedy selfishness that destroys communities at the expense of social cohesion.
Posted by individual, Saturday, 27 July 2013 9:15:12 AM
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<This is a high price to pay so that the property developers can get richer.>

High population growth is harmful to the construction sector. The resultant high property values greatly reduce the expenditure on renovations and new buildings. If it were otherwise why would Ross be complaining?
Posted by Fester, Sunday, 28 July 2013 7:26:45 AM
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