Property rights

Historic home demolition could be FIRB’s fault

The leafy suburbs of Australia’s major cities are full of laments about historic homes being knocked down and replaced by McMansions or units.

One of the chief recipients of blame for this phenomenon is overseas buyers, particularly the Chinese. However, an article about a historic federation home slated for demolition in the Melbourne suburb of Kew has highlighted the fact that one of the causes of demolitions is actually a measure designed to restrict foreign ownership.

Current foreign investment rules only allow foreign investors to buy residential property if they intend to construct a new dwelling on the land. They cannot buy property just to live in, or rent out, the existing dwelling. This distinction is designed to increase the housing stock and stimulate the building industry but, as with so many government regulations, this one is having unintended consequences.

Kew locals have perceptively pointed out that the restriction is one reason for the spate of demolitions of historic homes in their neighbourhood. The particular house in this case was recently renovated and has a tennis court and swimming pool, so would seemingly be very liveable for the new overseas owners, who bought it for $9.4 million.

However retaining the historic home is not an option for the owners when FIRB rules state that “the existing dwelling must be demolished and continuous substantial construction of the new dwellings must commence within 24 months”. Further, if the owners fail to comply, FIRB will take a dim view of any application for residency they might subsequently make.

Who knows whether these owners might demolish anyway, but next time you see a beautiful historic home being demolished, please consider the real culprit might be the federal government, not the overseas owners.


Wrong perspective on native vegetation

Here’s this issue with native vegetation, with environmentalists and the like concerned by how many trees are cut down to build roads:

However, there is encouraging evidence VicRoads is willing to find ways to reduce the environmental damage of its projects, if road users are also willing to accept a cut to the speed limit.

In recent weeks it changed its proposal for a road widening project in Rushworth in northern Victoria that would have killed 100 trees, after the authority met with community anger.

A third of those trees will be retained in the new design, which reduces the road’s speed limit from 100km/h to 80km/h. The lower limit means a narrower road reserve can be created.

That’s right: the speed limit was slashed to spare approximately 33 trees.

Of course, there is a serious native vegetation issue: that landowners are not compensated for the loss of rights over what they do with their own land arising from native vegetation laws.


The battle for Ningaloo Station


Ningaloo Station is a large pastoral lease about 130 kilometres south of Exmouth, WA.

The station has been managed by the Lefroy family since the 1930s. The Lefroys currently run the station as a camp site, dedicated to conserving this pristine slice of Australian natural beauty.

The Lefroys have been in a long-running battle with the Western Australian government over the future of Ningaloo Station. The current lease has been renewed from 1 July 2015, however a condition of renewal was that the lands minister could remove parts of the land to be managed by government, as provided for under the Land Administration Act 1997.

In 2002, the then-Labor government attempted to do just that. The 22 hectares of land represented not just 48% of the entire pastoral lease but also the lion’s share of the critical infrastructure, including watering points, laneways, holding paddocks, sheep yards, an air strip, workshops, and the heritage-listed Ningaloo homestead.

After initially agreeing not to excise land from pastoral leases in the lead up to the 2005 state election, the Coalition government is now attempting to do just that. Lands Minister Terry Redman has indicated that he wants to incorporate a series of local pastoral leases into the neighbouring Ningaloo Marine Park.

The land should remain in the hands of the Lefroy family. From both an economic and a conservationist standpoint this is the most sensible course of action, a point well made by Pastoralists and Graziers Association of Western Australia president Tony Seabrook:

“People up there who know that country and know it well.

“They are far better off to manage it than a government department working a five-day week with little understanding of how the rangeland works.”

Bureaucratic management of the station will not improve the environmental outcomes in this beautiful part of the world. Private operators are incentivised to manage resources well.

The Lefroy family has also spent considerable sums of money over many years improving and developing the land. They have the right to enjoy the fruits of their labour.

The Lefroys should be left to manage their own small piece of paradise.


One-size-fits-all legislative approach not the solution


Strata law isn’t the sexiest issue, but it has significant consequences for an increasingly large proportion of the urban population in Australia.

Last month, the NSW parliament passed a raft of amendments to the strata regime that operates in the state. Perhaps the most significant change contained in the bill was a provision allowing for the demolition of an apartment block where 75 per cent of owners agree.

Concerns were raised about the impact of the proposed laws back in July this year:

One of the most controversial proposals will be the ability of strata owners to terminate the scheme – and sell or redevelop the building – and if 75 per cent of the strata owners agree, based on one vote per unit, not on different unit entitlements.

At the moment 100 per cent agreement is required and many apartment owners, particularly older residents, will be discomforted by the thought that the building could be sold from under them – even with safeguards on the fairness and transparency of the process.

It’s clear that certain apartment blocks are in desperate need of urban renewal. However, the issue of imposing development on apartment owners via strata law is one that raises questions about property rights.

What is the appropriate threshold point at which the majority can override the wishes of the minority?

This is obviously a question that needs to be resolved in a strata agreement, but is it a question that needs to be resolved by government?

To my mind, this is something that ought to be left to contracting parties. There’s no need for a one size fits all legislative approach – allow for different strata to determine their own thresholds. Choosing to buy into an apartment building is a decision based on a range of factors, and the rules of the strata agreement should be one of those factors. Those with a preference for development are likely to want to buy into a building that stipulates a lower majority than those who wish to buy and hold over the long term.

The current 100 per cent threshold is not for everyone. But neither is the new 75 per cent figure. The NSW government should give more room to strata flexibility.


IPA welcomes government scrapping bank deposit tax


The Abbott government’s announcement to scrap plans for a tax on bank deposits of up to $250,000 is welcomed by free market think tank the Institute of Public Affairs.

“It is pleasing that the Abbott government has come to its senses on the bank deposit tax, providing welcome relief for Australian savers in an uncertain financial environment,” says Dr Mikayla Novak, Senior Research Fellow at the Institute of Public Affairs.

“The 0.05 per cent tax on bank deposits, estimated to raise $1.5 billion over the budget forward estimates, was unwarranted given the relative strength of the Australian financial sector.”

“In the current climate of ultra-low interest rates the imposition of the tax would have hurt ordinary Mum-and-Dad bank deposit holders, and would have taken us back to the pre-GST era of inefficient financial transaction taxes,” says Dr Novak.

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Heritage protection for commission housing?


The Sirius apartment complex has been called a ‘brutalist eyesore’, but the Heritage Council is seeking to have it listed by the State Heritage Register


That’s it – Australia is now officially heritage crazy.

In Sydney, the Heritage Council is eyeing off an old and precious building: a 1978 public housing monstrosity. A heritage system designed to protect the magnificent buildings of yesteryear now includes 1970s commission housing blocks.

Only last week, a similar story appeared in the UK Evening Standard. A 1998 British library – denounced as ‘one of the ugliest buildings in the world’ when built – is now protected under Grade I listed status.

Any logical consistency of heritage listings seems to have been thrown out the window. Although the line between ‘to heritage list’ or ‘not to heritage list’ remains blurry, we are certainly travelling in the wrong direction. It seems almost any claim for protection will be awarded.

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Don’t trust the Zimbabwean government to dispense justice

How noble:

The Zimbabwean environment minister has called for the dentist who killed Cecil the lion to be extradited from the US to face trial for financing an illegal hunt…

“Unfortunately it was too late to apprehend the foreign poacher as he had already absconded to his country of origin,” [Oppah Muchinguri] told a news conference on Friday. “We are appealing to the responsible authorities for his extradition to Zimbabwe so that he be made accountable.”

Ignoring for a moment the morality of what the dentist has done, one should be forgiven for being cynical at the minister’s rush to deliver “justice”. Muchinguri’s leader, tyrant Robert Mugabe, not only recently fed elephant to guests at his own birthday party (as recounted by Tim Blair here), but has also been responsible for turning Zimbabwe into a total basket case, including the wholesale violation of property rights and the rule of law, which has plunged the nation into poverty:

… so long as the toxic Section 72 of our constitution remains in place; so long as court orders are allowed to continue to be ignored; so long as the law and international court judgments are allowed to continue to be spurned; so long as our government continues to justify racism and practice it in defiance of every human rights charter ever written, agriculture will continue to fail. Racist and corrupt kleptocracies will always fail their people.


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Tim Wilson on why property rights are human rights

This year, we celebrate the 800th anniversary of the sealing of the Magna Carta. More than a simple peace treaty between King John and his Barons, its legacy inspires modern concepts of the rule of law and constitutional government.

The Magna Carta also established the ‘clear principle’ of the protection of property against the arbitrary power of the state. As Australia’s Human Rights Commissioner Tim Wilson argues in the latest edition of the IPA Review, it ‘essentially commenced the snowballing effect that has led to the modern idea of human rights.’

The Commissioner’s important article stresses the importance of property rights, and how they relate to human rights:

But the real justification for property rights is that it is a human right. The contemporary ‘progressive’ script on property rights is that they are essentially a right to protect existing privilege—demonstrating just how adrift many people are from understanding the very nature and origin of human rights.

Arguably property rights are the foundations of all human rights. Indeed, the very basis of natural rights theory is that people own their own bodies and should be free to exercise their faculties to pursue their lives, opportunities and enterprise unless they do harm to others. It is why liberals and conservatives oppose slavery.

Continue reading here.


What Mad Max teaches us about the importance of property rights


Mad Max: Fury Road opens in cinemas today, and it is already bringing in rave reviews. The film is being praised for realising a world so foreign to us – a world of anarchy and violence ruled by warlords.

So why is that so foreign to us? What is it about our society that stops us living in a world on anarchy?

Property rights.

Having complete ownership of property, and having that ownership recognised by other members of society, is the theoretical basis from which much of our laws derive.

For example, I have a phone. I can do anything I want with my phone as long as it doesn’t interfere with other people’s property. I can lend you my phone, but only I can decide to do that. You can’t take it. If you do, you will be punished by the state.

If we lived in a society that did not recognise property rights, we would live in the society seen in Mad Max. If an individual parked himself on the outback highways the film is set in and decided that no-one could use the roads and that anyone who tried would have to hand over their possessions to the individual, there would be no method of stopping it that didn’t involve violence.

So when you watch the film, rest assured that our society’s respect for property rights means we will never be in the same frantic high-speed chases as we run away from warlords. Our society might not make a better movie, but it makes a better life.