Northern Rivers Homeless Forum, Thursday 21 July 2016 at Lennox Head

Australian Federal Election 2016: right-wing propaganda running wild

This scare campaign is looking suspiciously as though it is being made up as the proponents go along.

The Sydney Morning Herald, 23 May 2016:

Research intended for use in a bid to discredit Labor's negative gearing campaign was commissioned after a meeting between Scott Morrison and a close friend and senior figure in Australia's property industry.

But the draft report contains a series of factual errors and makes bold claims of a "resale price cliff" and "social dysfunction" that have alarmed some in the real estate industry to whom it has been circulated.

An email obtained by Fairfax Media shows Greg Paramor, the managing director of property company Folkestone, discussed the need for a study critiqueing Labor's policy with Brian Haratsis, the executive chairman of advisory firm MacroPlan Dimasi. Mr Paramor, who is a friend of Mr Morrison and former president of the Australian Property Council, made the request after his encounter with the Treasurer.

"Greg recently had the opportunity to meet with The Hon. Scott Morrison to discuss negative gearing," the email notes. "As a result of that meeting, Greg agreed to provide a report to the Treasurer – he asked Brian Haratsis to undertake a study on the impact of the proposed negative gearing changes."

The email, sent from an unnamed person inside Mr Paramor's company, was sent to senior industry figures last week.

It also asks for feedback as "the Treasurer is keen to get the report next week".

Entitled "Short Memory: Negative Gearing and Capital Gains Tax: Foundations of the New Australian Housing Model," the attached draft report is also presented with an alternative title: "Shortened Memory".

It claims Labor's policy would remove 205,000 dwellings from the rental housing stock over a decade, adding to housing stress. Asked why removing dwellings from the rental stock would add to housing stress when the dwellings would still be available for use, Mr Haratsis said the phrase was meant to refer to low-income rental dwellings.

Illustration: Ron Tandberg

The draft says Labor's policy would both make housing less affordable and create a "resale price cliff" as large numbers of apartments were sold at a loss. Mr Haratsis explained the apparent contradiction by saying the market was bifurcated and that different parts of it would react differently….

The Treasurer's office denied he had asked for a report to be prepared or that he or his office had received copies.

The report also says Australian governments would need to stump up an extra $3.3 billion per year for social housing and rent assistance should Labor's policy became law, more than the $3.2 billion per year it would raise.

The total economic cost of Labor's policy would be $5 billion per year, a reference Mr Haratsis said has since been removed from the document after acknowledging that it was arrived at by adding up payments without subtracting receipts.

"I am writing this as we go, and there are a number of references that you are looking at that won't be there in the final," he said. "I want to go back and recalculate the numbers."

Prepared in haste with what appears to have been a speech recognition program, the draft at one point refers to Labor's promise to "grandfather" the entitlements of existing investors as a promise to create "ground furthered" properties.

The leaking of the report potentially blunts another avenue of attack on Labor's plan to restrict negative gearing to new properties only and halve the capital gains tax discount to 25 per cent, which has been the subject of a fierce government scare campaign.

Mr Haratsis insisted it was his decision to initiate the report after his meeting with Mr Paramor, that he would fund the work himself and that it was planned for release next week - at which point "I could maybe give it to the Treasurer".

The report critiques organisations such as the Grattan Institute, which engages in "Robin Hood economics" and chooses to "ostracise high income individuals" instead of focusing on tax efficiency.

Short Memory Alternative Title – Shortened Memory by The Guardian

Former Australian Treasurer Joe Hockey's 'gift' to all property owners across the nation

Australian Financial Review, 13 August 2015

The Australian, 19 May 2016:

The current mess was created when former treasurer Joe Hockey caved into pressures to curb Chinese investment in Australian residential property in 2015. In the process, the treasurer was convinced by the Australian Taxation Office to widen the net to cover local residents.

Parliament was being bombarded with tax legislation at the time and the Canberra politicians did not pick up what the ATO had done.

So, fasten your seats belts for a horror commentary.

I was alerted to the position by one of Australia’s top commercial/tax barristers, John Fickling of WA. I am using many of Fickling’s words in describing what is about to happen.

If you purchase a property worth $2m or more on or after July 1 2016, you will be required to withhold 10 per cent of the purchase price and remit it to the ATO UNLESS the vendor is able to provide a special purpose tax resident’s “clearance certificate” from the ATO. It does not matter if the vendors were born in Australia and have lived all their lives in Australia — unless they have that clearance certificate, they are classed as a foreigner and the buyer must send 10 per cent of the purchase price to the tax office.

In case you think I’m kidding, read the ATO’s exact words: “A vendor who sells the following assets is also a relevant foreign resident, even if they are an Australian resident for other tax purposes.

The definition of property is very wide and includes leaseholds but does not include stock exchange investments. A purchaser who does not receive a “clearance certificate” from the vendor and does not send 10 per cent of the purchase price off to the ATO will still be liable to pay that 10 per cent to the ATO plus, almost certainly, will have to pay severe additional penalties and interest. The economics of buying the property will be severely damaged.

Fickling says all real estate agents selling $2m plus properties should be considering how this new regime will impact on their business and what will be the contractual consequences under the different scenarios that could play out.

For example, banks and other financiers may be affected where their secured debt exceeds 90 per cent of the value of the selling price. In a situation where the owner is being forced to sell, the banks will be better to take possession and sell themselves rather than being caught in the “tax clearance” delays.

To be fair, in the vast majority of cases local resident vendors will have no problem obtaining a “clearance certificate”.

However, for locals it might increase their risk of a tax audit and there are clear hazards for property sellers who:

Have not filed tax returns for many years;

Have filed tax returns, which would indicate they could not afford such a property;

Are selling their residential house at the same time as their neighbours to a single developer, which may give rise to a profit making scheme (such that the principal residence capital gains tax exemption may not apply to the value uplift generated by selling the properties together); or

Where the ATO has gathered information that indicates the vendor is in the business of developing property, which means that the principal residence capital gains tax exemption may not apply.

Fickling says in extreme cases action could potentially be taken by the ATO prior to the sale, to freeze the transaction.

Those who see any of the above as dangers might consider selling in a hurry (before July 1), so there might be some property bargains for buyers in coming weeks.

It’s also important to note that the $2m is “hard-coded” into the legislation, so, as property prices increase, more vendors will be caught. Over time, the ATO may shift their audit target identification processes to $2m-plus property vendors and away from other areas.

Additionally, if the vendor has a tax debt, the application for a “clearance certificate” may in some circumstances involve the ATO seeking to recover some or all of that tax debt from the purchaser by way of a garnishee notice.

At this point, it is worth noting that we are giving the Australian Taxation Office another weapon to recover tax legitimately owed and that is a good thing for society.

The great danger is the complexity created and that currently the tax office is badly run and is operating outside the law in key small business areas. It knows it can’t be challenged because of the cost of court cases.

Meanwhile, the legislation is yet another blow being aimed at Chinese and other Asian investors in property. These blows have come separately and each one has had reasonable motivations. But, in combination, they could inflict severe damage to the apartment and other parts of the residential property market.

Chinese and other Asian investors face a Hobson’s choice. They will not enjoy getting a tax clearance but nor will they appreciate the buyer of their property taking 10 per cent off the purchase price.

And if the tax office treats locals illegally, what might they do to foreigners?

Australia desperately needs greater independent supervision of the tax office.

In case readers imagine that high property prices are confined to large metropolitan areas a quick look at realestate.com.au will dispel that view – within the NSW Northern Rivers there are currently 7 properties in Yamba and environs with a sale value of $2 million and over, 4 in the Grafton area, 6 in Kyogle, 9 in the Lismore region, 35 in the Ballina district, 78 in the Byron Bay greater region and 46 in the Tweed local government area.

Federal Election 2016: Malcolm Bligh Turnbull and housing affordability

On 4 May 2016 this on-air exchange occurred between ABC 774 Radio presenter Jon Faine and Prime Minister Malcolm Bligh Turnbull:

JON FAINE: " Yeh but my question was specifically about the intergenerational aspects of it. It’s  [negative gearing] creating conflict with effectively the kids of your and my generation, who can't get into the market and they're saying oh for goodness sake you baby boomers, you just want everything and you're locking us out.”

MALCOLM TURNBULL: "Are your kids locked out of the housing market?"

JON FAINE: "Yes"

MALCOLM TRUNBULL: "Well you should shell out for them, you should support them, a wealthy man like you"

JON FAINE: "That's what they say" [laughing]

MALCOLM TURNBULL: "Exactly. There you go. See you've got the solution in your own hands”

JON FAINE: “That’s hardly national policy”

MALCOLM TURNBULL: You can provide a bit of inter-generational equity in the Faine family"

There is a reason why Turnbull can be so casually dismissive of concerns about home ownership and housing affordability and, it can be found in his privileged background.

Domain.com.au:

Title records show that Mr Turnbull was a law student at Sydney University when he spent $17,000 on a worker’s semi on Newtown’s Wells Street. At the time he was far from a struggling student kicking around the backstreets of the inner west. He was already a Point Piper resident, with corporate records showing he lived in the Longworth Avenue apartment owned by his late father, hotel broker Bruce Turnbull.

That Newtown investment property was likely Mr Turnbull’s first windfall from the Sydney property market. He sold it in 1981 for $68,000, quadrupling in value over the three years.

The year after his Newtown purchase title records show the Rhodes scholar (or “student” according to the property transfer) bought a terrace on Redfern’s Great

Long before Malcolm Turnbull ascended to the highest political office in the country and took the keys to his official Sydney residence Kirribilli House, he had already amassed a fortune – much of it from Sydney’s property market.

The 29th prime minister has come a long way from his 1978 first-home purchase in Newtown, to his $50 million-plus trophy waterfront home in Point Piper.

Privately educated Malcolm Turnbull was 23 or 24 years old, son of a successful property speculator and a recent university graduate, when he purchased his first property in 1978.

By the end of 1982 this now married practicing lawyer was a member of the Liberal Party, had inherited an est. $2 million in assets, become a grazier and acquired a second investment property – all the while residing in a Point Piper flat owned by his father.

Five years later he was an investment banker at Whitlam Turnbull & Co. Ltd.

By the time he entered parliament as the Member for Wentworth in 2004 he was reputedly worth $133 million.

Turnbull’s fortune continues to grow.

This is a man who has never known Struggle Street. 

Something you may have missed in this month's news cycle

Before he entered federal parliament in 2004 Australian Prime Minister Malcolm Bligh Turnbull was Chairman and Managing Director of Goldman Sachs Australia from 1997 to 2001 and a Partner in Goldman Sachs and Co from 1998 to 2001.

In 2009 it was reported that Goldman Sachs made a confidential settlement on his behalf in the matter of the HIH collapse.

To this day he still invests with Goldman Sachs and, this month that investment bank paid US$5.06 billion in civil penalties for serious misconduct which contributed to the Global Financial Crisis (GFC) of 2008. 

Department of Justice

Office of Public Affairs

---

FOR IMMEDIATE RELEASE

Monday, April 11, 2016

Goldman Sachs Agrees to Pay More than $5 Billion in Connection with Its Sale of Residential Mortgage Backed Securities

The Justice Department, along with federal and state partners, announced today a $5.06 billion settlement with Goldman Sachs related to Goldman’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2005 and 2007.  The resolution announced today requires Goldman to pay $2.385 billion in a civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and also requires the bank to provide $1.8 billion in other relief, including relief to underwater homeowners, distressed borrowers and affected communities, in the form of loan forgiveness and financing for affordable housing.  Goldman will also pay $875 million to resolve claims by other federal entities and state claims.  Investors, including federally-insured financial institutions, suffered billions of dollars in losses from investing in RMBS issued and underwritten by Goldman between 2005 and 2007. 

“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart F. Delery.  “This $5 billion settlement includes a $1.8 billion commitment to help repair the damage to homeowners and communities that Goldman acknowledges resulted from its conduct, and it makes clear that no institution may inflict this type of harm on investors and the American public without serious consequences.” 

“Today’s settlement is another example of the department’s resolve to hold accountable those whose illegal conduct resulted in the financial crisis of 2008,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Viewed in conjunction with the previous multibillion-dollar recoveries that the department has obtained for similar conduct, this settlement demonstrates the pervasiveness of the banking industry’s fraudulent practices in selling RMBS, and the power of the Financial Institutions Reform, Recovery and Enforcement Act as a tool for combatting this type of wrongdoing.”

“Today’s settlement is yet another acknowledgment by one of our leading financial institutions that it did not live up to the representations it made to investors about the products it was selling,” said U.S. Attorney Benjamin B. Wagner of the Eastern District of California.  “Goldman’s conduct in exploiting the RMBS market contributed to an international financial crisis that people across the country, including many in the Eastern District of California, continue to struggle to recover from.  I am gratified that this office has developed investigations, first against JPMorgan Chase and now against Goldman Sachs, that have led to significant civil settlements that hold bad actors in this market accountable.  The results obtained by this office and other members of the RMBS Working Group continue to send a message to Wall Street that we remain committed to pursuing those responsible for the financial crisis.”

The $2.385 billion civil monetary penalty resolves claims under FIRREA, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud.  The settlement expressly preserves the government’s ability to bring criminal charges against Goldman, and does not release any individuals from potential criminal or civil liability.  In addition, as part of the settlement, Goldman agreed to fully cooperate with any ongoing investigations related to the conduct covered by the agreement.

Of the $875 million Goldman has agreed to pay to settle claims by various other federal and state entities: Goldman will pay $575 million to settle claims by the National Credit Union Administration, $37.5 million to settle claims by the Federal Home Loan Bank of Des Moines as successor to the Federal Home Loan Bank of Seattle, $37.5 million to settle claims by the Federal Home Loan Bank of Chicago, $190 million to settle claims by the state of New York, $25 million to settle claims by the state of Illinois and $10 million to settle claims by the state of California.

Goldman will pay out the remaining $1.8 billion in the form of relief to aid consumers harmed by its unlawful conduct.  $1.52 billion of that relief will be paid out pursuant to an agreement with the United States that Goldman will provide loan modifications, including loan forgiveness and forbearance, to distressed and underwater homeowners throughout the country, as well as financing for affordable rental and for-sale housing throughout the country.  This agreement represents the largest commitment in any RMBS agreement to provide financing for affordable housing—a crucial need following the turmoil of the financial crisis.  $280 million will be paid out by Goldman pursuant to an agreement separately negotiated with the state of New York.

The settlement includes a statement of facts to which Goldman has agreed.  That statement of facts describes how Goldman made false and misleading representations to prospective investors about the characteristics of the loans it securitized and the ways in which Goldman would protect investors in its RMBS from harm (the quotes in the following paragraphs are from that agreed-upon statement of facts, unless otherwise noted):

• Goldman told investors in offering documents that “[l]oans in the securitized pools were originated generally in accordance with the loan originator’s underwriting guidelines,” other than possible situations where “when the originator identified ‘compensating factors’ at the time of origination.”  But Goldman has today acknowledged that, “Goldman received information indicating that, for certain loan pools, significant percentages of the loans reviewed did not conform to the representations made to investors about the pools of loans to be securitized.”
• Specifically, Goldman has now acknowledged that, even when the results of its due diligence on samples of loans from those pools “indicated that the unsampled portions of the pools likely contained additional loans with credit exceptions, Goldman typically did not . . . identify and eliminate any additional loans with credit exceptions.”  Goldman has acknowledged that it “failed to do this even when the samples included significant numbers of loans with credit exceptions.” 
• Goldman’s Mortgage Capital Committee, which included senior mortgage department personnel and employees from Goldman’s credit and legal departments, was required to approve every RMBS issued by Goldman.  Goldman has now acknowledged that “[t]he Mortgage Capital Committee typically received . . . summaries of Goldman’s due diligence results for certain of the loan pools backing the securitization,” but that “[d]espite the high numbers of loans that Goldman had dropped from the loan pools, the Mortgage Capital Committee approved every RMBS that was presented to it between December 2005 and 2007.”  As one example, in early 2007, Goldman approved and issued a subprime RMBS backed by loans originated by New Century Mortgage Corporation, after Goldman’s due diligence process found that one of the loan pools to be securitized included loans originated with “[e]xtremely aggressive underwriting,” and where Goldman dropped 25 percent of the loans from the due diligence sample on that pool without reviewing the unsampled 70 percent of the pool to determine whether those loans had similar problems.
• Goldman has acknowledged that, for one August 2006 RMBS, the due diligence results for some of the loan pools resulted in an “unusually high” percentage of loans with credit and compliance defects.  The Mortgage Capital Committee was presented with a summary of these results and asked “How do we know that we caught everything?”  One transaction manager responded “we don’t.”  Another transaction manager responded, “Depends on what you mean by everything?  Because of the limited sampling . . . we don’t catch everything . . .”  Goldman has now acknowledged that the Mortgage Capital Committee approved this RMBS for securitization without requiring any further due diligence.   
• Goldman made detailed representations to investors about its “counterparty qualification process” for vetting loan originators, and told investors and one rating agency that Goldman would engage in ongoing monitoring of loan sellers.  Goldman has now acknowledged, however, that it “received certain negative information regarding the originators’ business practices” and that much of this information was not disclosed to investors. 
• For example, Goldman has now acknowledged that in late 2006 it conducted an internal analysis of the underwriting guidelines of Fremont Investment & Loan (an originator), which found many of Fremont’s guidelines to be “off market” or “at the aggressive end of market standards.”  Instead of disclosing its view of Fremont’s underwriting, Goldman has acknowledged that it “[u]ndertook a significant marketing effort” to tell investors about what Goldman called Fremont’s “commitment to loan quality over volume” and “significant enhancements to Fremont underwriting guidelines.”  Fremont was shut down by federal regulators within several months of these statements.
• In another example, Goldman was aware in early-mid 2006 of certain issues with Countrywide Financial Corporation’s origination process, including a pattern of non-responsiveness and inability to provide sufficient staff to handle the numerous loan pools Countrywide was selling.  In April 2006, while Goldman was preparing an RMBS backed by Countrywide loans for securitization, a Goldman mortgage department manager circulated a “very bullish” equity research report that recommended the purchase of Countrywide stock.  Goldman’s head of due diligence, who had just overseen the due diligence on six Countrywide pools, responded “If they only knew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .”
• Meanwhile, as Goldman has acknowledged in this statement of facts, “[Around the end of 2006], Goldman employees observed signs of uncertainty in the residential mortgage market [and] by March 2007, Goldman had largely halted new purchases of subprime loan pools.”  

Assistant U.S. Attorneys Colleen Kennedy and Kelli Taylor of the Eastern District of California investigated Goldman’s conduct in connection with RMBS, with the support of the Federal Housing Finance Agency’s Office of the Inspector General (FHFA-OIG) and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

“Goldman Sachs had a fiduciary responsibility to investors, which they blatantly side stepped,” said Deputy Inspector General for Investigation Rene Febles of FHFA-OIG.  “They knowingly put investors at risk and in so doing contributed significantly to the financial crisis.  The losses caused by this irresponsible behavior deeply affected not only financial institutions but also taxpayers and one can only hope that Goldman Sachs has learned the difference between risk and deceit.  Two Federal Home Loan Banks suffered significant losses so we are pleased to see both entities receive a portion of this settlement.  We will continue to work with our law enforcement partners to hold those accountable who have engaged in misconduct.”

“Goldman took $10 billion in TARP bailout funds knowing that it had fraudulently misrepresented to investors the quality of residential mortgages bundled into mortgage backed securities,” said Special Inspector General Christy Goldsmith Romero for TARP.  “Many of these toxic securities were traded in a taxpayer funded bailout program that was designed to unlock frozen credit markets during the crisis.  While crisis investigations take time, SIGTARP is committed to working with our law enforcement partners to protect taxpayers and bring accountability and justice.”

The settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered tens of billions of dollars on behalf of American consumers and investors for claims against large financial institutions arising from misconduct related to the financial crisis.  The RMBS Working Group brings together attorneys, investigators, analysts and staff from multiple state and federal agencies, including the Department of Justice, U.S. Attorneys’ Offices, the FBI, the U.S. Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, SIGTARP, the Federal Reserve Board’s OIG, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and multiple state Attorneys General offices around the country.  The RMBS Working Group is led by Director Joshua Wilkenfeld and five co-chairs: Principal Deputy Assistant Attorney General Mizer, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Director Andrew Ceresney of the SEC’s Division of Enforcement, U.S. Attorney John Walsh of the District of Colorado and New York Attorney General Eric Schneiderman.  This settlement is the fifth multibillion-dollar RMBS settlement announced by the working group.

Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at www.StopFraud.gov. 

Master Builders Association rather predictably bites back at Labor's negative gearing policy

 Labor's policy.....

ABC News, 13 February 2016:

Federal Opposition Leader Bill Shorten has unveiled plans to change negative gearing rules for property purchases, in a move touted to "put the great Australian dream back within reach for the middle and working class".

Key points:

* Labor government would restrict negative gearing to "newly constructed homes"

* Capital gains tax discount reduced from 50 per cent to 25 per cent

* Both measures would come into force from July 2017

* All existing investments under the scheme would be fully "grandfathered" and protected against changes

With just months to go until a federal election is called, Mr Shorten used his speech to the NSW ALP conference to rally the party faithful for the battle ahead.

He said if Labor wins the election, from July next year negative gearing would only be available on newly-constructed homes.

The changes under a Shorten government would not affect the tax arrangements for investment properties purchased before July 2017.

Under costings released from the Parliamentary Budget Office, the measures could save the budget $32.1 billion over 10 years once they come into force.

Builders' snark.....

Medianet Release 13 February 2016:

“Labor’s policy announcement on negative gearing has squarely driven a marker not only in the housing debate but also in the broader debate about tax reform and the values we hold as a community,” Wilhelm Harnisch, CEO of Master Builders Australia said.

“Master Builders Australia is committed to tackling the underlying challenges that impact on housing affordability so that home ownership and the housing rental markets remain a cornerstone of Australia’s way of life. The ALP’S new policy position will be controversial by moving away from a long held bipartisan approach since the 1990s after the failed negative gearing policy experiment,” he said. 

“The quarantining of negative gearing to newly constructed residential buildings has certain attractions for the residential building sector but has a sting in the tail by reducing the Capital Gains Tax discount from 50% to 25%,” Wilhelm Harnisch said.

“Our concern is that Labor’s policy is a populist response to those who demonise housing and negative gearing as primary cause of our fiscal and social problems. Investing in new private rental housing is not evil,” he said.

“The private rental market is a critical supplement to the public and social housing rental sectors.

The private rental market also provides a valuable role in supplementing the retirement income strategy for mum and dads on low and middle incomes. Housing is an asset class just as shares and just as shares, interest deductibility in investment housing should remain as a tax feature,” he said.

“The ALP policy leaves important questions unanswered including how to overcome structural impediments to increasing housing supply which is the only effective way to truly tackle housing affordability for both homeowners and renters ” Wilhelm Harnisch said.

“Master Builders has called for the Federal Government to work with State and Territory Governments to use federal national competition policy payments for individually targeted and permanent structural reforms that can remove the current unnecessary blockages that inflate the cost of housing,” he said.

“Master Builders will continue its positive engagement with the ALP on this important area of public policy,” Wilhelm Harnisch said.

“But what we are looking for from both major parties in the lead up to the Federal Election are policies that add to economic growth, create jobs and enhances the positive role that housing can play and that will at the same time improve the ability of mums and dads make their contribution by providing rental housing and at the same time look after their own retirement strategies,” Wilhelm Harnisch said. 

Who negatively gears investment properties.....

The Sydney Morning Herald, 15 February 2015:

Exclusive analysis of the costs and take-up of negative gearing, the 50 per cent capital gains tax discount, and superannuation tax concessions, shows the combined revenue loss - or tax expenditure - will amount to some $50 billion annually within three years, although under 7 per cent of that benefit will flow to the under 30s.

The data-crunching has been undertaken by the National Centre for Social and Economic Modelling using its own database of Australian households as well as the latest information released by the Australian Tax Office.

It was commissioned by the progressive think tank, The Australia Institute.

Executive Director Ben Oquist said the findings showed conclusively that keeping the current concession regime in place is neither in the national interest nor fair.

"In total, these concessions are worth more than $37 billion, yet the young receive only $2.4 billion of their value," he said.

"The capital gains tax discount and negative gearing are particularly unfair for the young, with the under 30s taking approximately 1 per cent of the benefit of tax breaks worth $7.7 billion a year and climbing.

The NATSEM research also shows that 73 per cent of the benefits of the capital gains tax discount, flows to the top 10 per cent of income earners.

All up, it says the under 30s share of the three concessions combined is just 6.4 per cent, whereas those over 50 years of age receive 53 per cent of the benefits. That works out to $2.4 billion versus $19 billion for those over 50 - many of whom are already well-off......

ABC The Drum, 24 September 2014:

When I crunched the numbers, over 60,000 people with investment properties whose taxable income was $80,000 or less had total incomes above that $80,000 threshold ...

The very reason that many housing investors fall below the $80,000 threshold is because they have used negative gearing to slash their tax bill...

Graphs found at  

http://www.abc.net.au/news/2014-09-24/janda-the-myth-of-mum-and-dad-negative-gearers/5766724

NSW Rental Tenancy Law Review community consultation closes 26 January 2016

NSW Fair Trading website:

The NSW Government is reviewing the Residential Tenancies Act 2010 (the Act). The Act establishes a comprehensive set of rights and obligations for:   
  *landlords 

 * tenants

 * social housing providers

 * real estate agents who act for landlords.    
     

As part of this review, you are now invited to view a Discussion Paper to help you consider improvements to the current laws. This consultation closes on 29 January 2016. Read more about how you can have your say below.  

What are we doing?

Have your say

Next steps

Some rental horror stories are being recorded by The Greens Jenny Leong at https://www.facebook.com/events/1513744868919794/.

Community Housing Limited just won't take no for an answer so it's off to court again for Clarence Valley Council

Community Housing Limited is an international public benevolent institution which in 2014 had a surplus of over $11.1 million, total rental income of over $36.6 million and paid no income tax.

In Australia its combined grant and incentive income in that same year was over $17.7 million.

It has 5,600 properties under management in this country according to Managing Director Steve Bevington [Macleay Argus, 12 April 2015, Leonard's light bulb woes]

In the Coffs Harbour area the company appears to have taken possession of 180 Coffs Harbour public housing properties (a mix of one & two bedroom units) in 2011, with the state government contributing a one-off payment of around $1.5 million and the company making a contribution of around $1 million to required property upgrades.

In the Clarence Valley it has fourteen housing properties (a mix of units, townhouses and houses) in Grafton funded by federal, state and local government in the form of land contribution, discounted land sale, capital grants and National Rental Affordability Scheme (NRAS) as well as a loan taken out by the housing company.

In December 2014 this comfortably cashed-up company lost a NSW Land & Environment Court bid for rates exemption on its 1,368 properties in this state.

Now it is back for a second round. This time in the NSW Supreme Court, where on 20 May 2015 it will have a directions hearing (notice of appeal) in Community Housing Limited v Clarence Valley Council 2015/00014853.

Australian Immigration Minister Peter Dutton: a photo study in lifestyle contrasts

This is 109 Jefferson Lane, Palm Beach, Queensland. It is what is described as an investment property owned by the Australian Minister for Immigration and Border Protection, Peter Craig Dutton.

He reportedly purchased it for $2.32 million. In September 2014 the real estate agent described it as a lifestyle address that is simply unrivalled.

This is where many of the asylum seekers in his care live. None of this accommodation can be described as ‘a lifestyle address’.

All detention centre images were found at Google Images

Every Australian Counts launches the DIY Disability Housing Plan

Media release 20 March 2015:

DIY Disability Housing Plan

“While the National Disability Insurance Scheme has been talking about making a plan to start building accessible housing for people with disability, TV’s ‘The Block’ has built 18 units”.

The NDIS at full scheme will have a budget of up to $700 million a year to invest in accessible housing for people with disability. This week we learned that after two years of discussion the housing options paper prepared by the National Disability Insurance Agency has been binned! Instead they are going to discuss the issue again at the next national meeting of disability ministers in April.

John Della Bosca continued “By 2020, there will be 122,000 people with disability eligible for the NDIS without accessible housing. This problem is not going away. It’s time the Ministers took disability housing out of the too hard basket”.

It is taking too long for the governments to come up with a plan and so we are making our own. Today the Every Australian Counts launched the DIY Disability Housing Plan. While our politicians are talking about making a plan, people with disability and their families are going to write a plan ourselves.

John Della Bosca concluded: “We are calling on our 160,000 supporters to send in ideas on how the NDIA should invest $700 million each year to provide accessible housing to people with disability. What they have taken two years to do, we will do in one month.

Contributions to the paper are being made at http://www.everyaustraliancounts.com.au/take-action/

Before you start to cry copious tears for Community Housing Limited on the NSW North Coast......

Mainstream media on the NSW North Coast reported that Community Housing Limited had lost its NSW Land & Environment Court bid for rates exemption on its 1,368 properties in this state.

On its website the company asserts it is a registered charity. However, the Australian Securities and Investment Commission lists it as a public benevolent institution and the court decided that the company failed to prove it was a charity in its presented arguments.

In its Concise Annual Report 2014 Community Housing Limited stated:

At 30 June 2014 CHL had a portfolio of 4,309 properties under rental management in Australia across six States including Victoria, New South Wales, Western Australia, South Australia, Queensland and Tasmania. Internationally in Timor Leste, Chile, and India….

Results for year

Total revenue and other income of the Economic Entity is $70,842,035 (2013: $88,406,634).

Total Members Funds are $315,033,844 (2013: $303,983,086). Net surplus for the year amounted to $11,050,758 (2013:$39,630,760)….

In 2014 the company had a surplus of over $11.1 million, total rental income of over $36.6 million and paid no income tax.

In Australia its combined grant and incentive income in 2014 was over $17.7 million.

In the Coffs Harbour area the company appears to have taken possession of 180 Coffs Harbour public housing properties (a mix of one & two bedroom units) in 2011, with the state government contributing a one-off payment of around $1.5 million and the company making a contribution of around $1 million to required property upgrades.

In the Clarence Valley it has fourteen housing properties (a mix of units, townhouses and houses) in Grafton funded by federal, state and local government in the form of land contribution, discounted land sale, capital grants and National Rental Affordability Scheme (NRAS) as well as a loan taken out by the housing company.

These appear to be typical profiles of how this company funds its affordable housing expansion.

So the bottom line in all this is that a comfortably cashed-up international housing company (which already gets considerable assistance from all three tiers of Australian government) wanted more and didn’t get it.

Forgive me, if I cannot see why it shouldn’t pay its council rates, particularly in regional New South Wales where net surpluses running into many millions are rarely found in in local government coffers.