Quotes of the Week

Why do so few make it out of poverty? I can tell you from experience it is not because some have more merit than others. It is because being poor is a high-risk gamble. The asymmetry of outcomes for the poor is so enormous because it is so expensive to be poor. Imagine losing a job because your phone was cut off, or blowing off an exam because you spent the day in the ER dealing with something that preventative care would have avoided completely. Something as simple as that can spark a spiral of adversity almost impossible to recover from. The reality is that when you’re poor, if you make one mistake, you’re done. Everything becomes a sudden-death gamble. [Christian H. Cooper writing at Nautilus on Why Poverty Is Like A Disease, 20 April 2017]

The total rate paid by a high earner on $200,000 is nothing like 50 per cent. The first $18,200 isn't taxed at all because of the tax-free threshold, the next $18,000 is only taxed at 19 per cent, and so on, meaning the total tax taken works out at $71,232 including levies – a rate of 35.6 per cent. [Economic Editor for The Age, Peter Martin, writing on 24 May 2017]

A gender lens on the 2017-18 Budget exposes its class-ridden, misogynistic bottom line

In 2014 the Abbott Government ceased the thirty year-old federal government practice of releasing a Women's Budget Statement.

The National Foundation for Australian Women stepped in to fill the gap since then and this month has released its 97-page review of the Turnbull Government’s 2017-18 Budget, Gender lens on the Budget.

This budget review contains little that is unequivocally positive for women and summarises the bad news thus:

Women are overrepresented at lower income levels. Changes to government benefits and increases in taxes have a disproportionate effect on women. ATO statistics recently released show the median income for women was $47,125 in 2014-15, while for men the amount was $61,711.

Effective marginal taxation rates (EMTRs) measure the proportion of each extra dollar of earnings that is lost to both income tax increases and decreases in government benefits (for example, Parenting Payment, Family Tax Benefit, the Age Pension etc).

The increase in the Medicare Levy will affect those on incomes greater than $21,644. For those with eligible children, FTB A payment rates are frozen for two years. Those who pay child care fees will continue to face high EMTRs. University graduates will start repaying loans when they reach income levels of $42,000 per year.

These changes hit those on earning well below the average wage, and are particularly harsh for women. Combined, these changes could lead to effective marginal tax rates of possibly 100% or higher for some women, particularly as Family Tax Benefit Part A begins to decrease at $51,903. Graduates caught between these policies will experience considerable financial stress; graduates earning $51,000, most of whom are likely to be women, will have less disposable income than someone earning $32,000. Changes to penalty rates may also have a significant impact on some graduates if they are extended to the aged and health care sectors as well as the childcare sector.

The point to note is not just the harsh effects on low income women but also that it is not discussed in the Budget papers, with no modelling of the exact EMTRs for different groups of women provided. The way to improve incomes for most women is not to cut taxes but through improved welfare, social investments and increased wages (for example, by taking real action against the spread of precarious low paid work or by opposing cuts to penalty rates). Tax cuts, particularly those for top income earners, lower revenue at a time when investment is needed in public services and social infrastructure. ATO statistics show that in 2013-14 only 17% of women had taxable incomes greater than $80,000. This tax reduction has led to an increase in gender inequality.

Welfare payments to the unemployed are a small part of total welfare outlays. However, as ACOSS points out, the 2014 demonising of recipients continues. Many groups argue for an increase in the value of the Newstart payment, and an increase in Commonwealth rent assistance. What we have instead is ineffectual drug testing, harsh compliance penalties and expanded income management. However, for sole parents there will be a new verification process that is especially demeaning.

There were no measures designed to specifically address gender inequality and the related entrenched financial vulnerability of women….

This Budget fails to address major challenges facing young women in Australia, and has no measures to improve financial, job or housing security for this cohort.

Youth unemployment is at 13.5% of the youth labour force, which is the highest rate in 40 years, and many young people are underemployed (18% of young people in the labour force) (Brotherhood of St Laurence, 2017, 3). Women aged 20-24 have a much higher rate of underemployment than men of the same age (Burgess, 2017). The job market is increasingly casualised and insecure, and as young people have little or no working experience they are more likely than other groups to work in nonpermanent jobs (Brotherhood of St Laurence, 2017, 4). There is nothing in this Budget to address the unemployment or underemployment that young people experience, and which have implications for the economic security of young women…..

The enhanced residency requirements for claimants of the Age Pension and the Disability Support Pension (DSP) from 1 July 2018 will require claimants to have 15 years of continuous Australian residence before being eligible to receive the Age Pension or DSP unless they have:

* 10 years’ continuous Australian residence, with five years of this residence being during their working life (16 years to Age Pension age); or

* 10 years’ continuous Australian residence, without having received an activity tested income support payment for a cumulative period of five years.

Approximately 40% of older Australians are born overseas and the majority of these are women (AIHW 2007, 4). Within CALD communities, as with the broader population, women are more likely to require age pension support because they have less superannuation (from lower paid jobs and from fewer years working). Women are therefore more vulnerable to economic insecurity and should not be punished in old age for being migrants or for not being able to meet the 5 cumulative years of no income support payments during the requisite 15 years’ continuous residency. CALD women are more likely to experience periods of income support due to their family care responsibilities and should not be punished for this.  [my yellow/red highlighting]

Has the Republican Party finally pushed the American people too far?

Facebook News Feed:

 Weakley County Sheriff's Department

11 May at 08:23 · 

PRESS RELEASE 05/11/17

INVESTIGATORS FROM THE CRIMINAL INVESTIGATIONS DIVISION OF THE WEAKLEY COUNTY SHERIFF'S DEPARTMENT HAVE ARRESTED 35 YEAR OLD WENDI L. WRIGHT OF 4004 HUBERT HARRIS ROAD IN OBION COUNTY TENNESSEE AND CHARGED HER WITH FELONY RECKLESS ENDANGERMENT AFTER AN INCIDENT THAT TOOK PLACE IN WEAKLEY COUNTY ON MONDAY MAY 8TH 2017. DURING THAT TIME IT IS ALLEGED THAT WRIGHT FOLLOWED A VEHICLE OCCUPIED BY UNITED STATES CONGRESSMAN DAVID KUSTOFF AND HIS AIDE MARIANNE DUNAVANT WHILE THEY WERE GOING DOWN HIGHWAY 45 SOUTH OF MARTIN . THEY HAD BEEN AT A TOWN HALL MEETING ON THE CAMPUS OF THE UNIVERSITY OF TENNESSEE AT MARTIN. WRIGHT PLACED THE OCCUPANTS IN FEAR OF BEING FORCED OFF OF THE ROADWAY. THEY TURNED ONTO OLD TROY ROAD AND INTO A DRIVEWAY OF A PERSON THEY WERE FAMILIAR WITH. WRIGHT EXITED HER VEHICLE AND BEGAN SCREAMING AND STRIKING THE WINDOWS OF THEIR VEHICLE AND AT ONE POINT REACHED INSIDE THEIR VEHICLE. SHE THEN STOOD IN FRONT OF THEIR VEHICLE IN AN ATTEMPT TO KEEP THEM BLOCKED IN. A 911 CALL WAS PLACED DURING THIS TIME BUT WRIGHT LEFT THE AREA BEFORE DEPUTIES ARRIVED. WRIGHT WAS IDENTIFIED AFTER SHE POSTED DETAILS OF THE ENCOUNTER ON FACEBOOK. WRIGHT WAS LOCATED BY DEPUTIES FROM THE OBION COUNTY SHERIFF'S DEPARTMENT AND TAKEN INTO CUSTODY ON THE WEAKLEY COUNTY ARREST WARRANT. SHE HAS BEEN RELEASED AFTER POSTING A ONE THOUSAND DOLLAR BOND. WRIGHT WILL BE ARRAIGNED ON MONDAY MAY 15TH 2017 IN WEAKLEY COUNTY GENERAL SESSIONS COURT.

INVESTIGATOR CAPTAIN RANDALL MCGOWAN

WEAKLEY COUNTY SHERIFF'S DEPARTMENT

Screenshot from CNN Politics video

iOTW Report, 14 May 2017:

A man got physical with Republican North Dakota Rep. Kevin Cramer at a town hall meeting Thursday before being escorted out by police.

The man was yelling at Rep. Cramer, "Will the rich benefit from, if the health care is destroyed, do the rich get a tax break? Yes or no?" He then shoved cash into the congressman's collar, saying, "There you go, take it."

Cramer responded, "That's too far," and police escorted the man from the meeting.

Problems with tax collection from Australian resource and energy sector due to aggressive avoidance strategies

It would appear that successive federal and state governments have allowed the resource and energy sector to take Australia for everything except the gold fillings in its teeth……..

2 Office of the Chief Economist, Resources and Energy Quarterly, December 2016; Office of the Chief Economist, Resources and Energy Quarterly, December 2015; Office of the Chief Economist, Resources and Energy Quarterly, December 2014.

[Australian Taxation Office (ATO) 30 March 2017 submission to Senate Standing Committees on Economics, Inquiry into Corporate Tax Avoidance]

The Sydney Morning Herald, 29 April 2017:

Multinational gas companies will soon sell an annual $50 billion worth of Australian liquefied natural gas to foreign markets, but the nation will have to wait more than a decade for any revenue boost and some projects will never pay a cent in tax for the resources they extract.

A report prepared for the Turnbull government into the petroleum resource rent tax has confirmed fears, first revealed by Fairfax Media in 2015, that revenue from offshore gas will continue to flatline until at least 2027.

Despite that, Treasurer Scott Morrison insisted on Friday that Australians were not being shortchanged, but said the government would consider some changes to the system.

The review of the PRRT by former treasury official Mike Callaghan has acknowledged there are systemic problems and recommended changes to toughen the system for new LNG projects.

But, in a clear victory for the $200 billion industry, he shied away from urging any major changes for projects already past the investment stage, including Chevron's giant Gorgon and Wheatstone ventures and Shell's Prelude project.

The Callaghan report was released amid the political wrangling over east coast gas supply and on the same day the Senate inquiry into corporate tax avoidance grilled LNG bosses in Perth.

The Sydney Morning Herald, 26 April 2017:

Foreign-owned gas companies have legally avoided paying significant tax on billions in earnings from their Australian operations because of loopholes, according to a study. 

The loopholes have allowed the companies to write off interest payments for the borrowings of offshore subsidiaries, it has been claimed.

The study, by academic accountants at the University of Technology School of Accounting, and left-leaning campaign group GetUp, looked at the available balance sheet data of gas giants ExxonMobil and Chevron. It found the two companies have achieved colossal revenue flows from their Australian operations but paid little if anything in petroleum resource rent tax in recent years.

The practice is known as "debt loading" or "thin capitalisation".

Over the two years 2013-14 and 2014-15, Chevron earned more than $6.12 billion in revenue, but paid nothing in PRRT, according to the assessment.

It found ExxonMobil achieved revenue of almost three times that at $18.08 billion in the same period, but paid only $803.5 million.

The study concluded that between the operation of the company tax rules and the petroleum resource rent tax regime these enormous multinational resources companies can "load up" their balance sheets with excessive debt, thereby reducing taxable income to the point where the tax liability is low or non-existent.

The report, Investigation into the Petroleum Resource Rent Tax and Debt Loading in Australia – 2012 to 2016, found 95 per cent of oil and gas projects in Australia paid nothing in PRRT in 2014-15.

Australian Petroleum Production & Exploration Association (Appea) Ltd, Submission to the Review of Commonwealth Petroleum Resource Taxes, February 2017: 

APPEA does not consider a case exists for any changes to be made to the existing PRRT provisions.

Oil and gas corporation Santos Limited currently seeking to establish coal seam gas fields in NSW stated in a 3 February 2017 written submission to the current Senate inquiry into tax avoidance:

Santos has participated in a number of offshore and onshore oil and gas projects during the period of operation of PRRT, from 1 July 1986 (see attachment). Based on our experience with petroleum projects in which Santos has an interest it is our view that PRRT has operated as intended and that therefore the existing design features are appropriate…..

The declining revenues are a function of changes to the industry and currant commodity prices rather than changes or faults in the original design of PRRT.

Santos Limited with a total income of $3.38 billion in 2014-15 declared it had no taxable income in that financial year. The previous financial year its tax liability was $3.14 million on a declared taxable income of $27.34 million out of a total income before tax of $4.35 billion.

“The Adelaide-based Santos has long been accused of being a major contributor to the tight gas supply situation in eastern Australia due to the reliance of its Gladstone LNG project on third-party suppliers.”

BACKGROUND

The Australian, 25 August 2012:

SOME of Australia's biggest oil and gas players expect to pay little or no additional tax on their multi-billion-dollar onshore energy projects, putting federal government hopes of billions of dollars of additional revenue in doubt.

The admissions by Woodside Petroleum, Santos and Origin Energy indicate the government is unlikely to receive any significant additional funds in the foreseeable future from the expanded petroleum resources rent tax.

Parliament of Australia, Corporate Tax Avoidance:

On 2 October 2014 the Senate referred an inquiry into corporate tax avoidance to the Senate Economics References Committee for inquiry and report by the first sitting day in June 2015.

On 15 June 2015, the Senate granted an extension to the committee to report by 13 August 2015. On 12 August 2015, the Senate granted an extension to the committee to report by 30 November 2015. On 23 November 2015, the Committee was granted an extension to report by 26 February 2016. On 22 February 2016, the committee was granted an extension to report on 22 April 2016.

On 2 May 2016, the Senate granted the committee a further extension to report by 30 September 2016.  

The inquiry lapsed at the end of the 44th Parliament.

On 11 October 2016, the Senate agreed to the committee's recommendation that this inquiry be re-adopted in the 45th Parliament. The committee is to report by 30 September 2017……

On 1 December 2016, the committee resolved to broaden the scope of the inquiry to include Australia's offshore oil and gas industry.

The committee has asked to receive submissions on the treatment and/or payment of:

i. royalties;

ii. the Petroleum Resource Rent Tax (PRRT);

iii. deductions; and

iv. other taxes

by corporations involved in Australia's offshore oil and gas industry, including matters relating to the collection of these moneys by government.

University Of Technology Sydney, Ross McClure et al, Analysis of Tax Avoidance Strategies of Top Foreign Multinationals Operating in Australia: An Expose, 19 April 2016:

Multinational corporations are in a unique position to engage in tax aggressive strategies, as they are generally large in size and highly profitable, they exhibit low levels of debt in their capital structure, and have operations across national borders that generate foreign income streams. The overall group is made up of multiple entities across a number of tax jurisdictions and most multinational corporations have at least one subsidiary in a tax haven.

These characteristics have been associated with tax shelter activity in the U.S. (Wilson 2009) and with aggressive tax planning strategies such as abusive transfer pricing in Australia (Richardson et al. 2012). The information technology, pharmaceutical and energy sectors are both dominated by large multinational corporations and provide strong mechanisms that allow these corporations to divert profits away from where value and profits are created in order to reduce their tax liabilities.

News.com.au, 17 March 2017:

Gas on the east coast of Australia is controlled by a handful of companies and the lack of competition means they can charge higher prices locally.

At the moment, supply is controlled by six companies: Santos, Exxon, BHP, Origin, Arrow Energy and Shell. Some of these companies also control pipelines used to transport gas around the country, also adding to inflated prices……

He [energy analyst Bruce Robertson] said the global glut of gas, which is predicted to continue until 2030, has also put more pressure on companies to make money domestically.

The more they restrict supply locally, the more money they make.

It’s created the bizarre situation that sees Australian gas being sold in Japan for a wholesale price that is cheaper than the price it’s available for in Australia.

Santos, Shell and Origin Energy have to stick to long-term contracts they signed with Japan amid a global glut, but the lack of competition in Australia means they can restrict supply locally and drive up prices.

Australians are now paying a price higher than the international price for gas.

There’s even talk about Australia importing its own gas back because this would be cheaper.

Australia is also not profiting as much as we could from selling our gas overseas.

Japan reportedly puts a tax on the gas it imports from Australia, which will deliver it $2.9 billion over the next four years.

In comparison, Australia will not receive any money from its petroleum resource rent tax from gas projects over the same period. We get $0 in tax from selling our gas overseas.

Most of the $800 million we do get from the tax every year comes from established oil operations in the Bass Strait, rather than from LNG producers.

Left unchecked the gas & coal mining sectors will be the death of the Great Artesian Basin and what is left of the Great Barrier Reef

According to an August 2016 Report Commissioned By The Australian Government And Great Artesian Basin Jurisdictions Based On Advice From The Great Artesian Basin Coordinating Committee the Great Artesian Basin (GAB) is one of the largest underground freshwater reservoirs in the world. It underlies approximately 22% of Australia – occupying an area of over 1.7 million square kilometres beneath arid and semi-arid parts of Queensland, New South Wales, South Australia and the Northern Territory. Approximately 70% of the GAB lies within Queensland…..

The first people to make use of GAB water were Indigenous tribes for whom it was critical to survival. Indeed, there is evidence that the GAB sustained Aboriginal people for thousands of years prior to European settlement.

The natural springs of the GAB provided a critical source of fresh water, and supported valuable food sources including birds, mammals, reptiles, crustaceans and insects, creating an abundant hunting ground for local tribes. The plants and trees around the artesian springs were used for food, medicine, materials and shelter.

The springs provided semi-permanent oases in the desert and supported trade and travel routes which evolved around them. The springs also played a key part in the spiritual and cultural beliefs of Aboriginal people. Ceremonies and other events were held at spring wetland areas which remain precious cultural and sacred sites. Numerous Creation stories feature a connection to groundwater.

This underground freshwater reservoir holds 65,000 million megalitres much of which fell as rain 1 to 2 million years ago, but not all of this water is in accessible layers.

For assessment purposes the GAB is divided into four regions – Carpentaria, Central Eromanga, Western Eromanga and the Surat Basin.

In 1878 the first bore was sunk to draw water from the Great Artesian Basin.

In modern Australia its economic values are shared by towns, agriculture, cattle & sheep grazing and industry/mining across the four basin regions.

The Courier map based on a 22 August 2016 report

Economic output of groundwater dependent sectors in the Great Artesian Basin 

                                                                                                                                              

The report points out that Water has historically been extracted from the GAB at a greater rate than recharge and this creates a problem for 21st Century Australia.

Professor of Environmental Sciences Derek Eamus, University of Technology, 18 June 2015:

As the pressure in the GAB has declined and the water table drops, mound springs (where groundwater is pushed to the ground surface under pressure) have begun to dry up in South Australia and Queensland. Associated paperbark swamps and wetlands are also being lost and it gets more and more expensive to extract the groundwater for irrigation and other commercial applications.

On average, rates of groundwater extraction across Australia has increased by about 100 per cent between the early 1980s and the early 2000s, reflecting both the increased population size and commercial usage of groundwater stores.

Despite the strain on water resources, the gas and coal mining industries are allowed virtually unlimited water extraction from within the Great Artesian Basin and where the few limits are placed on extraction it is poorly policed by government agencies.

This is a graph of coal seam gas, conventional gas and petroleum industry water use 1995-2015:

Source:.DNRM 2016, p. 62.

The Adani Group’s most recent water licence for the Carmichael coal project issued in April 2017 allows it to take a virtually unlimited volume of groundwater each year for the next 60 years, plus surface water – with minimum oversight.

The Environmental Defender’s Office (Qld) states that: It is expected that Adani may require up to 9.5 billion litres of groundwater every year for the Carmichael project.

Poor management by Adani of its Abbot’s Point coal waste has already led to a smothering of the vibrant, nationally important Caley Wetlands with run-off via its estuarine system expected to reach adjacent waters of the Great Barrier Reef World Heritage Area.

Satellite image of Caley Wetlands after emergency water release by Adani - now covered in coal waste.

A picture of the Abbot Point coal loading facility showing coal water run-off moving north-west into the wetlands and coal dust on the beaches. The Age, 12 April 2017, Photo: Dean Sewell

Coal dust on the beaches next to the Abbot Point coal loading facility  Photo: Dean Sewell/Oculi

Great Barrier Reef Blog

On 10 March 2015 ABC News reported:

Hundreds of square kilometres of prime agricultural land in southeast Queensland are at risk from a cocktail of toxic chemicals and explosive gases, according to a secret State Government report.

A study commissioned by Queensland's environment department says an experimental plant operated by mining company Linc Energy at Chinchilla, west of Brisbane, is to blame and has already caused "irreversible" damage to strategic cropping land.

The department, which has launched a $6.5 million criminal prosecution of the company, alleges Linc is responsible for "gross interference" to the health and wellbeing of former workers at the plant as well as "serious environmental harm".

The 335-page experts' report, obtained by the ABC, has been disclosed to Linc but not to landholders.

It says gases released by Linc's activities at its underground coal gasification plant at Hopeland have caused the permanent acidification of the soil near the site.

Experts also found concentrations of hydrogen in the soil at explosive levels and abnormal amounts of methane, which they say is being artificially generated underground, over a wide area.

The region is a fertile part of the Western Darling Downs and is used to grow wheat, barley and cotton and for cattle grazing, with some organic producers.

Other documents, released to the ABC by the magistrate in charge of the criminal case, show four departmental investigators were hospitalised with suspected gas poisoning during soil testing at the site in March.

"My nausea lasted for several hours. I was also informed by the treating doctor that my blood tests showed elevated carbon monoxide levels (above what was normal)," one of the investigators said.

High levels of cancer-causing benzene were detected at the site afterwards.

On 9 February 2017 ABC News was still reporting on the contamination:

Flammable levels of hydrogen have been found at a number of locations near the site of a controversial gas project that has been blamed for contaminating huge swathes of prime Queensland farm land.

The ABC understands an ongoing Environment Department investigation has confirmed that the contamination is much more widespread than previously thought.

The Queensland Government has dispatched Environment Department officers to the Hopeland community, near Chinchilla in the state's south, and is setting up a call centre to help explain the situation to landholders…..

Due to fears about possible hydrogen explosions, the Government has been enforcing a 314-square kilometre "excavation caution zone" around the Linc plant, with landholders banned from digging any hole deeper than two metres.

The ABC understands further investigation by the Environment Department has now found flammable levels of hydrogen at locations outside the current caution zone.

The hydrogen has been detected underground and the department says it dissipates quickly in the open air.

Government sources have stressed the gas is not of an explosive concentration but landholders will be encouraged to exercise caution.

Left unchecked the mining industry will bring the Great Artesian Basin closer to collapse.

It is not as if either federal or state governments ever fully realise the supposed financial gains allowing this environmental degradation was supposed to bring to their treasuries.

In 2007-08 the Australian Taxation Office released taxation data which showed that 68.8 per cent of all mining companies on its books paid no tax in that financial year. In 2009-10 the percentage of mining companies paying no tax had risen to 73.1 per cent and in in 2010-11 the percentage of mining companies paying no tax was 72.2 per cent. By 2013-14 a total of 60 per cent of publicly listed energy and resources companies did not pay tax and again in 2014-15 60 per cent of all energy and resources companies paid no tax.

Add to this the fact that Adani in Australia in estimated to have paid only 0.008 percent in tax on their total income in 2014-2015 and is structured in such a way that its tax burden is artificially lowered and a significant proportion of its profits move offshore to the Cayman Islands tax haven.

It isn’t hard to see a pattern developing here.

Maximum environmental, cultural, social and economic risk for Australia with minimal financial return on risk.

Looking for all those vacant residential dwelling being deliberately kept out of the Australian housing market

In the 2011 Census there were 2,297,460 rented private dwellings recorded. This was 29.6 per cent of the 7,760,322 private dwellings declared covering an est. 8,420,000 households.

By December 2016 the total number of private dwelling stood at 9,802,700 properties, for an est. 9,268,700 households.

Simple maths shows there was possibly around 534,000 private dwellings for which there were unlikely to be tenants and which were potentially available for sale.

Given these excess dwellings are likely to be unevenly spatially distributed, a number of metropolitan suburbs and regional urban areas would still be experiencing limited availability of housing stock for rent or sale and therefore demand may be unmet.

However, according to BIS Sharpnel; In 2017After a record breaking building boom in most capitals, Australia will have 24,039 extra homes above what are needed and will be oversupplied for the first time in more than a decade, a new report shows.

So why is it so hard to find a place to rent in large metropolitan areas and why is housing for sale so expensive?

It appears there is an artificial drought which can only be explained by the high percentage of investment properties in the housing stock mix which had reached 23 per cent by 2015, comprising one quarter of all house stock and two-thirds of apartment stock.

Domain.com.au released a ball park estimate of all vacant properties on 4 April 2017, based on Prosper Australia  research:

QUEENSLAND

An estimated 59,000 properties are standing empty in Queensland.

NEW SOUTH WALES

There are an estimated 121,000 properties vacant across New South Wales (with up to 90,000 properties standing empty in Sydney suburbs).

VICTORIA

The president of Prosper Australia, Catherine Cashmore, who has collected data on water usage to show there are 80,000 empty homes in Melbourne, said an empty home tax was an intuitively appealing policy that could pave the way for greater reforms.

SOUTH AUSTRALIA

There are an estimated 23,000 properties vacant in South Australia.

WESTERN AUSTRALIA

An estimated 21,000 vacant properties.

NORTHERN TERRITORY

There are an estimated 2,000 vacant properties in the Territory.

AUSTRALIAN CAPITAL TERRIOTORY

An estimated 5,000 vacant properties.

TASMANIA

An estimated 7,000 vacant properties.

The Sydney Morning Herald reported on 28 March 2016:

Vacant properties were among the "perverse outcomes" of tax incentives that encouraged some investors to favour capital growth over rental returns, according to the analysis by the UNSW's City Futures Research Centre.

"Leaving housing empty is both profitable and subsidised by government," researchers Bill Randolph and Laurence Troy said. "This is taxation lunacy and a national scandal."

The ANU Centre for Social Research and Methods analysed Australian Taxation Office data and found at least 4,204 “legislators” who owned investment properties of which more than 13.87 per cent appear to negatively gear their properties.

By 2017 226 of these “legislators” were federal MPs and senators who owned 525 properties between them and about 48 per cent of these parliamentarians own investment properties.

So it is not hard to see why the Turnbull Government is dragging its heels when faced with the “perverse outcomes” arising from negative gearing and capital gain tax concessions.

Or why a Coalition state government like the NSW Government would decide that the best way to address a perceived housing shortage is to give its political supporters free rein.

Sky News, 9 January 2017:

The NSW government will be able to fast-track developments under a massive shake-up of the state's planning system aimed at tackling Sydney's chronic housing shortage.

Councils will determine fewer development applications under the proposed changes but will be responsible for devising more planning strategies with local communities.

Other proposals include providing incentives for developers if they consult with neighbours and the community before lodging development applications and simplifying building regulations.

It defies belief that the NSW Coalition Government would believe that just building more private housing for investors to warehouse for financial gain is a solution to rising house prices and limited availability.

In December 2016 the average annual full-time adult wage/salary of an individual was est. $79,721 or $1,533 per week before tax and in an employment field of 12.06 million workers only 8.30 million had full-time jobs. An estimated half the workforce would probably have earned below $56,000 per annum.

Realestate.com.au calculates that it requires at least one person in a marriage/
partnership, presumably without children, to be in full-time employment - and earning more in wages each week than half the current workforce - for the couple to have any hope of saving for a deposit within a reasonable time period:

[http://www.realestate.com.au/news/how-long-does-it-take-to-save-for-that-first-home]

So if our multimillionaire prime minister, Malcolm Bligh Turnbull, and his parliamentary fellow travellers won’t act to ease housing affordability by removing taxation loopholes which allow the greedy to manipulate the housing market to their advantage, then it is up to voters to apply a cattle prod to their privileged haunches – and vote them out in 2018-19.

And if state governments won’t move to penalise investors who deliberately leave residential dwellings vacant for a trouble-free capital gain as well as a tax deduction, then voters with an eye to the future of their children and grandchildren might consider letting them know how they feel about the situation.

Ninety-six per cent of Australian federal parliamentarians own a property

ABC News, 20 April 2017:

There's no housing affordability crisis in the ranks of Federal Parliament's members and senators.

The politicians charged with tackling the thorny issue of spiralling house prices are among the nation's most aggressive property investors, an analysis by the ABC has revealed.

The 226 individuals own 524 properties between them and about half of them own investment properties.

That means many of our politicians have a very personal interest in any changes to negative gearing and the capital gains tax discount……

Ninety-six per cent of parliamentarians own a property. Only 10 out of our 224 elected officials aren't in the game.

Compare that to the rest of Australia, where home ownership is expected to dip below 50 per cent sometime this year.

Register of Members’ Interests for 45th Australian Parliament.

Although a number of investment properties are listed in the members’ register this does not necessarily mean that additional property is not owned as part of superannuation schemes (other than that operated by the Commonwealth of Australia) or included in the assets of a private corporation in which a member has a significant shareholding.

GREED Inc: rental income & negative gearing in Australia

The Guardian, 12 April 2017:

The ATO stats also show the number of landlords with an interest in six or more rental properties has grown quickly in the last three years, up 8.6%, from 17,671 to 19,198 individuals.

Landlords with an interest in five rental properties have grown even faster, up 9.8%, from 16,600 to 18,231. Those with an interest in three or four properties have also grown quickly, up 7% each.

By comparison, the largest number of landlords are those with an interest in a single rental property, at 1.5 million. Their number increased by just 2% over the last three years.

The Conversation, 13 April 2017:

The latest data from the ATO is consistent with what we’ve seen in the past. It shows that people with high-income occupations – doctors, lawyers, and others – are more likely to use negative gearing than the nurses and teachers on whom Treasurer Scott Morrison focuses when he tries to justify retaining negative gearing. It also shows that negative gearing is typically worth four to five times more for doctors and lawyers than nurses and teachers.

The Guardian, 13 April 2017:

The release of the taxation statistics for 2014-15 reveals that, while the number of people negative gearing has levelled in the past three years as interest rates have fallen, the greatest share of the benefits of negative gearing goes to above average earners – and the biggest growth is to those owning multiple properties.

With housing affordability and negative gearing the hot topic in the run up to the May budget, the annual release of the taxation statistics by the ATO on Wednesday served to reinforce how greatly negative gearing figures in people’s tax affairs.

In 2014-15, 1.27 million people recorded a rental net loss. This was down slightly from the 1.3 million in the years before and meant that 12.8% of taxpayers were negative gearing.

Again that was down from the previous year and the peak of 2012-13 when 13.4% of taxpayers were recording a rental loss…..

The reason for the drop is mostly because the main way to achieve a loss on your rental investment is through payments on the interest of the mortgage. But, as interest rates fall, that cost also falls, which means it is actually harder to record a loss.

Over the past four years, the number of people claiming a deduction for payments of interest on a rental property have increased but the total amount claimed has fallen…..

The median rent in NSW in the December Quarter of 2014 for housing ranging from 1 bedroom to 4 or more bedrooms was $420-$500 per week. With the median rent being $450-$600 in Greater Sydney, $230-$433 in the Greater Metropolitan Region and $230-$245 in the rest of NSW.

During the same quarter median rents across the NSW Northern Rivers region ranged from $180-$580 per week.

In 2014 the gross rental yield for apartments in Sydney CBD, Paddington, Darling Point, Double Bay, Kirribilli, Rose Bay, Tamarama, Bellevue Hill, Point Piper, Potts Point, and Vaucluse, i.e., the gross return on investment in a apartment if fully rented out, ranged from 2.8 per cent to 5.0 per cent according to Global Property Guide.

Want to know the average rental loss claimed for taxation purposes by landlords in your postcode? Then use this interactive map.