Australian Politics
Monday, February 26, 2024
Stamp duty stops thousands from moving every year: PropTrack, e61 Institute report
Stamp duty is a really horrible tax that hits people when they can least afford it
The removal of stamp duties could instigate 100,000 more home sales each year in NSW alone, with new research revealing a single percentage point increase to the transaction tax significantly reduces a buyer’s appetite to purchase.
The findings from research firms e61 Institute and PropTrack revealed a 1 per cent increase in stamp duty can reduce property sales by 7.2 per cent each year as the burden of the “inefficient tax” creates an affordability hurdle.
The research analysed the impact of then-Queensland premier Anna Bligh’s 2011 decision to nearly double stamp duty for owner-occupiers. Despite a short-term boost in the six weeks between the announcement of the change and implementation, the 2011/ 2012 financial year recorded a 9 per cent drop in the number of people moving – the equivalent of 20,000 households – and a 14 per cent decrease in people moving to the Sunshine State.
The decision was reversed when the Newman Government won power in 2012.
Research Manager at e61 Institute, Nick Garvin, said the economic impacts of stamp duty on employment, productivity and housing availability aren't immediately obvious.
“Everybody knows that stamp duty is a big cost, but it’s fairly hidden because it gets charged to people at a point when they’re spending all their savings ,” Dr Garvin said.
“It’s important to understand that there are economic effects. There are pretty strong signs that the productivity of the economy would be lifted when it’s easier for people to move and change jobs. With slowing productivity and problems with housing availability, removing barriers to job and housing mobility is critical.”
Dr Garvin suggests that if NSW removed stamp duty, about 100,000 additional owner-occupiers would move home each year, up about 25 per cent on current levels.
“Queensland gives us a quantification of the sensitivity of purchases to stamp duty,” he said, with the economic modelling taking into account interest rates and other influencing factors on the market at the time.
“This is the best estimate we have – obviously different states, different points in time, the effects could vary – but we have no particular reason to think the effect in Sydney would be higher or lower.”
Since the mid-1990s, the average stamp duties collected nationally have tripled relative to incomes. To buy in Sydney and Melbourne, the average homebuyer would need a full six months of income to cover the tax bill, which is about six times more than it was a generation ago.
PropTrack senior economist Angus Moore said bracket creep has been an important driver of this increase in stamp duty as most states have the same tax brackets they had decades ago.
“That means that, as home prices have increased, these brackets now capture more homes at higher tax rates,” Mr Moore said.
“This process of bracket creep has seen us go from as few as 12 per cent of buyers paying a rate of stamp duty of 3 per cent or more in the early 1990s to 95 per cent today.”
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Nuclear, gas fuel Dutton’s tilt at green madness
In 2004, Australian electricity bills were the fourth-lowest in the OECD. The wind and solar caper had barely begun, and coal and gas supplied 91 per cent of the National Electricity Market.
Today, after 20 years of subsidy chasing by the renewable energy industry, Australia has slipped to 10th place in the OECD rankings of end-user power prices.
Of the nine countries where electricity is cheaper, six have nuclear power stations. They are Finland, Mexico, Switzerland, South Korea, Canada and the US. Of the remaining three, the wet and hilly ones, Norway and Iceland run mostly on hydropower because that’s the way God made them. Israel, somewhat unfashionably, has stuck with coal and gas but has other things to worry about.
So much for Energy Minister Chris Bowen’s claim that the opposition is using nuclear power as a culture-war distraction. His argument collapses at the first brush with reality.
Nuclear is the only baseload alternative to fossil fuel for the inhabitants of a wide and flat brown land unless we care to drill down 40km through the Earth’s crust to tap geothermal energy, which even Bowen must concede is impractical. The minister’s forlorn grab for supporting evidence in his article in The Weekend Australian suggests he knows he is losing the argument.
Until recently, conventional wisdom held that a pro-nuclear policy would be the kiss of death for the Coalition. Yet Bowen would know how quickly public opinion is changing, even within the green movement. When voters are asked if they favour nuclear power, the numbers are usually tight.
When the pollster asks if they would consider nuclear power, however, a clear majority say yes. The readiness to consider nuclear grows when they are asked about small modular reactors, notably among younger voters.
Bowen’s foolhardy use of statistics is unnerving, given his power to call upon the resources of a sizeable government department to stop him from embarrassing himself. He writes that “by early 2025, renewable energy will surpass coal as the planet’s largest source of energy”. As the Energy Minister should know, energy differs from electricity, which accounts for just 20 per cent of global energy use, according to the International Energy Market’s latest data.
Wind and solar accounted for 2.2 per cent of the world’s energy mix in 2019 if we assume it is what the IEA means by “other”. If we include hydropower in the renewables basket, it rises to 4.8 per cent.
Oil accounts for 31 per cent, down from 44 per cent in 1971, but the gap has been filled by gas (up from 16 to 23 per cent) and nuclear (0.5 per cent to 5 per cent). Coal has remained steady at 26 per cent.
The data does not exactly leap to Bowen’s defence, even if we assume he has conflated energy with electricity. In 2019, wind, solar and biofuels generated 10.8 per cent of the world’s electricity, and hydro 15.7 per cent. Fossil thermal fuel was by far the biggest contributor at 63 per cent.
Admittedly, the IEA’s reporting is somewhat tardy, but it would take a hockey stick curve of Michael Mann-ic proportions for renewables to overtake coal by this time next year, even if it were feasible.
Bowen’s suggestion that nuclear projects fall like skittles is equally hard to substantiate. The World Nuclear Association lists 62 nuclear plants under construction in 17 countries. They include 26 in China. Some 440 more are listed as either planned or proposed, of which 196 are in China, 25 in Russia and five in Iran.
Yet Peter Dutton would be foolish to assume the argument is as good as won, or that a nuclear policy is a substitute for a convincing energy policy.
Even on the most optimistic timetable, nuclear will not be part of our energy mix before the mid-2030s and investment won’t flow without a thorough reform of the energy market.
The short answer to almost every question is gas. The Opposition Leader will have little trouble persuading his own party room, where past battles have instilled a degree of energy literacy. He should prepare for considerable opposition from his own party at the state level, however, where many Coalition MPs have formed a unity ticket with Labor and the Greens in opposition to the imagined climate emergency.
Dutton should not underestimate the quantity of the venom in the hornet’s nest he has disturbed by challenging the orthodoxy that prevails in the media, universities and government departments. As Tony Abbott discovered, these people are not prepared to surrender their dogma in this policy debate without a fight.
An even more formidable opponent will be the energy industry, where a powerful combination of virtue signalling and naked self-interest has set in.
The energy industry with few exceptions is not campaigning for fossil fuel, as renewable advocates often claim. It is busy chasing subsidies and playing with the market. It has worked out easier ways to make money than supplying customers with affordable and reliable electricity. Renewable Energy Certificates have proved be a more dependable source of revenue than the energy itself.
Labor’s planned Capacity Investment Scheme, which is supposed to underwrite 32GW of renewal energy investment, has the added appeal of letting them make money without actually turning the generation plants on. It provides an even stronger incentive to stop nuclear before it eats their lunch.
Over the past 10 years, the renewable energy industrial complex has grown in strength and sophistication. It channels tens of millions of dollars into grassroots campaigns in Australia, creating an almost bottomless war chest to fund lawfare and buy influence in politics. Renewable energy interests almost entirely underwrote the teal campaign in 2022. Dutton shouldn’t expect any of these so-called independents to back nuclear anytime soon, despite their claim to be the heroes putting integrity back into politics.
Big renewables will fight almost as hard against gas, even though quick-start-up turbines are the quickest and cheapest way to firm the supply of the intermittent energy they fitfully supply. Gas threatens their investment in batteries for the same reason nuclear threatens renewables.
The cause of common sense is not just lost. Dutton has defeated the woke Goliath once and could do so again. Corporate support for the voice, however, was mainly motivated by virtue signalling rather than crude financial self-interest.
To use the words that turned boxing announcer Michael Buffer into a household name, “get ready to rumble”.
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Going to univrsity is not always the right choice
Students with poor grades in high school will be encouraged to go to university and set on a career path that is wrong for them, experts warn, under sweeping recommendations in the federal government’s higher education review that are coming under fire from vice-chancellors.
One higher education expert warned that students with ATARs as low as 45 could make it into university under the blueprint for the sector outlined in the Universities Accord review’s final report, released by Education Minister Jason Clare on Sunday.
The biggest review of tertiary education in 15 years has called on the Albanese government to double the number of university places in the next 25 years, reduce the high fees students pay in some subjects and reform the HECS loan scheme to ease the financial impact on graduates.
The recommendations in the review will cost tens of billions of dollars over the next 25 years if fully implemented. They aim to create a highly educated workforce, with more than 55 per cent of 25 to 34-year-olds having a bachelor degree or above by 2050.
The review recommends more government funding to dramatically increase the number of disadvantaged students from poor backgrounds and regional areas at university.
“At the moment almost half of young people in their 20s and 30s have a uni degree. But not … in the outer suburbs … not in our regions. And the accord is about changing that,” Mr Clare said. Although the report was welcomed by most universities, Australian National University higher education expert Andrew Norton warned the attendance target meant that students with an ATAR of only 45 would be going to university,
“Historically most students with ATARs below 50 don’t go,” Professor Norton writes in The Australian. “Those who do, face a high risk of dropping out, and if they finish a reduced chance of getting a well-paid job. Nobody should be encouraged to take courses that probably won’t leave them better off.”
While most of the recommendations are uncosted, Australia’s three wealthiest universities – Sydney, Melbourne and Monash – have slammed a key proposal to tax university income and redistribute resources from richer institutions to poorer ones.
The report calls for all universities to pay an impost on “untied” revenue they earn through their own efforts, including international student fees, unsubsidised domestic student fees, interest and investment income, and business earnings.
The tax, which will fall mainly on universities with high international student income, will contribute half of a $10bn investment in the Higher Education Future Fund, to pay for university infrastructure including campus buildings and student accommodation. The $5bn raised in tax would be matched by the government.
Monash University vice-chancellor Sharon Pickering said the future fund plan would interfere with universities’ ability to deliver on the accord review’s goals of increasing numbers of disadvantaged students and building the workforce skills needed in a modern economy.
University of Melbourne vice-chancellor Duncan Maskell said he was concerned by the proposal. “A new tax on universities will weaken Australia’s current and future productivity, innovative potential and prosperity,” he said.
University of Sydney vice-chancellor Mark Scott, who is also chair of the Group of Eight universities which benefit most from international student fees, said the future fund tax plan “would hurt our reputation and our capacity to attract international students”.
The report made no recommendations on the level of the tax but said it should only commence once a new university funding system was in place and should cease when $5bn had been raised.
It would mainly affect five of the Group of Eight universities which have large numbers of high fee paying Chinese students – Sydney, Melbourne, Monash, UNSW and Queensland.
Western Sydney University vice-chancellor Barney Glover, a member of the accord review panel, said the fund was “important future proofing for the sector” but there was “work to do on design and timing”.
On Sunday Mr Clare said he had an open mind on the tax and the future fund, and would decide over the next weeks and months. “There are some universities who hate it, there are other universities who love it,” he told the ABC.
The review called on the government to reduce the high fees student pay in some subjects, and reform the HECS loan scheme to ease the financial impact on graduates. The review says high university fees of over $16,000 a year in some fields – including humanities, communications, and other society and culture subjects such as human movement – should be reduced.
It also urged reforms to HECS to ease the effect high inflation has on increasing the amount students owe and to reduce the financial impact on HECS debtors when their income first hits the loan repayment threshold.
The report says banks lending practices should be reviewed so people don’t have their home loan borrowing capacity unduly affected by HECS debt.
The review panel, headed by former NSW chief scientist Mary O’Kane, makes 47 recommendations for reforming tertiary education, aimed at dramatically increasing the number of Australians who continue education after finishing school.
The review recommends a goal of having 80 per cent of working age Australians with at least one tertiary qualification (vocational or higher education) by 2050 compared to 60 per cent at the moment.
It urges the government to set an achievement target of having 55 per cent of 25 to 34-year-olds holding a bachelor degree or above by 2050, compared to 45 per cent now. This will require a doubling of commonwealth supported university places for domestic students from 860,000 in 2022 to 1.8 million in 2050.
The review says universities should get more government funding for educating students with higher needs, such as those from low socio-economic status backgrounds, from regional and remote areas, and Indigenous students.
The review also calls for more innovative types of courses such as micro-credentials and degree apprenticeships, payments to students for compulsory internships, free university preparatory courses, higher living allowances for needy students, better recognition of prior learning for people starting qualifications, and a “jobs broker” to help students find part-time jobs while they are studying in the area of their course.
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Why it’s a mistake to deny the science of sex
In 1949, Simone de Beauvoir wrote that one is not born, but rather becomes, a woman. For decades after her claim, feminists have championed the idea that social conditioning is what creates differences between the sexes.
As little girls we are encouraged by our parents to play with dolls. As we get older we are encouraged to be decorative. From the clothes we wear to the interests we pursue, thousands of tiny interactions with the world mould us into the women we are.
But advances in neuroscience are throwing at least some of this conventional wisdom into question. While we have known for a long time that sex may have some subtle influences on the brain (how could it not?), a study published last week in the Proceedings of the National Academy of Sciences suggests such influences may be more expansive than previously thought.
The landmark study, conducted by Stanford professor Vinod Menon, and with Srikanth Ryali, PhD, and academic staff researcher Yuan Zhang, PhD, took a large sample of fMRI brain scans from 1500 young adults between 20 and 35, and then tested whether deep neural networks (AI models) could detect their sex. They could.
The AI models looked at many brain images from each person taken at different times (the brain scans were also taken from people in different regions). It found complex patterns that predicted if a brain was male or female with over 90 per cent accuracy.
The AI could not only tell if a brain was male or female, but the researchers also created explanatory models to predict cognitive abilities based on their images. Because male and female brains are so different, separate models were needed for each sex.
I contacted Professor Menon to ask what this meant. He told me “there were no gender differences (found) in the general intelligence factor, but response inhibition and reward sensitivity were higher in males than females”.
There are a multitude of implications in these findings. Male brains having higher reward sensitivity and variable response inhibition may explain why males tend to be more vulnerable to addiction and ADHD, for example.
The finding that males and females are different may strike many as intuitive and hardly worthy of journalistic attention, much like the observation that water is wet.
One might argue quite reasonably that anyone who spends any time around children knows girls and boys are different, and that these differences are not superficial. Nevertheless, in the world of academia, simple intuition does not go very far. In the scientific fields at least, empirical claims have to be proven with data.
Not only that, but there has been significant hostility from some quarters towards the idea that male and female brains differ at all. This hostility has been grounded in the fear that any discovery of differences will be used to reify gender stereotypes and justify discrimination against women – something female academics are naturally attuned to. Writing in Quillette in 2019, veteran neuroscientist Larry Cahill wrote: “Senior colleagues warned me as an untenured professor around the year 2000 that studying sex differences would be career suicide.”
But sexism does not need any scientific justification to exist. The odious Andrew Tate, for example, uses social media to spread his noxious misogyny and, as far as I am aware, is not relying on any findings from neuroscience in doing so.
Republicans in the United States are restricting women’s reproductive rights – including abortion and even IVF – on theological rather than scientific grounds. And I am not aware of the Taliban subscribing to Neuroscience News.
In truth, sexism flourishes wherever scientific progress is suppressed, not where it is advanced.
And ignorance about the influence of sex on the brain harms, rather than helps, women. For decades, basic research was only conducted on male cells, male animals and male clinical trial participants. Yet we know the incidence of many neurological conditions, from migraines to Parkinson’s disease, manifest differently according to sex. The failure to study how sex influences out of fear it will contribute to sexism means women miss out on having medical treatments tailored to their needs.
The fear of acknowledging sex differences has also, ironically, given rise to another form of anti-female prejudice. Today the denial of biology has metastasised into the denial of sex itself. Trans activists argue that one can literally change biological sex, and that biological males have no physiological advantage over women in sports.
Women are being denied the right to single-sex spaces such as bathrooms and change rooms, and new mothers are insultingly described in government-mandated protocols as “chestfeeders”. This is Simone de Beauvoir’s argument on steroids – this time used to erase womanhood altogether.
Refusal to grapple with biological realities has hampered progress in a way that has helped no one. Indeed, the denial of sex differences has not eradicated sexism but instead has led to the neglect of women’s health needs and the emergence of new forms of prejudice unimaginable just a decade ago.
While there may be some risks associated with new discoveries in neuroscience, these risks are outweighed by the potential benefits. As Larry Cahill has quipped: “The potential to misuse new knowledge has been around since we discovered fire and invented the wheel. It is not a valid argument for remaining ignorant.”
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Also see my other blogs. Main ones below:
http://dissectleft.blogspot.com (DISSECTING LEFTISM -- daily)
http://antigreen.blogspot.com (GREENIE WATCH)
http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)
http://edwatch.blogspot.com (EDUCATION WATCH)
http://snorphty.blogspot.com/ (TONGUE-TIED)
http://jonjayray.com/blogall.html More blogs
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My son Joe at ANU
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