Grputland “Buildings, vehicles and machinery all DEPRECIATE.”

And so too investment properties, 2 ½ % pa for tax (commercial or residential).

Around 20% for vehicles and machinery between 33% and 10% pa, depending upon its expected useable life.

And they all attract depreciation allowance from the tax office.

Re “Investment in such things is motivated solely by current income”

Ignorant Rubbish.

Many commercial investments take years from raising capital to producing return. I have one which has taken 5 years thus far.

Investment in rental property is for longer than one year (=current income) if only because the capital gain tax would be treated adversely.

“And who is this simpleton?

Presumably responding to me,”

You should put a comma where you placed the question mark.

The role of the Reserve Bank is to regulate money supply, print/mint currency ensure deflationary / inflationary surges are stabilized and advise government.

We have "rules" for tax and commerce. All these things are obviously beyond your appreciation.

A profound ignorance to their purpose and process is a poor basis for criticism.

“The tax laws per se would not make a special case of real estate if corresponding changes were made for other asset classes.“

Equalizing out the impact of change. Also known as “rearranging the deckchairs on the Titanic”.

“real estate is a special case”

No, it is not.

“Real Estate” is no more “special” than food, petrol, electricity, telecommunications, banking or a national airline.

“Playing” with tax rates creates a once off surge in the market but does not change anything. After the dust settles, the same old problem of “supply and demand” remains.

As for “what matters is whether the business practice is in the public interest.”

I have always found that the “market” is the best indicator of “public interest”, not one individual, government appointed bureaucrat or massive Ego

A thesis on “Modeling of Horns and Enclosures for Loudspeakers,”

and degree in electrical engineering is deficient of any “fiscal” content or credentials but a Loudspeaker does suit you’re your Messianic Ego.

I will have fun with "ProsperAustralia.org.au" later.

Wizofaus,

As an act of goodwill to all men (& women) –yes all of them.

I won’t engage in arguments today I will offer the following urls (with sample quotes) as Xmas gifts.

- Mr Smith

I’ve been saving this one for a special occassion .

This is from the Executive Summary of the Reserve Bank's submission to the (2004) Productivity Commission Inquiry on First Home Ownership:

“10. The role of investors is particularly noteworthy in the current episode. For every new dollar lent for housing purposes, around 40 cents now goes to investors – a figure much higher than we have ever experienced before. The stock of credit outstanding is rising at nearly 20 per cent per year for owner-occupiers – an exceptionally rapid pace – but for investors the growth rate is closer to 30 per cent per year.”

“12. Thus, we find support for the view that investors have been contributing disproportionately to the increase in housing demand over recent years, with the effect that affordability, especially by first-home buyers, has been reduced.”
______________________________

The paragraphs are numbered 1-26, I recommend starting at 9 - read thru to the end, return to 1 & read again.

http://www.rba.gov.au/PublicationsAndResearch/SubmissionsToParliamentaryCommittees/productivity_commision_inquiry_on_first_home_ownership.html

So, how did the Productivity Comm. Respond?

“The Productivity Commission Inquiry Report into First Home Ownership was released in 2004, and waaaaaay back then, the report pleaded for a review "as soon as practicable" of "those aspects of the personal tax regime that may have recently contributed to excessive investment in rental housing”

http://blogs.theage.com.au/lifestyle/renovationnation/archives/2007/02/negative_gearin.html

Meanwhile in 2007..

June 21 - This self-serving survey blurs the lines between news & PR, nonetheless:

“the number of would-be investors has jumped by more than 75 per cent since the September 06 quarter”

Mums & dads:

“Higher income earners accounted for 57 per cent of all intending buyers.
The number of investors in the 'upper white-collar' sector increased to 504,000 ”

http://www.smh.com.au/articles/2007/06/16/1181414612357.html

___________________

Nov. 2nd

“In the year to September, lending to property investors in Western Australia soared 54 per cent to $10.1 billion”

http://www.theaustralian.news.com.au/story/0,20867,21064277-25658,00.html?from=public_rss

Compliments of the season

- Mr Smith

Thanks, Mr Smith.

Merry Christmas to you, too.

Here's a quote by Steve Keen in "A tale of two parties - and one bubble" in Dissent magazine (http://www.dissent.com.au, RRP AU$7.70, annual subscription $22.00) number 25 which only arrived yesterday:

"House prices have incerased by 250% over the term of the Howard Government, but mortgage debt has increased by more than 500%."

Smithy, I’ve read through your URLs and let me snip a quote from the RBA:

“an unusually strong desire by existing property owners for further exposure to residential property,
either in their own home, or in an investment property.”

I don’t see much talk of speculators anywhere, more like hundreds of thousands
of Australians, investing more in their own homes and buying an additional property if they can. This generation has been warned to provide for its own retirement,
many are listening and taking action. So 1 in 5 have bought second property.

You think these people aren’t mums and dads? Sure they are, empty nesters on
good salaries etc, lots of them. Personally I prefer this situation to that of the
60s and 70s, when only the very wealthy were able to own rental properties,
as the rest were unable to obtain finance.

Where we do have a problem is that so many people see few options to the
property market as a safe place to invest their assets, that’s why they are
prepared to accept such low rental yields, the rba talks of 2.5%. Personally
I prefer the advantages of well run industrial property trusts, given that
large companies prefer not to own property and they pay their rents on
time etc, capital gain to cover inflation still applies and no pesky tenants
to deal with.

But ok, many don’t, they might be enticed to use good returns from bank
deposits as a more trustworthy investment vehicle, if these were not
eaten away by inflation and tax. That’s why my comment about allowing
for inflation when taxing their returns.

The rba mentions the fact that Australia’s higher marginal rates of tax cut
in at a relatively low level. That encourages more and more people to
find ways to try and tuck some of that income away for the future, fair enough.

That’s not the main drain on the public purse, but the fact that something
like 27% of the population see the Govt as their main source of income.

Yabby wrote: "Dagget-cacafonix(sic), if I have any spare words on this thread..."

Perhaps if you desisted from repeating yourself or trying to lead the conversation off on stupid tangents, maybe you would find that you did have a few words to spare.

"...I will gladly explain my points of view, but they are not 3 lines answers,..."

If you would just stick to the point, I think you would find that a lot could be accomplished in 3 lines.

"...so you are free to start a new thread..."

I have made a number of points here, which directly relate to the forum topic or are responses to your own (often tangential) posts. You have so far failed to respond to them, if you have, have failed to respond honestly. It is up to you whether, from now on you, decide to respond adequately, wherever you choose to do so.

"...and we can argue them point for point to your heart's content."

If you do choose to start other forums, whether to promote your own bigotry against the Cuban alternative to laissez-faire capitalism (in which, BTW, 80% of Cubans own their own homes), your shallow pretence at being a population control advocate, or your monstrously immoral efforts to see that Australia's finite endowment of mineral wealth is dug up and exported as quickly as possible, I will respond to those posts.

Just please understand, I don't engage in these discussions for the fun of it. I engage in these discussions in order to counter the harmful misinformation that you and your kind are bent on propagating.

As far as I am concerned, these forums would be far better without your participation. Rather than arguing over whether land speculation is of any benefit to our society, which, to me, seems as silly as arguing over whether smoking does not cause lung cancer or the truth of the literal meaning of the Book of Genesis, I would prefer to engage in a discussion about how to excise the malignant cancer of land speculation from the body of Australian society.

(tobecontinued)

(continuedfromabove)

However, if you fail to respond adequately, I think other forum users will be entitled to conclude that you are avoiding making direct responses to my clear points in order to, instead, argue the details of less critical points where it is relatively easy for you to muddy the waters with repetition and by citing a few facts, which appear to support your viewpoint, in isolation.

---

Yabby wrote, "This generation has been warned to provide for its own retirement, many are listening and taking action."

Off we go on yet another tangent, courtesy of the person who complains of not having enough space.

Yes perhaps we were 'warned' to provide for our own retirement, but where were we given any choice in the matter or of how to provide for our own retirement? Whose choice was it to force us to hand over so much of our hard-earned money in commissions, management fees, exit fees, etc, to a previously miniscule and unproductive sector of our society, that is the superannuation funds?

What seeming idiot decided on our behalf to force the members of Australia's increasingly casualised work force to join a new superannuation fund, together with all of its overheads, every time they changed jobs?

In fact Labor's privatisation of Australia's retirement income was a policy which came directly from the murderous Chilean military junta, which came to power after overthrowing a democratically elected Social Democratic Government of Salvadore Allende.

It was overthrown with the help of the US government, because in the words of mad bomber Kissinger "The example of a successful elected Marxist government in Chile would surely have an impact on--and even a precedent value for--other parts of the world, especially in Italy." (cited in Naomi Klein "The Shock Doctrine"(2007) p451).

While Milton Friedman and other ideological compatriots of Yabby from the Chicago School of Economics, directed Pinochet's dismantling of Yabby's hated Chilean 'nanny state', by selling off publicly owned assets, dismantling social services and destroying protections of workers' wages, his army and secret police killed or imprisoned and tortured Chileans who opposed these policies.