An entity directed by HSN's Rafi Assouline and Rebel Property's Allen Linz has filed plans for an impressive new precinct in Woolloomooloo.

The major mixed-use development would transform a prominent William Street site into a new residential village anchored by affordable housing and a large public park.

The proposal, submitted as a State Significant Development Application, covers 164-172 and 174-194 William Street, a 6,398 sqm site between Forbes Street and Dowling Street on the southern edge of Woolloomooloo.

Designed by fjcstudio in collaboration with Bangawarra, Studio Bright and Tribe Studio Architects, the scheme would deliver 227 apartments across four residential buildings ranging in height up to 18 storeys, alongside retail space, public domain improvements and a new publicly accessible park.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="0eb59b7c-914a-4a5c-b849-3a56749f5e93" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.18.51%E2%80%AFAM.png?VersionId=mxM6EEqeoLjrCiTlCzTKTvzpKuh6kSkH" />

It's another design scheme for Rebel, who took <a href="https://www.apartments.com.au/news/nsw/first-look-rebel-property-group-takes-woolloomooloo-precinct-to-nsw-government">concept plans to the NSW Gov late last year</a>.

The latest plans will be a mix of 167 build-to-sell apartments and 60 affordable apartments, with the affordable housing component representing 15 per cent of the project's gross floor area. The apartment mix includes 12 one-bedroom, 53 two-bedroom, 89 three-bedroom apartments and 13 penthouses, while the affordable housing component would comprise 42 one-bedroom and 18 two-bedroom apartments.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="3b3d4553-8a8c-4af5-aa8c-519ffb1e28c6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.20.12%E2%80%AFAM.png?VersionId=_Yb6ibN7eDnOtQjCNDK2eviORa4qzgv." />

Rebel Property is seeking to take advantage of the NSW Government's infill affordable housing bonus provisions under the Housing SEPP, which provide additional floor space and height in exchange for the delivery of affordable housing for a minimum of 15 years. The planning pathway allows a 30 per cent increase in floor space ratio and building height where 15 per cent of the development is dedicated to affordable housing.

&nbsp;

At the centre of the development is a 1,356 sqm sunlit public park designed to become a new community gathering space at the gateway to Woolloomooloo. The park would be complemented by a network of pedestrian laneways connecting William Street with the surrounding streets, improving permeability through what is currently a largely impermeable block.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="257af931-a393-4007-8c6d-7219796df58d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.20.51%E2%80%AFAM.png?VersionId=KAHy94GrhaReFsWTGDKfy39EDJ8gEEv4" />

The design team says the public domain has been heavily influenced by the site's topography and Aboriginal cultural heritage, drawing on the escarpments, gullies and landscape characteristics that historically defined the area before urbanisation. The landscape design has been developed in partnership with First Nations consultancy Bangawarra.

The project would be delivered across four separate buildings. The William Street East and William Street West buildings, designed by fjcstudio, would contain the majority of the apartments. Melbourne-based Studio Bright has designed the Forbes Street building, while Tribe Studio Architects is responsible for the Dowling Street building.

Rebel had secured approval for the concept plans late last year.

Joel Robinson

First look: HSN, Rebel, advances Woolloomooloo precinct plans

A locally heritage-listed furniture showroom on Water Street is set to become the centrepiece of a new mixed-use residential development as local developer&nbsp;<a href="https://www.apartments.com.au/developers/keylin-group">Keylin</a> seeks approval for <a href="https://www.apartments.com.au/new-apartments/lotus-on-water-street-290-water-street-fortitude-valley-qld-4006">Lotus on Water Street</a>, a 15-storey project on the Fortitude Valley side of Spring Hill.

The proposal spans 290 Water Street and 137-141 Warry Street, combining several properties into a 2,869 sqm site that sits between Fortitude Valley, Spring Hill and the rapidly evolving Victoria Park precinct. Keylin's plans would deliver 132 apartments alongside new retail, hospitality and commercial space, while retaining and repurposing the historic Brunswick Home Furnishers Showroom that fronts Water Street.

Designed by <a href="https://www.apartments.com.au/architects/jackson-teece">Jackson Teece</a>, Lotus on Water Street comprises a 12-storey residential tower rising above a three-storey podium and communal rooftop terrace. The development includes 76 apartments classified as multiple dwellings and a further 56 units proposed as short-term accommodation, designed to be flexibly used as either accommodation or permanent residences. The apartment mix comprises six one-bedroom, 54 two-bedroom and 16 three-bedroom homes.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="9822bb79-6c49-49c9-95ba-319e8c8d81c3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20front.png?VersionId=ioW8zbN4UVebbLetTFuv92t.HkdgfR5e" />

Residents would have access to an extensive rooftop recreation level spanning more than 1,200 sqm of communal open space. Plans include a pool, gym, sauna, infrared sauna, yoga area, library, private dining room, barbecue facilities and landscaped entertainment spaces, making the rooftop the project's largest shared amenity offering.

At street level, the proposal focuses on the adaptive reuse of the heritage buildings along Water Street, where 518 sqm of retail and commercial space is planned across shop, office and food and drink outlet uses. A permeable residential lobby would be positioned between the retained heritage buildings, creating a pedestrian connection between the historic streetscape and the new tower behind.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="269cf3e0-7d13-48bf-a318-05a00deb5c10" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20podium.png?VersionId=DLXmTCLsp6GOcLpQ0h.0z7wKCw59EhN_" />

The heritage retention strategy is central to the scheme. The development application notes that the Brunswick Home Furnishers Showroom and adjoining heritage buildings will remain, with only non-significant structures on the site earmarked for removal under a previously issued Heritage Exemption Certificate. Levels one and two of the new podium are recessed behind the heritage façades to maintain their prominence within the streetscape.

Jackson Teece has drawn inspiration from the site's manufacturing history when designing the podium. The planning documents state that the façade incorporates perforated metal screening that references the woven and rattan furniture historically produced on the site. Cascading and climbing plants are integrated throughout the podium to soften the building's presentation and screen parking levels behind. The landscape strategy also informs the project's name, Lotus on Water Street, drawing on the historic Spring Hollow waterholes that once ran through Spring Hill and the blue water lilies associated with Meeanjin, Brisbane's traditional name.

The proposal also incorporates the neighbouring property at 141 Warry Street, currently occupied by a healthcare service. The existing building would remain, with nine dedicated parking spaces allocated within the new development to support its ongoing operation. In total, Lotus on Water Street proposes 117 car spaces, including 110 resident spaces and seven visitor bays, alongside 100 bicycle spaces.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="70cf07bc-4fd8-4e70-92dd-be8b21c4e4f0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20site.png?VersionId=txlxrJImM0Sm_vTzHVKh5DDUkyL_CiiA" />

The site sits within the Spring Hill East Precinct of the Spring Hill Neighbourhood Plan and is positioned around 650 metres from both Fortitude Valley Station and Exhibition Station. It is also within walking distance of the King Street precinct, Royal Brisbane and Women's Hospital, Herston Quarter and Victoria Park, which is earmarked to become a major venue precinct ahead of the Brisbane 2032 Olympic and Paralympic Games.

Planning documents describe the location as a key gateway between Spring Hill and Fortitude Valley and highlight the area's increasing importance as new transport infrastructure and Olympic-related investment reshape Brisbane's inner north. The development team argues the project will contribute additional housing supply while activating a section of Water Street that has historically received less investment than other parts of the Valley.

Keylin has become increasingly active across Brisbane and southeast Queensland, assembling sites in strategic inner-city locations. They are currently selling and delivering <a href="https://www.apartments.com.au/new-apartments/oria-spring-hill-447-gregory-terrace-spring-hill-qld-4000">Oria Spring Hill</a>, just over 140 apartments due for completion in 2027.

Keylin plans heritage-led Lotus on Water Street apartment development in Fortitude Valley

Roseville is poised for a wave of new apartment development following the NSW Government's rezoning of land around Roseville Station under its Transport Oriented Development program.

The new planning controls have unlocked significant development potential within walking distance of the station, with a number of sites expected to be amalgamated and redeveloped in the coming years as developers seek to take advantage of the increased density allowances.

One of the more restrained developments in the precinct, and set among the first to be delivered having commenced well before the recent changes, is Hyecorp's Juliet. The boutique apartment project is already well under construction and remains on track to welcome residents by the end of the year, offering a markedly different proposition to many of the larger-scale developments now likely to emerge across the suburb.

[smartcode_project:default project_id=7395 project_image_fid=278194]

<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet</a> will comprise just&nbsp;34 one-, two-, and three-bedroom apartments opposite Roseville Station. For Hyecorp, which has delivered projects across Sydney's Lower North Shore for more than three decades, Roseville presented a rare opportunity to address a growing gap in the market.

"<a href="https://www.apartments.com.au/developments/roseville-nsw-2069">Roseville</a> has long been one of the North Shore's most tightly held and desirable suburbs, offering a unique combination of village charm, established greenery, excellent transport connections, and proximity to some of Sydney's best schools and lifestyle amenities," Hyecorp said.

"We recognised a growing demand from local homeowners seeking to downsize without leaving the community they have built their lives around. The location presented a rare opportunity to create homes that cater specifically to that buyer profile."

[smartcode_project:default project_id=7395 project_image_fid=278196]

The six-level development has been designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> as a collection of residences that feel more like homes than apartments. The brief centred generous floorplans, abundant natural light, quality finishes, and strong connections to outdoor space.

PBD Architects drew inspiration from Roseville's established garden suburb character, creating a building that sits comfortably within its surroundings rather than dominating them. The architecture incorporates natural materials, soft forms, layered landscaping, expansive balconies, and generous setbacks to strengthen the connection between residents and the suburb's leafy environment.

"The focus was on designing spacious, house-like residences for discerning owner-occupiers and downsizers who wanted to remain on the North Shore without compromising on comfort, privacy, or design," PBD said.&nbsp;

"Every apartment was to feel considered, timeless, and highly functional."

[smartcode_project:default project_id=7395 project_image_fid=278195]

Inside, residences feature engineered timber flooring, stone kitchen benchtops and splashbacks, integrated Fisher &amp; Paykel appliances, ducted air conditioning, and large outdoor entertaining areas designed to take advantage of district and treetop views.

Residents will also have access to a rooftop barbecue and lounge area, alongside practical amenities including parcel lockers, EV charging capability, bicycle storage, a dog wash bay, and a basement car wash facility.

The majority of purchasers so far have been local owner-occupiers from Roseville, Lindfield, Chatswood, Killara, and the broader Upper North Shore, many of whom are transitioning from larger family homes.

"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.

"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."

[smartcode_project:default project_id=7395 project_image_fid=278204]

Juliet sits directly opposite Roseville Train Station and within walking distance of Roseville Village, while Chatswood's retail and dining precinct is only minutes away. The development is also surrounded by some of Sydney's most established schools, including Roseville College, Ravenswood, Pymble Ladies' College, and Knox Grammar, as well as nearby parklands and golf courses.

Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.

[smartcode_project_cta:default project_id=7395]

Juliet to sit quietly amid Roseville apartment boom

Sherpa Property Group has unveiled the third instalment of its Flourish series, securing full approval for the two-tower, $500 million Flourish Soleira development in Palm Beach.

<a href="https://www.apartments.com.au/new-apartments/flourish-soleira-1150-1154-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> will rise from a prominent site in the commercial heart of Palm Beach, the long-time home of Cash Converters and a range of local retailers.

The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.

[smartcode_project:default project_id=150017 project_image_fid=370959]

“We’re very committed to not only providing affordable residential offerings that are much needed in Palm Beach, but also delivering a vibrant new commercial heart that complements the extraordinary growth of the southern Gold Coast,” Sherpa Property Group founder Christie Leet said.

The development will sit under Sherpa's Flourish brand, which is aimed at providing a pathway into the beachside suburb for locals, first-home buyers and downsizers. In a move designed to assist first-home buyers entering the market, Sherpa has reserved all one and two-bedroom, one-bathroom apartments exclusively for eligible first-home buyers.

[smartcode_project:default project_id=150017 project_image_fid=370964]

“Our vision through Flourish is to create a vibrant retail and lifestyle focal point within the Palm Beach centre zone, delivering thriving communities underpinned by lifestyle-rich locations,” Leet said.

“So far, Flourish has been an incredible success, and we hope to carry this momentum as we progress the next two Flourish projects in Palm Beach.”

[smartcode_project:default project_id=150017 project_image_fid=371430]

Located across 1150-1164 Gold Coast Highway and 3 Sixth Avenue, the development will comprise two towers. The northern tower will deliver 154 apartments, while the southern tower will add a further 132 residences, helping address ongoing demand for new apartments in the tightly held coastal suburb.

Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.

The two towers will be connected by a skybridge, with residents gaining access to a rooftop recreation deck featuring a full-width swimming pool, hot and cold plunge pools, wellness spaces, a gymnasium, private dining facilities, massage treatment rooms, barbecue areas, a basketball court, golf simulator, indoor and outdoor dining spaces, sun lounges and extensive landscaping.

LPS Group is expected to start construction later this year.

Sherpa is already well advanced on construction of its debut Flourish project, Flourish Amargo, located just around the corner from Soleira. Meanwhile, Flourish Oasis, positioned opposite Amargo, recently commenced construction and has nearly sold out its collection of 47 apartments.

[smartcode_project_cta:default project_id=150017]

Sherpa unveils $500m mixed-use Palm Beach precinct, Flourish Soleira

Are mortgage holders set to get a reprieve from the RBA in 2026?

Big Four bank NAB believes so. They are now expecting the next move from the RBA to be a cut, rather than a hike, which they had pencilled in for August. They are unsure of the timing of the cut however, they note in their latest&nbsp;NAB Economics RBA Watch.

NAB Chief Economist, Dr Sally Auld, said recent data suggests the economy has lost momentum and the outlook for rates has shifted, noting that the broader economic backdrop has changed since earlier in the year.

“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.

"In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today,” she outlined.

Dr Auld said recent data pointed to softer momentum across the economy while acknowledging that at the same time, uncertainty remains a key feature of the outlook.

“Both Q1 GDP data and the NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle. That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation.”

Dr Auld said inflation risks and labour market outcomes would be important to watch.

“On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”

She said tighter financial conditions are expected to weigh on housing and activity.

“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth. In summary, we have greater conviction that the next move in rates is down, but less conviction on the timing.”

Mortgage relief? NAB forecasts RBA rate cut, not hike, after softer economic conditions

Budget

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The former Treasury secretary Martin Parkinson, in his first interview since leaving his job in December, says there isn't and never was a fiscal crisis.
He described the damagingly simple focus on budget surpluses and deficits as a fixation.
"Australia has fantastic opportunities in front of it, the shift of economic weight towards our region, the technological changes, if we grasp them," he told the Australian Financial Review's Laura Tingle.
"How do we go about grasping it? Well first of all, we've got to get our house in order. That means we've got to get our fiscal situation sorted out.
"It's not a crisis, it's never been a crisis. The last thing you'd want to do is start racing back to surplus in the next couple of years: the economy is growing below trend and will continue to do so."
He warned as long as Australia fails to get its budgetary house in order, it remains vulnerable to another shock like the global financial crisis.
"We could get hit at any point with another external shock. If we start from where our debt position is, it won't take very long for us to end up with debt levels that are dramatically higher than we've experienced in modern Australia," he said, adding Ireland's debt position "wasn't a lot different from Australia's" before the GFC.
"I don't envisage we will have to do that, but situations can change and change quickly, so that is why you want to err on the side of caution – get the place to a stronger fiscal position. You don't panic and try to do it in the next couple of years, but over a sustained period. At the moment we are looking at a decade of deficits."
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There is no budget crisis: Martin Parkinson

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NSW Treasurer Andrew Constance has confirmed just how much Sydney’s real estate boom is adding to the general fortunes of the state.
The 2014 budget papers show that "a resurgence in the property market has significantly lifted transfer duties in 2013-14". Transfer duty, including stamp duty, contributed $938 million of state budget revenue. This result was seen as a ‘windfall’ and measures to further stimulate the rate of new home construction were also announced in the budget.
The Treasurer also announced that the threshold for the first home buyer $15,000 grant will be boosted to $750,000 – an increase of $100,000. From 1 July 2014, the NSW government will boost the threshold of the First Home Buyers Grant for new homes by $100,000, which means entry level buyers can spend up to $750,000 on a new property.
However extending this to established homes appears to be totally off the agenda given the level of demand and the increased prices over the last six to 12 months. Still, eligibility for the grant will from 1 July 2014 be restricted only to citizens who are permanent Australian residents.
The NSW government has also pledged to freeing up land supply and speeding the delivery of some infrastructure to help boost construction activity.
Property Plays a Big Part in State’s Economy
However when looking at the government’s revenue papers in the budget, it is easy to see how important a robust property market is. But at the same time the extent of revenue from property and some related areas may be placing too great a burden on the sector.
Comments in the budget also underline how relatively volatile, even fragile this revenue stream can be, and so I think it’s worth looking in more detail at some key points. What we can see is how reliant the government is on this revenue and why any move to abolish stamp duty as part of a possible review of state-based tax reforms looks a long way off, if ever, although remaining mortgage duty is being abolished in 2015.
One of the most telling figures in the revenue statement is the comparison between GST revenue and transfer duty. GST revenue in 2014-15 is estimated at $6.094 billion rising to $6.9 billion in 2017-18. By comparison transfer duty revenue in 2014-15 is estimated at $6.095 billiob but is anticipated to rise more than GST to $7.256 billion in 2017-18. On top of which Land Tax will add $2.4 billion – $2.8 billion in the same time frame, while we should not forget the parking space levy set to reach $115 million by 2017-18 and so adding these figures we see that by 2017-18 direct property related revenue for the state will be some $10.24 billion.
The budget papers do point out that the 2013-14 results were expected to increase by 20.5% but in fact the increase looks set to be closer to 35%. Further the current budget anticipated an increased volume of sales at 6% but the final figure was much more at 18%. And residential property prices have increased by some 10% over the past budget period, however those figures are not expected to be maintained, but any slow down is expected to be gentler than previous cycles. And in the four years to 2017-18 the government is expecting a growth rate of 7% over the four years. In today’s market this looks a conservative estimate.
What Has Been Driving These Figures
The Office of State Revenue might be expected to be conservative in its views, however key facts driving the revenue in 2013-14 have, according to the Office, been: historically low interest rates, pent up demand, under supply, improved consumer confidence and of course the obvious big increase in house prices.
When looking at the impact of house prices, the Office points out that activity was initially driven by sales of less than $600,000 but now strong growth in sales of homes valued over $1.2 million is apparent, however the Offices argues that this trend might also mark a peak in the housing cycle.
A Keen Eye Out for Strong Construction Activity
Given the potential of $10 billion in annual revenue by 2017-18 the government is also keen to keep the recovery in new construction on a robust footing. In the December quarter 2013 private sector dwelling approvals were 44% higher than the decade average, as were dwelling commencements while completion were 14% above the decade average.
The hope is that these strong results will continue over the next 4 years, as this appears vital for the health of NSW. However the reality is that the sector and those home buyers paying stamp duty (and that’s the majority) are doing some heavy lifting when it comes to government revenues and any adjustment to the GST needs to address this reality.
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New South Wales reliant on the property market for revenue

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Three ACT budget changes to know: Stamp duty cut, land tax changes, over 60s home bonus

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The Queensland Newman government’s Great Start Grant, which gives first home buyers $15,000 for buying or building a new home, is finally finding some take-up.
As of 2 June, 6,251 applications had been approved and paid. This was well up from 5,343 in March 2014.
More than 3,000 had been granted for Brisbane, according to Treasurer Tim Nicholls' budget papers.
Eligible first home buyers of properties up to $500,000 pay no duty, with reduced rates available up to $550,000.
It had been a slow start as in March 2013 the Queensland government renamed its $15,000 first-home owner construction grant (FHOCG) the 'great start grant' as just 126 first-home buyers had taken advantage since September 2012 last year.
But despite a small increase in new construction activity, the budget papers showed overall dwelling investment declined in Queensland for the sixth consecutive year in 2012-13. It was mainly due to a sharp fall in alterations and additions, partly reflecting the completion of earlier disaster-related renovation activity, and also slower income growth.
With sustained low interest rates and an improved outlook for residential property prices, growth in new dwelling approvals did accelerate in 2013, particularly for apartments in inner-city Brisbane. As a result, overall dwelling investment is expected to increase in 2013-14.
"Increased activity by interstate and overseas investors is also expected, as recent large gains in Sydney house prices prompt investors to seek markets elsewhere," Nicholls noted.
Beyond 2014-15, as the RBA moves to a more neutral monetary policy setting, dwelling investment growth is expected to moderate.
The first home grant take-up accompanies Treasury forecasting a further increase in residential sales.
“The recovery in the housing market is expected to continue in fiscal 2015 supported by low interest rates and the continuation of the government’s Great Start Grant,” budget papers said.
Revenue from transfer duty is expected to grow by 9.6% in 2014-15, following strong growth of 28.2% in 2013-14 that was supported by a number of large commercial transactions.
The 2014-15 estimate also includes the duty expected from a large commercial transaction. Underlying growth was 14.8% in 2013-14 and 13.3% in 2014-15 once the impact of these large transactions is removed. 
Article continues on next page. Please click below.
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Annual growth in transfer duty averaged over 22.6% from 2000-01 to 2007-08, driven by a range of factors including Queensland’s relative affordability of housing, high population growth and the impact of the burgeoning mining sector. 
Transfer duty growth is expected to be modest relative to that experienced between 2000-01 and 2007-08. The transfer revenue is tipped to be $2.65 billion in the 2014/15 year, compared to $2.42 billion in 2013/14. There is a $2.73 billion estimate for 2015/16.
"While low interest rates and a solid economic outlook are expected to support recovery in the property market, this is expected to occur at a gradual pace, particularly in the non-residential sector," the budget papers said.
Average growth of around 6.6% per annum is expected over the period 2013-14 to 2017-18.
Every one percentage point increase in the volume of sales sees transfer duty collections increase by about $25 million.
Land tax revenue of $980 million this year is tipped to increase to $995 million in the 2014/15 year.
Transfer taxes represent 21% of state taxation income and land tax represents 8%. 
Revenue growth from transfer duty can vary significantly from year to year due to the volatility of both the residential and non-residential segments of the property market, while land tax has a relatively stable base and the effect of three year averaging of land values for assessments.
Resident individuals are generally liable for land tax if the total taxable value of the freehold land owned by that person as at 30 June is equal to or greater than $600,000.
Companies, trustees and absentees are liable for land tax if the total taxable value of the freehold land owned as at 30 June is equal to or greater than $350,000.
Land tax is estimated to grow by 1.5% to $995 million in 2014-15, the first year of annual growth since 2010-11.
The budget papers noted in recent years, land tax revenue has been adversely impacted by declining values, particularly for commercial and multi-unit residential land. 
Real Estate Institute of Queensland’s chief executive Anton Kardash said Queensland's real estate sector was starting to hit its straps" with more favourable market conditions.
The Queensland Treasurer, Tim Nicholls, has delivered a budget with a projected surplus of $188 million, the first surplus in a decade.
"The Queensland economy is now entering a period of transition as the investment phase of the large LNG projects nears completion and the production and export of LNG begins.
"Supported by sustained low interest rates, rising asset prices and a lower exchange rate, economic growth in 2013-14 is expected to be underpinned by household consumption growth, a recovery in dwelling investment and a significant contribution from net exports.
"However, as construction of the major LNG projects nears completion, business investment is expected to fall and see overall economic growth ease to 3% in 2013-14, compared with 3.6% in the previous year," the budget papers said. 
Employment growth picked up during the course of 2013-14, supported by some recovery in the labour-intensive household sector.
"This recovery is expected to support a further strengthening in employment growth in 2014-15 and beyond.
"This, in turn, is expected to drive a steady improvement in the unemployment rate, from 6% in 2013-14 to 51⁄2% in 2016-17."
Following the global economic slowdown, Queensland’s annual population grew by almost 95,000 in the year ending December quarter 2012.
Since then, it has fallen back to approximately 84,000 in the year ending September quarter 2013, reflecting lower inflows from both net overseas and net interstate migration.
The decline partially reflects a slowdown in the influx of workers as the resources investment boom peaked during 2013.
"Looking ahead, net overseas migration to Queensland is expected to pick up to be more in line with the State’s share of the national population.
"This increase will be supported by an expected recovery in overseas student arrivals as a result of the lower Australian dollar, as well as measures to simplify student visas.
"Net interstate migration is also expected to recover from current low levels, assisted by improved housing affordability in Queensland relative to New South Wales and Victoria," the budget papers said.
Overall, Queensland’s population growth is expected to be 13⁄4% in 2013-14, similar to that nationally. Growth in Queensland is then expected to strengthen to 2% per annum over the remainder of the forward estimates period, slightly stronger than the 13⁄4% per annum forecast national growth over the same period. 
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Interstate investors arrive as Queensland Great Start Grant finally finds a place

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Fearing that the property market will be used as a ‘rescue’ in the upcoming New South Wales state budget, the Real Estate Institute of New South Wales are warning the government to avoid the pressure of the federal budget to do so.
REINSW president Malcolm Gunning has urged Premier Mike Baird not to “follow the lead of previous governments who [have] used the property market to raise additional revenue” in a period where the market has shown recovery. He said that property shouldn’t be treated as a “cash cow” by the government.
“The property market is just showing signs of recovery and not all areas are enjoying growth. Property consumers and in particular first home buyers should not sit back and let this happen,” said Gunning.
He urged the state government not to increase land tax or stamp duty to plug budget holes.
In fact, some of his points closely match the <a href="/expert-insights/investing/the-reias-10-point-wishlist-for-the-federal-budget">10 point budget wish list submitted by the Real Estate Institute of Australia for the federal budget</a>.
Instead, a broadening of the GST tax base was suggested by Gunning.
“This should replace the revenue losses from the abolition of the discriminatory and inefficient state taxes,” he said.
<blockquote>
The REINSW urged the state government not to increase land tax or stamp duty to plug budget holes.
</blockquote>
“We have called on other state property institutes, associations and franchisors to voice their support for tax reform and we have already received backing,” he said.
“For too long the property market has been the state government’s cash cow and property consumers are now saying enough is enough.
New South Wales is expected to be $548 million over budget in transfer stamp duty collections for 2013/2014.
“Furthermore stamp duty rates have not been reviewed for 40 years. Bracket creep works in favour of government revenue and that is the reason it has not been reviewed. As a result of the failure to amend stamp duty rates, and the subsequent increase in property values over time, the average home is being taxed beyond that of which parliament initially intended,” he said.
“Change is long overdue and now is the time for Mr Baird to show he is a different sort of premier and remove these barriers to the property market and in particular provide support to first home buyers."
While Gunning suggested that pressure from the federal budget may encourage Baird to treat property in the manner of an additional revenue raiser, it may not indeed be the case that the federal budget has a significant effect on the property market’s strength.
Wakelin Property Advisory’s Richard Wakelin said that while the federal budget is a "horror budget", it’s unlikely to hinder the market.
“Although it may sound counter-intuitive, the sustainability of the property recovery will actually be helped by the response of consumers to the federal government’s austerity measures. It greatly reduces the likelihood of over-exuberance in the property market – which is already performing very strongly – and this subsequently transmitting into price inflation,” said Wakelin.
“It was the real threat of a resurgence in price inflation that was the greatest threat to the continuation of the property market’s recovery. Inflation had been stirring in recent months. Indeed it reached 2.9% in the March quarter, up from 2.2% six months earlier. If this trend persists it will inevitably force the Reserve Bank to raise the cash rate, possibly more than once.”
See over page for more 
 
<hr class="system-pagebreak">
Wakelin noted that it appears the RBA is confident in easing inflationary pressures, with wage restraint and the view that the property market is easing, and it has extended a period of stable interest rates.
“But observers of monetary policy will know that the Reserve Bank’s attitude can change in a relatively short time.  For instance, were the Australian Bureau of Statistics to report a spike in recorded inflation in July, when they next publish, then the pressure to raise interest rates could mount,” he said.
He noted that the treasurer’s efforts may have “done enough” to temper exuberant behaviour and shops and at auctions, but not to the extent of losing positive sentiment completely.
“So despite the broad criticism of the Treasurer’s first budget, ultimately, it is much less damaging to the economy – and the property market – that inflation is reined in by an austere fiscal policy rather than the Reserve Bank raising the cash rate – which is a very blunt instrument that often takes months to exert the desired effect,” he said.
Recently, <a href="/expert-insights/investing/how-does-the-budget-affect-property-investors">Josh Atherton answered the question ‘how will the budget affect property investors?’</a>, saying that there are some changes (or changes that didn’t appear) that many investors should be thankful for.
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Don’t treat property as a cash cow in state budget: REINSW

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GUEST OBSERVATION
No doubt this is one of the toughest federal government budgets we have seen in a long time. It would appear that the Liberal government have been true to their calling and were happy to make sacrifices across the economy in order to balance the books at some point in the future. 
But just how does this budget affect property investors?
Well it’s with relief that no changes have been made to capital gains tax, depreciation or negative gearing. Now, I'm not a fan of negative gearing all that often, the purpose of investing in anything is to achieve good growth and income for the future.
However, I do like the little incentive us property investors are given when it comes to the all to controversial depreciation. Absolutely I'm biased. I benefit from depreciation so I'm not going to argue it shouldn't be in place.
Ultimately, I think it is a great way for the everyday Australian without a business to take advantage of some form of taxation benefit that the big guys get all the time. Currently $6 billion dollars a year is lost in tax revenue due to negative gearing.
However there was one sector in the property industry that got dealt the wooden spoon, and that’s the NRAS scheme. <a href="/expert-insights/finance/is-this-the-end-of-nras-frozen-fifth-round-of-applications">Round 5 of the National Rental Affordability Scheme will be frozen</a> pending a review. In my opinion this is a good move as it was lining the pockets of savvy developers and good property marketers while the everyday investor lined up to buy overpriced property to simply get some money from the government. Now I know there’s a lot more to it than that, however the scheme has been flawed in many ways. 
The property industries push for ASIC regulation of the industry is seemingly unlikely in the near future as large budget cuts to the ASIC budget are handed down forcing large scale job cuts within the organisation. It doesn't look promising that the team at ASIC will want to take on more work with less staff and money. 
Home owners or investors are generally a pretty small deal when it comes to federal budgets. It’s often the state budgets that can make big differences including stamp duty concessions and rates plus the ever tinkering of first home buyers grants. 
Outside of investing, first home buyers taking advantage of the Labor government's First Home Savers Account (FHSA) <a href="/expert-insights/investing/first-home-saver-accounts-scrapped-what-now">will no longer be able to get tax breaks and co-contributions</a> as the scheme will be closed starting 1 July.
I think if anything, this budget should send a reminder to Australians of why investing in assets (not just property) is a necessity to gain financial freedom and retirement when you want it. With the pension age pushed out even further, serious holes in the future funding for pensioners, its clear we need to invest.
JOSH ATHERTON is managing director of <a href="https://www.linkedin.com/profile/view?id=123928559&amp;locale=en_US&amp;trk=tyah" target="_blank">Portfolio Property Investments</a>.
You can connect with Josh on <a href="https://www.linkedin.com/profile/view?id=123928559&amp;locale=en_US&amp;trk=tyah" target="_blank">LinkedIn</a>.
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jatherton-AZUXX8vQA7

How does the budget affect property investors?

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The first Coalition budget was always to going to be a fiasco – should the Coalition significantly reduce the budget deficit this would put the ALP in the untenable position of being seen as incapable of managing the nation’s finances given their past track record.
So when it goes to the Senate it will be rejected given the Coalition simply don’t have the numbers to get it through. In the meantime let’s have a look at what I perceive as a major housing affordability issue – actually it’s horrendous.
In a nutshell, the budget forecasts economic growth to be 2.5% in 2014-15 and moving to 3.5% in 2017-18. Unemployment to sit at 6.25% in 2014-15 then falling to 5.75% in 2017-18 and inflation sitting around 2.25% in 2014-15 rising to 2.5% in 2017-18. The big mover is debt which will reduce from $667 billion to $389 billion over the next 10 years.
All very good, but what are the Reserve Bank of Australia’s (RBA) cash rate projections as this is the sleeping elephant in the china shop.
Cue the Australian Bureau of Statistics (ABS) who released this week what many are saying is the real debt crisis in Australia and we should be very afraid about these statistics. Australian household debt at the end of 2013 came in at approximately $1.84 trillion which then calculates out at approximately 180% of disposable household income. Little wonder we are now starting to see household debt slowing – this should come as a major concern. Government debt is currently sitting at around 30% of GDP – Australian household debt today is sitting at around 120% of GDP.
Household debt is today at the highest level for 25 years and when you deduct 25 from 2014 you come up with 1989. Whilst the vast majority may not remember what happened in 1989, I clearly do as I <a href="/expert-insights/why-property-bubbles-are-like-the-loch-ness-monster">recently wrote about it</a>.
Now to put these statistics into greater context it needs to be remembered that back in 1989 the cash rate was sitting between 17.5% and 19% as against 2.5% today. The cash rate is crucial to the Australian housing industry given once the RBA starts to raise it there will be collateral damage along the way as “some” households will not be able to meet their repayments given our high cost of living. The areas that have been over heated in recent times are a natural example where previously they witnessed dramatic property value corrections.
<a href="https://www.rwm.com.au/files/2014/05/14-05-2014-10-15-49-AM.jpg"><img class="aligncenter size-full wp-image-8543" src="https://www.rwm.com.au/files/2014/05/14-05-2014-10-15-49-AM.jpg" alt="14-05-2014 10-15-49 AM" width="614" height="401"></a>
Source: Digital Finance Analytics
<a href="https://www.rwm.com.au/files/2014/05/14-05-2014-10-18-14-AM.jpg"><img class="aligncenter size-full wp-image-8544" src="https://www.rwm.com.au/files/2014/05/14-05-2014-10-18-14-AM.jpg" alt="14-05-2014 10-18-14 AM" width="689" height="387"></a>
Source: Digital Finance Analytics
So the ABS has released in its March 2014 data that Australia’s total housing stock is estimated currently at $5.1 trillion which equated to a rise of $105,348.0 million over that quarter – with the total number of residences calculated at 9.33 million.
The June housing numbers will make for compelling viewing given so many Australians see their homes as an appreciating ATM that can easily be borrowed against – which is fine so long as homes are in capital appreciation mode. In recent times we have seen areas posting annual capital appreciation of around 30% plus which signals dangerous debt loading.
<blockquote>
Until household debt starts showing signs of improvement the RBA could well be forced to lower the cash rate further to say 2.00%.
</blockquote>
Historically what we see next is the banks tightening their loan ratios which many would agree is long overdue given their recent ‘lend at all costs’ mandate to increase their respective market shares. We would all remember that as we entered the global financial crisis the first thing expected of the government is to guarantee bank deposits – to stop a run on the banks.
What is assured is that until household debt starts showing signs of improvement the RBA could well be forced to lower the cash rate further to say 2.00%.
When one takes a moment to seriously consider the economic ramifications we are presently observing in the housing industry, it makes a mockery of all the political bickering of what is currently being argued in Canberra.
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robertsimeon-hRNTwJyXkQ

Household debt is the sleeping elephant in the china shop

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The federal government should offer a firm commitment to tackle key issues on tax reform in order to strengthen venture capital in Australia, according to Australian Private Equity and Venture Capital Association chief executive Yasser El-Ansary.
Specifically, El-Ansary says reforms are needed to the Venture Capital Limited Partnership regime, which is currently producing outcomes for domestic investors inconsistent with those of non-resident investors.
Such changes were set to be introduced by the previous Labor government and <a href="https://fsi.gov.au/files/2014/04/AVCAL2.pdf" target="_blank" rel="nofollow">endorsed by the Board of Taxation.</a>
“As of about 12 months ago, or even longer than that, there was across the VC industry and understanding that the government at that time was committed to making these changes,” El-Ansary says.
“Then there was a decision in late 2013 to abandon this change.
“It’s a very obvious change that should be put in place as a matter of priority.
“It’s been talked about for so long now that arguments for and against have been made, the technical analysis of the shortcomings have been worked through, not just by those that stand to realise the benefits, but also by the government’s own independent tax review authority.
“There’s many in the industry frustrated by the amount of time it’s taking to convert discussion, debate and analysis into meaningful change.
“I think ultimately it would lead to an upswing of venture capital funding here in Australia.”
Further, El-Ansary says it’s a move that would have very little impact on the government’s budget.
“Our analysis of this issue confirms for us that there is not very significant cost to the government, instead it would be a net benefit for the government because it would generate greater level of activity but does not involve a significant cost to budget bottom line,’’ he says.
Another area El-Ansary would like to see tax reform is employee share schemes. Starfish Venture’s co-founder John Dyson agrees.
“I think improving the tax regime around employee share options, to me that’s a specific issue around tax reform that would be really beneficial," he says.
“Will it mean more competitive companies get funded? Maybe. But it gives the existing companies the best chance of success.”
Dyson criticised the government’s decision to axe the Innovation Investment Fund and is concerned the Entrepreneurship Infrastructure Program, which there is currently very little detail about, will be focused on offering entrepreneurs advice and mentorship.
A statement from Minister for Industry Ian Macfarlane says the new program will bring research and business together to develop and commercialise home-grown ideas and equip small to medium enterprises and the management and business skills to lead and change expansion.
“I think the Innovation Investment Fund program in theory, is a really good program, they had some challenges in the implementation of that program, but the Australian economy is much better off than not having that,’’ Dyson says.
“I see that as a huge disappointment that it’s been axed.
“My view is we have a weakness in the market in Australia when companies are going to raise between $1 million and $5 million.
“I don’t think entrepreneurs want $200,000 and want to have to call up advisers and ask that they think about their app.”
Those concerns are shared by AngelCube co-founder Adrian Stone.
“What we know is that the Commercialisation Australia grants program is gone,’’ he says.
“Replacing that with advice and guidance is a huge step in the wrong direction.
“What startups don’t need is more advice, more consultants, more people telling startups what to do.”
Macfarlane <a href="https://www.brw.com.au/p/investing/industry_minister_full_macfarlane_LGuW2U7RL2dtkJmZyaIW1M" target="_blank" rel="nofollow">told The Australian Financial Review</a> the startup community should hold their fire on the government’s innovation strategy until the results of national competitiveness and tax reviews are in.
The Industry Investment and Competiveness Agenda will examine the issues raised by venture capital and startup groups, which Macfarlane says is not expected to be completed until after July.
This article first appeared on <a href="https://www.startupsmart.com.au/" target="_blank" rel="nofollow">StartupSmart</a>.
Photo courtesy of <a href="https://lendingmemo.com/" target="_blank" rel="nofollow" data-rapid_p="22">Lendingmemo.com</a>.
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jake-cSmGT7VXVf

Investors demand tax reform in budget’s aftermath

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The federal government intends axing the Tools for Your Trade grants program for a loans scheme because apprentices misused the scheme instead spending the money on tattoos, fancy wheels on their cars, and partying.
The Industry Minister Ian Macfarlane says tax-exempt cash grants of up to $5,500 were paid to apprentices doing training in areas of established skills shortage but without receipt for tools.
"I think the whole skills and training area was just hanging out to be rebuilt or streamlined, and so we’ve stepped in and done that,” he told the Australian Financial Review Weekend.
 “We’ve got evidence that they were spending the money on tattoos and mag wheels for their cars, and birthday parties,” Mr Macfarlane said.
“Because the money was basically being thrown at them they just spent it on whatever they wanted to.
“You certainly didn’t have to provide a receipt for tools. I think the whole skills and training area was just hanging out to be rebuilt or streamlined, and so we’ve stepped in and done that.”
The Coalition will replace Tools for Your Trade with the Trade Support Loans program, which will provide interest-free loans of up to $20,000, similar to HECS for tertiary students, to support them through their training.
It will offer apprentices loans of up to $20,000 at concessional interest rates over a four-year apprenticeship. Apprentices will need to begin repaying their loan when their income exceeds a minimum annual threshold ($53,345 in 2014-15).
The loans will be available to apprentices doing a certificate III or IV qualification that leads to an occupation on the national skills needs list.
The budget papers say that apprentices who successfully complete their training will receive a 20% discount on the amount to be repaid.
The money will be capped at $8,000 in the first year of the apprenticeship, $6,000 in the second, $4,000 in the third and $2,000 in the fourth.
The loan program will cost $439 million over five years.
The budget is set to save almost $1 billion over the next four years by scrapping the Tools for Your Trade program from 1 July this year.
This program was originally introduced by the Howard government.
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Tools for Your Trade federal grants spent by apprentices on tattoos, mag wheels and parties

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Last week, Joe Hockey stood up in front of Parliament and on behalf of the Abbot administration, announced: ''The age of entitlement is over. It has to be replaced, not with the age of austerity, but with an age of opportunity!'' 
The former multi-millionaire banking and finance lawyer, husband to an investment banker, and owner of several premium land holdings (including a 200-hectare cattle farm in Malanda and mansions in Sydney), whose own ‘entitlements’ and that of his colleagues remain largely untouched, went on to address:
<ul>
<li>The single mother set to lose more than $,3000 per year;</li>
<li>The newly unemployed university graduate and retrenched worker, who must live with no income for six months (poverty) before claiming Newstart (forgone benefits of more than $7,000) – yet still have to service their rent or mortgage;</li>
<li>The low wage family with kids, who will lose $6,000 a year once all changes are factored in;</li>
<li>The hospitals and schools  who lose their projected funding (on the rationale that they are state responsibilities, forcing an increase to GST – a regressive tax);</li>
<li>The bottom one-fifth of earners who will lose around 5% of their disposable income, compared to the top one-fifth, who will lose only 0.3% (modelling undertaken by <a href="https://www.smh.com.au/federal-politics/political-news/reshaping-welfare-are-we-entering-an-age-of-inequality-20140516-38fc9" target="_blank">NATSEM</a> who point out the burden of this budget, overwhelmingly falls upon people in the most precarious position);</li>
</ul>
.. justified by telling Australian public, that they are not “to be alarmed”, because it’s all “in the national interest”.
“The National Interest”
The “national interest” is an interesting term to use for a budget that has set about plucking the feathers of the poor - the low and middle-income earners, the numerous small businesses, the main productive sectors of our economy - whist avoiding any direct action to the assessed <a href="https://www.prosper.org.au/2014/05/15/budgeting-for-capital-gains/" target="_blank">$484 billion total increase</a> over 12 months in unearned capital gains (more correctly termed “economic rent”) stored in land holdings, according to the ABS.
Or laying a finger on the licensed resource monopolies, the mineral wealth of which increased by $56 billion in 2012-13 alone.
Does this sound fair to you?
The country we want
“It’s about the sort of country that we want to be, in the years and decades ahead. It's about the value we impart,” continued Hockey, who has requested that all complaints be directed to the former government – adopting the age-old habit of passing the buck. Yet, warnings were given well in advance of this “budget emergency” and the sensible and equitable reforms needed were laid out in the Henry tax review – which they ignored.
The “sort of country we want to live in the years and decades ahead”, is an apt question to ask – albeit, it should be directed at our children.
After all, it’s our children who are set to inherit this land and it’s their future the government is shaping. More importantly, it’s not one the Liberal administration should be dictating on our behalf, following the usual stream of failed ‘promises’ we are familiar with on all sides of politics.
No doubt, job security and housing affordability would come top of the list – both are interdependent and serve our most basic needs.  
Without land, or the ability to use it, rent it, or buy it, we’re unable to do, or produce anything.  We are by definition “poor”.
The accumulation of all our ‘stuff’ is due to the natural resources land bestows.
It is therefore no coincidence that in both religious and ancient mythology, the first job of man was to tend the land. 
Our relationship with land is truly unique.
The quality of its location and care of its produce is foundational to ourmost basic human and consumer needs.
Destroy the land, or prevent ready and affordable access to it, and you destroy a population. 
The consequence is as black and white as that - “pay the rent or leave.”  
And it is no surprise, that this budget ignored the role of land in its economic modelling – they have been ignoring it for years. 
It’s not included in the Consumer Price Index for example - the tool the RBA use to measure inflation and reflect the cost of living, despite land prices and the size of the loans needed to service them having an uncanny consistency of exceeding wage growth through the course of each cycle – at least for that of the average <a href="https://www.news.com.au/finance/money/mortgages-rise-faster-than-wages/story-e6frfmci-1226921791556" target="_blank">household</a> and income earner.
And it’s easy to lay the blame of inequality or the reduction of it, on income distribution alone. Either that or confuse it with other items of ‘wealth’ – as is the case in Thomas Piketty’s book <a href="https://www.amazon.com/Capital-Twenty-First-Century-Thomas-Piketty/dp/067443000X" target="_blank">Capital in the 21st Century</a> (a subject I explored in part last <a href="https://catherinecashmore.com.au/wp/?p=506" target="_blank">week</a>).
These are items that are easy to hide in tax havens. You can’t do that with land.
But importantly, the politicians who delivered the budget, and the other “20%-ers”, will only feel a modest loss to their disposable income from the newly imposed ‘debt levy’. They will claw far more back in the increased value of their land holdings – particularly as we progress through the next phase of our cycle.
The Cause of Wealth inequality
This is the cause of wealth inequality – a lopsided economy, built on a $5.1 trillion housing market (over $4.1 trillion of which is land.)
<img src="/images/2014/05/19/cashmore-may-19-one.jpg" alt=""> 
<a href="https://www.macrobusiness.com.au/2014/03/deflating-australias-land-bubble/" target="_blank">Source</a>: MacroBusiness
It’s a subject overwhelmingly ignored, and yet shapes every other area of housing policy – due in part to the vested interests of <a href="https://www.smh.com.au/comment/even-i-am-shocked-by-icac-revelations-20140516-zreh2" target="_blank">wealthy property tycoons</a> who lobby our politicians to maintain the status quo. As well as politicians who don’t want to see their investments affected in anyway.
The corruption of economics, however, is not unique to Australia. It began soon after Henry George, in 1879, took the world by storm, when he successfully communicated the root and leading indicator of the massive boom/bust cycles (although he was not the first to do so) – that being land.
His farsighted solution, whilst understanding the importance of private ownership, clearly demonstrated that recessions/depressions on a large scale, could be avoided (not by banking reform alone). But if the natural revenue from the economic rent was recycled, to provide and fund community facilities – along with the other government services we require.
This is because it removes excessive and unwanted speculation from the market, assists home buyers, utilises land effectively, improves productivity with lower land prices and can assist in increasing wages, which would help the workers – not the land hoarders.
He influenced the likes of;
David Lloyd George in England, Leo Tolstoy, Billy Hughes in Australia, Rolland O'Regan in New Zealand, Chaim Weizmann in Israel, Francisco Madero in Mexico, and many others including, Winston Churchill, Milton Friedman and Albert Einstein (to name but a very few). He quite simply took the political world by storm. 
The people it didn’t impress however, were the large landowners and financiers, the political lobbyists, who set about a on a well-constructed and amply funded mission to change the course of economic education to one that moved away from the classical models which recognised the role of land and were advocating George’s policies.
“The Corruption of Economics”
Mason Gaffney and Fred Harrison chart the full story in their book <a href="https://www.propertyobserver.com.au/https://www.amazon.com/The-Corruption-Economics-Georgist-Paradigm/dp/0856832448" target="_blank">The Corruption of Economics.</a>
They show how the three elements of production—land (and the resources it bestows), labour, and capital (that of the ‘industrial’ kind) were gradually reduced to two. Labour and capital – land being “lumped in” with the latter.
Capital was now no longer ‘man made’ the result of hard work and genuine innovation. 
Instead, it included the stuff of nature – the very elements we need to live – allowing the increasing gains from any natural appreciation of land value (the expected result of every collective improvement we make to society) to be pocketed, rather than shared through a proportional system of land rent on the unimproved value alone.
It simply implied that the home-owner pay directly for the facilities they use – the amenities that give their land its value – which in the main, removes the need for other taxes which are easy to avoid – like income tax for example. 
That sounds fair doesn’t it?
All taxation is at the expense of Rent
As the classical economists David Ricardo and Adam Smith proved, all taxation is at the expense of Rrent.
<img src="/images/2014/05/19/cashmore-may-19-two.jpg" alt="">
<a href="https://www.macrobusiness.com.au/2014/03/deflating-australias-land-bubble/">Source</a>: MacroBusiness
In other words, any tax withholdings or exemptions given to land holders, result in an increase of “economic rent” available to be capitalised (at the current interest rate) into the price. 
This raises the cost of land – yet does little to address the needs of our children, who must take on an every greater proportion of private debt to join in.
Consequences
The consequence results in what the current budget suggests. Collecting taxes to offset the items we require from other areas, wages and productivity, the burden of which falls overwhelmingly on the poor  yet advantages those at the top.
Is this fair?
Well this is what the current (and previous) administrations have been enforcing and advocating for years. 
Promoted widely by our nice ‘balanced’ property commentators who teach how to get rich on capital gains (as if it’s hard), without stressing the consequence and burden to society and the economy as a whole.
Think about that when you’re browsing the property investment isle in your local bookshop.
Think about it.
Who benefits?
The progress of genuine innovation
Thankfully with the birth of genuine innovation – the internet - we finally have the beginnings of a global revolt against mainstream economic <a href="https://www.theguardian.com/education/2014/may/04/economics-students-overhaul-subject-teaching" title="More from the Guardian on Teaching">teachings</a> which cannot identify boom/bust cycles and crashes, because they refuse to see land.
Not to mention their completely false understanding of money creation and debt and its role in banking - highlighted consistently by Steve Keen who is about to head the first “progressive” department of economic teaching at <a href="https://www.debtdeflation.com/blogs/2014/05/08/for-a-pluralist-education-come-to-kingston/" target="_blank">Kingston University in London</a>. Our loss.
Importantly, economic students are starting to recognise their degrees are hardly worth the paper they’re written on (something else to ponder when you read the many “market updates” from our mainstream economists).
Change
Changing the system is not easy when we have built a society dependent on housing wealth to fund retirement.
It requires a slow transition (such as that set out in the Henry Tax review) to gradually phase out tax subsidies such as negative gearing – offset by the supply reforms Leith Van Onselen, <a href="https://www.performanceurbanplanning.org/" target="_blank">Hugh Pavletich</a>, Senator <a href="https://www.macrobusiness.com.au/2014/04/bob-day-slams-australias-housing-policy-failure/" target="_blank">Bob Day</a> and many others have been advocating for years.
But if you want a “fair go” country, one that avoids volatile boom/bust cycles and instead of promoting wealth inequality provides economic prosperity along with the best we can leave to our children, then change we must.
And it starts with us. 
Feature picture courtesy of Twitter.
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