Sunday, September 20, 2015
Australian Crackdown on Foreign Property-Buyers Intensifies
The crackdown is just a bandaid. The real reason for high Australian property prices is land-use restrictions supported by a devil's combination of NIMBYs and Greenies -- and to some extent farmers. Getting land released to house a growing population -- growth mainly caused by high immigration -- is therefore usually something of a battle -- often a costly battle with costs being passed on to home buyers.
A sensible loophole in the restrictions, however, is that foreign buyers can readily invest in new builds. That should encourage new builds and counter the unemployment effect of reduced mining activity.
One might also note with some amusement that 12 properties affected so far will hardly have macro effects
And, finally, the overseas buyers are almost all in the high-end market. So the restrictions help only affluent Australians, not the average Joe. A sad policy solution to a real problem. A more effective solution would be a reduction in net immigration, maybe even a complete moratorium -- JR
A government clampdown on illegal investment in Australian real estate has broadened, with almost 500 properties worth more than 1 billion Australian dollars (US$713 million) in total under investigation and more foreign buyers forced to sell properties.
The government has been under pressure to rein in an investment-driven surge in home prices in Australia’s two biggest cities Sydney and Melbourne, amid growing criticism that wealthy Asian buyers are making the property market increasingly unaffordable.
Treasurer Joe Hockey said divestment orders have been served on five properties across the country, forcing their owners—who hail from Singapore, Indonesia, the U.K. and China—to sell homes. He added that the crackdown is continuing despite political turmoil this week that saw Malcolm Turnbull replace Tony Abbott as prime minister.
“The purchase prices of the properties range in value from A$265,000 to A$8.1 million,” Mr. Hockey told reporters in Canberra. “The foreign investors involved either purchased established property without Foreign Investment Review Board approval, or had approval but their circumstances changed, meaning they were breaking the rules,” he said.
The central bank has warned the property boom is unbalanced and potentially dangerous to a fragile economy, as economists become increasingly nervous about the possibility of the country entering a recession for the first time in 24 years.
Australia’s economy grew by 0.2% in the second quarter from the first three months of the year and 2% from a year earlier, its slowest quarterly growth in four years in the second quarter. The Reserve Bank of Australia is forecasting 2.25% growth for the year, but a dip below 2% could put the prospect of an interest-rate cut back on the table.
Many Australians fear cashed-up foreign investors could put homeownership out of reach of much of the population. Mr. Hockey told The Wall Street Journal last month that equity-market turmoil in China could drive even more Chinese buyers to seek havens by investing in Australian property.
China last year overtook the U.S. as Australia’s largest source of investment from overseas, with a total of A$27.6 billion last year, according to FIRB, the foreign-investment watchdog. Real estate accounted for almost half of that.
The latest divestment orders bring the number of properties hit by the crackdown to 12. In March, Mr. Hockey ordered a Hong Kong-based buyer of a A$39 million Sydney mansion to sell after investigators said it was purchased illegally.
This time, the properties netted by the crackdown are scattered across the country and include homes in the cities of Perth, Sydney, Adelaide, Brisbane as well as the Gold Coast, in tropical Queensland state.
Mr. Hockey said all five owners had voluntarily come forward to detail their investments, meaning they would have a year to sell their homes rather than the usual three months, under an amnesty offer announced by the government in May.
Mr. Hockey could be replaced as Australia’s chief economic minister after a leadership putsch in the conservative government that this week installed Mr. Turnbull as prime minister. Among the possible candidates to become treasurer is Scott Morrison, regarded as one of the government’s most effective ministers.
Prince Philip received his knighthood from former prime minister Tony Abbott 'following a request from the Queen after the Duke had complained he had not been 'so richly rewarded' by Australia'
Abbott could have taken the heat off himself by revealing this but he was too much of a gentleman to do so. Note that Malcolm Fraser made Prince Charles a knight in the order of Auatralia in 1981 -- to general approval
Prince Philip received an Australian knighthood after he complained to the Queen that the former colony had ennobled Prince Charles but had ignored himself.
The astonishing claim was made by an Australian journalist who is a close friend to former Prime Minister Tony Abbott who was ousted earlier this month.
Greg Sheridan, foreign editor of The Australian claimed that Abbott only awarded Prince Philip the knighthood in January as a personal favour to the Queen.
According to Bernard Lagan in The Times, Buckingham Palace had contacted Australian authorities to let it be known that the Duke of Edinburgh 'had not been so richly rewarded by Australia' as Prince Charles.
Abbott nominated Prince Philip for the reward, which caused him considerable political pressure domestically.
According to The Times, Mr Sheridan said the knighthood made Abbott 'look absurdly antique and out of touch, reinforcing every negative stereotype about him.
'Abbott gave Philip a knighthood because he learnt the Queen wanted her husband to have one.
'Not only did Abbott endure enormous personal damage because of his loyalty to the Queen, he never leaked the exculpatory explanation, which does not excuse his error in judgement but gives it context, humanises it and may have made it a much less toxic political issue.'
Malcolm Turnbull not going Green
How many compromises was Turnbull prepared to make to get the keys to The Lodge? Plenty, as it turns out.
The first compromise, and perhaps the most surprising, was on climate policy. Turnbull has long been a vocal critic of Tony Abbott and Greg Hunt’s risible Direct Action policy. Yet no sooner had he taken the reins of national government than he was complementing Greg Hunt on the policy and vowing to keep it.
In Question Time yesterday, Turnbull went out of his way to praise Direct Action.
“We are talking about a very specific policy that was carefully put together by the Minister for the Environment, that was carefully considered by the Government, and it is working,” he told the House of Representatives.
Greg Hunt confirmed that Direct Action would stay, telling reporters that “the emissions reduction fund has been a spectacular success. So the policy is continuing.”
Endorsing Direct Action is a massive backflip for Turnbull.
Way back in 2010, Turnbull was savagely critical of Direct Action as a wasteful public subsidy for big polluters. “I've always believed the Liberals reject the idea that governments know best,” he said in a well-publicised speech in Parliament. “Doling out billions of taxpayers' money is neither economically efficient, nor will it be environmentally effective.”
Keeping Direct Action appears to be the first big compromise Turnbull was prepared to make, no doubt to win over some of the hardline climate denialists on the Liberal back bench. Let’s remember that Turnbull was rolled as Liberal leader in 2009 on precisely this issue, after he negotiated with Kevin Rudd and the Labor government to introduce a bipartisan emissions trading scheme.
It’s difficult to believe Turnbull really thinks Direct Action is a good policy. There is not a single independent expert in the land that thinks Direct Action can actually meet the Coalition’s 28 per cent emissions reduction target by 2025. The simple math tells us it will fail: the most recent Direct Action auction of emissions reduction bids bought around 15 per cent of the emissions reductions the government needs, but spent a quarter of the Direct Action budget.
Phonics, faith and coding for primary school kids
Australia's "Christian heritage" will be taught in schools in a slimmed-down national curriculum that focuses on phonics to -improve children's reading.
History and geography have been scrapped as stand-alone subjects, in a back-to-basics return to traditional teaching.
But 21st-century computer coding will be taught in primary school, starting in Year 5, in the new curriculum endorsed by Australia's education ministers yesterday.
Indigenous issues have been cut from parts of the curriculum, and students will no longer be taught about Harmony Week, -National Reconciliation Week, or NAIDOC (National Aborigines and Islanders Day Observance Committee) week.
Students will continue to learn about Australia Day, Anzac Day and National Sorry Day. The Year 6 study of the contribution of "individua-ls and groups" to Australian society will no longer -include a reference to indigenous people or migrants, and will be confined to the post-Federation period.
The existing requirement to study Australia's connection to Asia has been deleted from the new curriculum.
Australia's "Christian heritage" will be taught for the first time, in lessons on "how Australia is a secular nation and a multi-faith society". Teachers will instruct students that Australia's democratic system of government is based on the Westminster system, although specific references to the monarchy, parliaments and courts have been removed from the curriculum.
For the first time, children in Years 1 and 2 will be taught to "practise strategies they can use when they feel uncomfortable or unsafe".
Students in Years 7 and 8 will be taught to "communicate their own and others' health concerns".
But education ministers agreed yesterday to change the curriculum again, to introduce teaching of "respectful relationships".
Teachers will also be given training to identify students who might be victims of family violence.
Queensland Education Minister Kate Jones, who proposed the domestic violence strategy, said a recent spate of violence against women showed that children needed to be taught about respectful relationships at school.
"We believe there's a real oppor-tunity in the health and physical education curriculum in regards to teaching about respectful relationships, to reduce domestic violence and give young people a greater understanding of gender equality," she told The Weekend Australian after the phone hook-up yesterday.
"We also want to provide teachers with additional support in recognising signs of family violence."
Federal Education Minister Christopher Pyne said the changes would resolve "overcrowding" in the primary school curriculum, boost the teaching of phonics and strengthen references to Western influences in Australia's history.
He said state and territory ministers would develop a national strategy to get more students studying STEM (science, technology, engineering and maths) subjects at school.
Ministers yesterday endorsed a digital technologies curriculum, that will start teaching students about computer coding in Year 5, and have them programming by Year 7.
But Ms Jones said the states and territories had not agreed to make STEM subjects compulsory in high school. "Even if we wanted to, we don't have the teachers to do that in Queensland right now," Ms Jones said.
A national curriculum for languages - Arabic, Chinese, French, German, Indonesian, Italian, Japanese, Korean, Modern Greek, Spanish and Vietnamese - was signed off by ministers yesterday.
They also endorsed historic reforms to teacher education, prepared by the Australian Institute for Teaching and School Leadership.
From next year, new teaching graduates will not be allowed into classrooms until they pass a test ranking them in the top 30 per cent of the population for literacy and numeracy.
Universities will also be forced to publish the academic and other "backdoor" requirements for entry to teaching degrees, to raise standards in the teaching profession.
AITSL chairman John Hattie - who took part in the ministerial meeting - said the changes would bring teaching closer in line with professions such as engineering and medicine.
"We have to make it very clear to people considering a teaching career that if you're dumb you can't be a teacher," he told The Weekend Australian.
"We need to worry considerably about the students in the classroom and the quality of the person standing up in front of them."
Mr Pyne said he was "abso-lutely delighted" the states and territories had backed the reforms, which have been driven by the federal and NSW governments.
"The national literacy and numeracy test will provide greater employer and community confid-ence that beginning teachers enter-ing our schools have the literacy and numeracy skills necessary to carry out the intellectual demands of teaching," he said.
Australian Curriculum, Assessment and Reporting Author-ity chief executive Robert Randall said the new curriculum would give teachers more time to teach the basics of maths, literacy, science- and history in primary school.
"We've strengthened the focus on the basics and put in detail about phonics in the early years because of its importance to devel-oping young people's reading ability," he told The Weekend Australian.
Mr Randall said the existing curriculum had so much detail that "teachers were feeling they had to do everything".
"It's important to be able to focus on the content and teach it in depth - we don't want cramming," he said.
"This gives teachers the flexibility to identify what young people- need to know about, and what they're interested in."
Mr Randall said the new curriculum had a greater focus on Western civilisation.
"Historically, the influence of the Christian church has been important," he said.
Mr Randall said that refer-ences to indigenous culture, envir-onmental sustainability and Asia - which are included throughout the existing curriculum, including in maths - had been cut back to "where they naturally fit", with an emphasis on history, geography and art.