Wednesday, 14 December 2016

ON THE COMMONS OF UK AND LAND TITLES IN AUSTRALIA

A migrant’s lament and observations

Synopsis

The invasion of 1788 brought the concept of ‘enclosure’ and private ownership of land to Australia because that was a time when great tracts of England’s commons were being enclosed by Acts passed by the Parliament at Westminster. That Australia was a huge agglomeration of Aboriginal commons was totally overlooked and the commoners, the Aboriginal peoples, were pushed aside with no compensation as offered in UK. Enclosure is foreign to the land of Australia and is damaging to both peoples and the land itself. Possibly the teachings of Henry George may, over time, help ameliorate the situation.

Introduction

I migrated from Sussex, UK to Tasmania in 1981 at the age of 57. After 14 years we, my wife and I, moved to our present home near Byron Bay. But I write about land and the Australian attitude towards it.

The Commons of England

After a couple of decades in Australia, I realised I missed the commons of England – I had taken them for granted whilst domiciled there. Many Australians have lived in the UK and enjoyed access to the remaining commons with no thought as to the connection with Australia’s history.

The commons are tracts of land on which the general population enjoy ancient rights of access and although the commons have been subject to many ‘Acts of Enclosure’ over the centuries, the remnants are still a major feature of the country. For most people they are somewhere to walk the dog, take a stroll or do a more extended walk through the English countryside. Such are Clapham Common, Wimbledon Common, Blackheath all within Greater London. I worked for the Government on ’commandeered’ land Chobham Common, Surrey, in the 60s and US cruise missiles were similarly placed on Greenham Common. When I left UK, I was a Commoner of Ashdown Forest, enjoying grazing and bedding rights for my livestock and thatching and firewood rights over the 3,000 acres of common – which once belonged to John of Gaunt.

The Acts of Enclosure, which enabled huge tracts of English commons to be enclosed and privatised, were passed in the Parliament of Westminster – which was then largely composed of big landholders and members of the legal profession; it was all ‘legal’ – notices being displayed in the parishes concerned, some consultation with affected parties and some compensation was on offer. If neighbouring landowners were after the same bit of common, this was sorted out at Westminster before the Act was legislated. (Westminster became known as the place where the rich and powerful sorted out their differences – a definition I wryly recall when it is claimed that Canberra represents the Westminster system here!)

With the realisation of my loss it dawned that Australia does not ‘do commons’ for sound historical reasons. Between 1750 and 1850 very many Acts of Enclosure were effected and there was some justification that agriculture had to be modernised to meet the needs of the growing population as the industrialisation gathered momentum; the urban population was increasing rapidly and the rural population declining.

Enclosures and Aboriginal Philosophy
Thus at the beginning of white ‘settlement’ of Australia the ‘Establishment mind-set’ was one of ‘enclosure’ – the concept of ‘commons’, where land is not owned by any but used by many,  was in their view out-dated, bad, inefficient and certainly not part of any plans for the ‘new’ nation. (At the time, ‘democracy’ was also a dirty word.) From my understanding, Australia then was like a vast, continent-wide, agglomeration of Aboriginal Commons – the land not ‘owned’ at all but used, shared, nurtured and venerated by the numerous tribes of the indigenous population according to their needs and culture. White man did not see this at all; it was  ‘terra nullius’ – the commoners were ‘brushed aside’ with no thought of compensation.  And I say that I miss the commons of UK! How can this compare with a people’s complete loss of their common land that had been their total sustenance for millennia! It seems to me that the ‘invaders’ did not just steal the land but ‘enclosed’ – even ‘imprisoned’ – it.

A deeper connection between the idea of commons versus enclosures was brought to mind a few months ago at a talk by Aboriginal academic and activist, Dr Mary Graham, QUT. She spoke about Aboriginal philosophy in comparison to ‘western’ modes of thought saying that Aboriginals had no difficulty in hold different concepts simultaneously. In contrast, western views were ‘either or’, ‘this or that’, ‘alive or dead’. It struck me that this is an exact parallel as between enclosures (this is mine, not anybody else’s) and common land which has many users and uses. This is also shown in the western, legalistic ‘Native Title’ when ‘Aboriginal Common’ would have been more representative of traditional status and highlighted more recently with the kerfuffle raised when Bill Shorten on Q&A said that Aboriginal constitutional recognition could be considered as well as a Treaty; most aboriginal spokespeople have agreed with this, the neoliberals – Turnbull, Brandis & co – say ‘no, no’ we can only think about constitutional recognition don’t complicate the issue!

Modern Australia reflects this difference in the passion for ‘ownership’ of real estate and the regard for land as a commodity and investment. And in the absence of public rights of way and parcels of common land.

This poses the question, ‘Can there be true reconciliation between two groups having such a fundamentally different philosophy and such a different regard for ‘country’, the land? Accepting such a situation, when asked what can be done about it, Mary Graham replied, ‘I don’t know’.  

Her talk/interview can be heard at https://www.youtube.com/watch?v=JAwBqTVbxNs


Can Georgist ideas help
Nothing, of course, will change ‘western’ attitudes quickly and one cannot put the clock back but my feeling is that there is much merit in the teachings of Henry George (1839-1897): he proposed that the only tax that should ever be collected is a Land Value Tax  - if you need a piece of Australia for your exclusive use and benefit, then you compensate the rest of us for ‘forgoing our rights’. His book, ‘Progress and Poverty’ is still in print; one of his seminal observations was the one never finds abject poverty without luxury being nearby!

There is of course much more to Henry George’s teaching than this but it seems to me that if all – especially lessees and freeholders – were obliged to pay a Land Value Tax quarterly, even monthly, we would be reminded that our occupation of the land carries obligations as well as rights. Times have ‘moved on’ since George’s day but the concept of taxing land remains. That land taxes are invariably concocted by State Governments to benefit some and punish others and to be competitive between States has made them unpopular but George’s idea was a simple, flat rate tax applied throughout a nation. Such could not be more fair nor more broadly based but it would need to be introduced slowly so that society and the economy could adjust. But if we can have a ten year plan for changes to company tax, we could equally have a ten year plan for land tax! Since George’s time, there have been many suggestions – other than General Revenue – for the creative uses of the revenue of LVT. Julian Pratt in his book, 'Stewardship Economy' - recalls that Thomas Paine suggested 'payments from the fund be made unconditionally to rich and poor alike' - in effect, a Citizen's Income. Ref http://www.stewardship.ac/stewardship.htm

I am coming to the view that the concept of enclosure is indeed foreign of the land of Australia and that both residents and Australia itself are suffering in consequence; maybe some Georgist’s teachings can help ameliorate the situation over time.

Colin Cook,
Bangalow NSW
July 2016


Monday, 28 November 2016

Affordable Housing - think leasehold & CLRI


Letter to Byron Shire ECHO 27 Oct 2016

The pathway to affordable housing is well lit by the CLRI – the Canberra Land Rent Initiative. In the ACT, house blocks are offered on the basis of freehold ownership or leasehold; the former requires a big capital commitment, the latter simply the ability to pay the ground rent. The CLRI enables would-be residents meeting specific requirements to pay a ground rent of just 2% of valuation.  See http://www.lda.act.gov.au/en/land-rent-scheme This is a truly practical way of helping folk build a home – not just ‘get into the housing market’ – for the experience in Canberra is that a good number of the ‘two-percenters’ and other leaseholders, once they get themselves established in life, convert to the freehold option for financial and security reasons.

This scheme is possible because the ACT owns the land. So, if we are serious about affordable housing, we need to focus on replicating the CLRI and leasehold offerings in regions where the potential residential land is privately owned. The key is to place conditions on the land at the time of ‘change of use’ being granted that requires a good proportion of blocks to be made available to owner-occupiers as leasehold on well-defined terms.

Such conditions will reduce the size of the windfall that does accrue to the land owner on change of use; as this monetary gain is entirely the gift of the community, there are very good reasons for the community to hang on to part of the gift for social benefit. This is not ‘value capture’ as admired by Baird and Turnbull but ‘value retention’!  Why give it away, when we could make good use of it building social capital. This way, no one is subsidizing the pathway to affordable homes, just the land-owner is not getting as big a windfall as otherwise.

There are many obstacles along this route but they are worthy of detailed study to surmount them. A lot of attention is given to minute houses and land supply; the former are ‘interesting’ and the latter is well controlled by the ‘real estate’ industry to limit risk and maximise return. In truth, affordable housing is almost entirely about affordable access to land.






Saturday, 26 November 2016

Value Capture

Value Capture
 Jamie Briggs, then Federal Minister for Cities and Built Environment, went to Hong Kong to study it – got distracted and lost his portfolio; Premier Mike Baird was leading that 2015 delegation, thinking that maybe an HK outfit (a mostly Government owned one) could help build a Sydney rail line or two. The Turnbulls, Lucy and Mal, are/have been keen advocates. 
So what is value capture?
When a piece of useful infrastructure is built, the land and properties serviced by it appreciate in value; value capture is when the builder of that infrastructure recoups some or all of that appreciation  in value of nearby land/property instead of it flowing into the pockets of the land owners.
It is not a new idea having been used to part fund the building of Sydney Harbour Bridge but was give a great boost when HM Treasury in the UK reported that the new Jubilee London Underground line had cost £3.5bn to build and surrounding land values had increased by £13.5bn; the report was titled, ‘Taken for a ride’.  
Value capture has been mostly used for mass transit systems, eg Melbourne City Loop and Chatswood Station in Sydney and has been a matter of trading some development rights in return for the infrastructure. If rail lines, why not rock walls?
If we are forced into building and maintaining a rock wall at Belongil, then the concept of Value Capture could well sharpen the minds of our Council – staff and elected – as to how to fund the infrastructure, who benefits and who loses out and at what cost. Value Capture does entail a most thorough examination of any proposal including all the legal aspects and time lines.
The community must however remain on ‘full alert’; it is too easy for public bodies, Councils and the like, to yield that which is not theirs to give, not to drive hard bargains on our behalf. Lest we be ‘Taken for a ride’.

Colin Cook,
3 Bannister Court,
Bangalow, NSW 2479.
6687-2278
PS: There is very well researched and referenced Australian Government Information Sheet at https://bitre.gov.au/publications/2015/files/is_069.pdf

NOTE. This was the substance of a letter to there Byron Shire ECHO when the construction of a rock wall on the beach was being debated to directly protect a few residential properties threatened by beach erosion.




Saturday, 12 November 2016

The true cost of INEQUALITY, NASTY DEMOCRACY

'Where there is anything like an equal distribution of wealth the more democratic the government the better it will be: but where there is gross inequality in the distribution of wealth, the more democratic the government the worse it will be.' Henry George, 1897

George goes on to explain that to give voting rights to ‘tramps, paupers, to men who must beg, or steal, or starve, is to invoke destruction’.  That is, if you have a huge chunk of voters who are impoverished/exploited/disillusioned then a nasty outcome is assured. It is not ‘rocket science’ that an angry majority will give power to despots espousing their interests.


He argues that a rotten democracy can be worse over time than a rotten autocracy because of its corruption of the national character; with a majority of ‘angry’ voters, changes most likely will tend towards despotism because such voters will give power to ‘the worst’ leaders, leaders supporting their angry sectional interests, not the whole community interest.

Is this what is being evidenced in USA and Brexit?

This would seem to be a most presentient analysis of socio-economic inequality which has become – since the start of the Occupy movement in September five years ago - a recognized feature of Western democracies. The quotes are from George’s most famous work, 'Progress and Poverty’, the chapter, ‘How modern civilisation may decline’.

Is this the true cost of inequality, the degradation of democracy, the degradation of our political system? Is it on the cards for Australia if our inequality trends to the levels prevailing in USA? Do we need an Equity Commission to steer us from such fundamental dangers? We should be paying attention!

Footnote
Henry George (1839-1897) was an American economist and philosopher, a great orator, and is best known for his promotion of Land Value Taxation. This Single Tax came at the end of a long study as the means to remedy the many social ills he had previously identified. One of these ills was that there was never abject poverty unless there was great affluence nearby. For more information, see https://www.prosper.org.au/about/henry-george/

Saturday, 29 October 2016

The Treasurer's XI - a short allegory on deficits

The Bean Counters Score


It was a long week-end and the Treasurer’s Eleven – aka, The Bean Counters - had come up from Canberra to play the Village; they lost the toss, the Villager’s openers took the field – but consternation, for the bowling was underarm! ‘Do these guys know what they’re up to?’ was the general reaction around the ground.

But there was consternation amongst the scorers as well for the Treasurer’s scorer started with a bag full of kidney beans – transferring them methodically into a black box as runs were made.

The runs were coming freely once the Villagers got the hang of slow, low, curly deliveries – wickets were lost mainly through carelessness and hilarity but at 256 for 7 the Treasurer’s captain called a halt; all the beans had been used – there were no more runs to be had!

‘But what about our other three batsmen?’ complained the local skipper; mark them as ‘unemployed’ was the response, ‘there are no more runs for them score’.

Lunch was a slow, somewhat sombre affair - the visitors seemingly uninterested in taking the field. ‘What’s the point’ said the Treasury skipper, ‘Where will the runs come from? You lot have used up all the beans, there are no runs for us to score.

‘Don’t worry where the runs will come from’ assured the Village scorer, ‘we use a computer – so we have just as many runs as you need and more besides. No need for any of your batsmen to be unemployed.’

Free from the dread of the beans running out, the Treasury boys batted happily scoring 221 before the last wicket fell.

Net result, Treasury suffered a 35 run deficit, the Villagers enjoyed a 35 run surplus.

And the point is?

  •         The game of life should not be restricted by how many beans are to hand.
  •         When Treasury loses, others enjoy a win. And vice versa.
  •         Bean counters can learn a thing or two from the SCG scoreboard
  •         No reason for anyone to be marked, ‘unemployed’ if you understand cricket scoring - or Modern Money Creation (Ref Bank of England Q1 2014)

CC Oct 2016

Background brief

The Australia Federal Government is a CICG, a Currency Issuing Central Government.  The currency it issues is the Australian dollar which, since 12 December 1983 has been a FIAT currency; that is, ‘State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard’ (Wikipedia). In short, our dollar is backed by no material substance but is a constitutional project and its value is underwritten by the willingness of the Federal Government to accept it in payment of taxes.#

Our dollars mostly appear as book keeping entries, numbers on computer screens not as ‘real money’; ordinary folk cannot create A$s to add to their own balances or those of their friends, only the CICG can do that. Because a FIAT currency has no material backing, literally no thing limits how much can be produced but the amount of currency that should be created is fixed by the sum total of the national resources – human, material, administrative and constitutional. To issue more FIAT money than that would be inflationary.

·         #  And we all have confidence that this is so; this confidence is important for it is mutually supportive and what makes FIAT currencies work; they are not ‘a trick’ but an essential tool for modern societies.