foreign ownership

On Q & A of 6 July 2015, ex-jillaroo, Louisa Vaupel, asked the panel's opinion on a proposed sale to a foreign state of the Glengyle, a huge cattle station near Lake Eyre in South Australia, owned by Kidman & Co. Vaupel said she was worried about food security, that she believed that Australian farming needed foreign investment, but was concerned that foreign state-owned enterprises might buy it. We followed the story up and located a photographer called Rod Moffatt, who is trying to have this huge area with many striking natural features conserved for a Lake Eyre Superbasin Park. He made the short youtube video inside this article for Q & A. They did not air it but we are, plus his well-written argument for the superbasin park.

You can read the Q & A panel responses in the appendix. They are all over the place on foreign ownership. Green Larissa Waters did state that the Greens were against selling Australian land, food producing land in particular, in this age of food insecurity, given the changing climate, to state owned outfits. However they are not against foreign investment. Vrasidas Karalis's response mixed foreign investment up with multiculturalism, openness and globalism - all of which he felt we 'must' have for fear of becoming 'inward looking economies because essentially they are self consuming passions'. It seemed that almost everyone was unable to question globalism. Amazingly the legendary right wing owner of the Sydney Institute, Greg Sheridan, was better on this and several other questions than anyone else.

Rod Moffatt's proposal for Glengyle becoming part of a Lake Eyre Basin Super Park

Lake Eyre Basin Super Park
Open letter to all Australian politicians:
Imminent Sale of S.Kidman & Co Ltd Pastoral Leases in Lake Eyre Basin

I am writing to you, seeking your urgent support to halt the planned sale of the S. Kidman & Co Ltd pastoral leases located in the Lake Eyre Basin and the Channel Country - where cattle grazing activities are conducted on land that contains natural values of international conservation significance - worthy of World Heritage listing.

I propose the Commonwealth (with the assistance and cooperation of the relevant State Governments), acquires these Kidman pastoral assets to form Australia’s largest sub-contiguous national park.

On Wednesday 10th June 2015, Ernst & Young (Adelaide) released an Information Memorandum pertaining to the proposed sale of Australia’s largest private landholder, S. Kidman & Co, which has pastoral interests spanning more than 10 cattle stations, and covering more than 100,000 square kilometres, across South Australia, Queensland, Northern Territory and Western Australia.

Over 80 percent (80,529 square kilometres) of the Kidman portfolio comprises pastoral leases situated in the arid desert rangelands of the Lake Eyre Basin of northern South Australia, and the Channel Country of southwestern Queensland and northeastern South Australia - including Anna Creek, Innamincka, Macumba, Durham Downs, Naryilco, Durrie, Morney Plains and Glengyle Stations.

Collectively these cattle grazing holdings constitute nearly 1% of Australia's landmass and occupy a significant footprint over the fragile, arid, and environmentally significant Lake Eyre Basin and Simpson-Strzelecki Dunefields bioregions.

Introduced hoofed animals, such as cattle, and inappropriate grazing management are among the most significant causes of chronic modification of arid and semi-arid land in the Lake Eyre Basin and the Channel Country, and one of the greatest contributors to the increased desertification of these regions.

With the effects of climate change (anthropogenic or otherwise) becoming much more apparent across Australia, it is likely the continued pressure of cattle grazing on arid land pastoral leases in and around the Lake Eyre Basin and the Channel Country will accelerate wind erosion of the soil resource and increase the frequency and intensity of dust storms along the eastern seaboard.

The total cost of the 23 September 2009 ‘Red Dawn Event’ dust storm (just to the NSW economy), was estimated by the CSIRO to have been in the order of $299 million (Tozer & Leys, 2012).

The sale of the Kidman pastoral empire marks the end of the colonial pastoral era, and provides an opportunity for contemporary Australian Government to redress a significant historical environmental mistake.

By acquiring, and extinguishing the leases over a considerable tract of the internationally significant Lake Eyre Basin and Channel Country landscape, and converting the land to an iconic national park...this fragile, arid desert landscape (including its extensive surface aquatic drainage systems) can be preserved and protected for posterity.

Such decisive action by our nation will send a potent and unequivocal message to the world that Australia is proactive in mitigating the anthropogenic impact on its natural environment and is genuinely committed to addressing the conservation of the biodiversity of this continent...and, most importantly...the elephant in the room, climate change.

Ordinary Australians crave visionary bipartisan leadership from strategic politicians, who possess intestinal fortitude and conviction, and your success in persuading your colleagues to support and facilitate the creation of the Lake Eyre Basin - Channel Country national park will be a totemic achievement for you personally...and a victory for our nation.

It is in the national interest that this land be preserved for the people and, with your assistance, history can be made.

On behalf of all sensible Australians, passionate about preserving our environment, I implore you to act.

Rod Moffatt

PO Box 588

Bribie Island QLD 4507

Ph:0417 995 485

APPENDIX- Q & A Question about Foreign Farm Ownership

Monday, 6 July 2015 Greece, Gags & Grazing Land
Panellists: Vrasidas Karalis, Professor of Modern Greek; Richard Marles, Shadow Minister for Immigration and Border Protection; Larissa Waters, Queensland Greens Senator; Trisha Jha, Centre for Independent Studies; and Greg Sheridan, Foreign Affairs Editor, The Australian.

Excerpt

TONY JONES: Okay, all right. Okay, all right. Yes, all right. So we’ve got to go to another question I'm told. It is from Louisa Vaupel.

FOREIGN FARM OWNERSHIP00:48:59

LOUISA VAUPEL: Yeah, my question was originally for Barnaby Joyce, Minister For Agriculture. I think it’s a shame he is not here to answer it but I will put it to the panel because I think we urgently need to talk about the future of Australia's food security and agriculture. I worked as a jillaroo for two mustering seasons on Glengyle station in western Queensland, which is a property of Kidman & Co and Kidman is one of Australia's largest beef producers. It's got 100,000 square kilometres. That's three quarters of the size of England, almost 2% of the land mass of the Australian continent, and for the first time ever, this farmland is up for sale for just $325 million. Interested bidders include State owned enterprises from the US, South America, Indonesia and China. And my question is should foreign State owned enterprises be allowed to buy up Australian farmland?

TONY JONES: Trisha, we will start with you.

TRISHA JHA: My view is that I'm basically in favour of foreign investment. My understanding, although I don't understand agriculture very well, is that the sector is in dire need of fresh capital. I'm open to suggestions that it may be very much contrary to the national interest, particularly in terms of national security to basically refuse an offer for a foreign state owned enterprise to invest in agricultural property in Australia but so far I haven't heard that case being made and so I am inclined to perhaps not share your concerns.

TONY JONES: Larissa Waters, should foreign state owned enterprises be allowed to buy up Australian farmland?

LARISSA WATERS: Well, thank you, Louisa, for your question and well done on working the land as a young woman. It would be nice to see more young women following in your footsteps. This is a vexed issue because, with the white paper being released today, foreign ownership is a key issue and the Foreign Investment Review Board have quite a high threshold for when they review what's considered in the national interest when there is a proposal for purchase by a foreign entity. When it comes to state owned enterprises, it’s a bit of a different kettle of fish and the Greens believe that we should not be selling Australian land, food producing land in particular, in this age of food insecurity, given the changing climate, to state owned outfits. So lower the FIRB threshold for foreign investment, yes, and apply that national interest test but I think, for state owned entities, the sale of food producing land look, food security is going to become increasingly problematic as the climate continues to change, which is why it’s such a shame that that agricultural White Paper released just earlier today, the fact that it's got five paragraphs on climate change towards the end of the book, what a tragic missed opportunity. It’s going to change the face of agriculture.

TONY JONES: Well, Barnaby Joyce is not here to make this point but no doubt he would, that there are elements of climate change action right through the entire report. That’s his argument.

LARISSA WATERS: Well, I wish that were the case. Certainly I’ve not seen any evidence of that. The other issue I want to raise in relation to food security is the fact that coal seam gas and coal mines can currently go onto our best food producing land and landholders don't have the right to say no. They don’t have the right to safeguard their aquifers. And I think that's a real shame and I’ve had legislation in the Senate to try to rectify that with no support so far.

TONY JONES: We’re going to stick with the actual question that was asked here and I’ll go to Greg Sheridan to hear from him.

GREG SHERIDAN: Look, this is a difficult question full of contradictory impulses. I am very uneasy about state owned enterprises buying agricultural land. The Prime Minister once said we don't believe in socialism when it is an Australian Government owning Australian enterprises, why would we want foreign governments to own Australian enterprises. On the other hand and there is also a big danger in convincing foreign governments that, in order to trade with us, they need to own our assets, whereas it’s much better if they just buy the things that we produce in a good market. On the other hand, we’ve kind of buggered ourselves up pretty badly in this country. We’ve made our cost structures terrible. We’ve put massive disincentives in the way of domestic investment and, you know, a system finds a way of coping with that. One way the system copes with our terrible insane cost structures is by sort of subleasing enterprise to foreign entities. We went through, in the resources boom, a period where we kind of became Saudi Australia. We paid ourselves more than we were really earning and we didn't like to do dirty, difficult, dangerous and demanding work and I think we need to get back to developing our own agricultural land. But I'm very uneasy about state owned enterprises owning Australian land.

TONY JONES: Vrasidas, what do you think?

VRASIDAS KARALIS: May I say that I agree with what's said because but we live in a period of globalisation and what we need from government is to regulate these markets, especially for state owned and want to buy something in Australia but, at the same time, I believe that we have to open up this economy because we can't have inward looking economies because essentially they are self consuming passions at the end and it is not enough anymore to feed a population as diverse as the Australian one simply with what is produced here. We are a consumer society, we have so many needs from all over the world, we have so many communities from all over the world, so multiculturalism becomes something very important in the whole mixture here but I think what we need is a government who will be able to regulate this market instead of regulating the secrecy about the refugees and have to pay more attention in this regulation of the market instead of looking to impose more sort of secretive legislation on these cases.

TONY JONES: And you’ve slipped off the topic and I’ll go to Richard Marles to get back onto it.

RICHARD MARLES: Look, agriculture represents one of the enormous opportunities for the Australian economy going forward. Being a food bowl for the growth of the middle class in Asia, particularly in China, is going to be a huge source of production and employment in Australia going forward but to make that happen, we are going to need foreign investment. Some of that is going to come from state owned enterprises. Now, at the moment, if you are a state owned enterprise, you need to go through the Foreign Investment Review Board. Invariably you get approval for that. I think that's appropriate. But, you know, for us to go out there and be trying to put more restrictions on foreign investment in Australia, I think, is a huge mistake. It is actually going to stifle the growth of what is one of the most important production parts of our economy going forward and, can I say, this Government has been completely hopeless when it comes to its regime around foreign investment. Rather than encouraging it, it has been discouraging, which is remarkable from what is meant to be a conservative government and it flies in the face of what's our economic opportunity in the future.

TONY JONES: Okay. Well, it’s been a great discussion. We are just about to run out of time. Our last question is on politics from Xanthi Kouvatas.

HUGE chunk of Victorian farmland - about 11 times the size of Melbourne's CBD - has also controversially fallen into foreign hands. Qatar-based Hassad Foods, which is the agricultural arm of the Qatar government, recently agreed to pay about $35 million for more than 8000 hectares of sheep-grazing and cropping land in Victoria's Western District.
Arab Spring uprisings in the Middle East and North Africa and bread riots in other regions - caused by record high food prices - have reminded governments of the cost of failing to guarantee domestic food security.

Qatar-based Hassad Foods, which is the agricultural arm of the Qatar government, recently agreed to pay about $35 million for more than 8000 hectares of sheep-grazing and cropping land in Victoria's Western District. As well as prized Kaladbro Estate in western Victoria and Queensland’s Clover Downs, Hassad’s burgeoning portfolio also includes 6800 hectares of sheep grazing land in Canowindra in New South Wales.

Hassad Australia - a subsidiary of parent company Hassad Food Group - owns 250,000ha, stretching from Queensland to Western Australia, which has been bought in the past three years.
It's been confirmed that big parcels of Western Australian farming land have sold to Middle East interests.
An “Australian”company, Hassad Australia Pty Ltd., backed by the Qatari Government, has bought 27,000 hectares.

There are three major land aggregations , five at Jerramungup in the south-east, three at Bindi-Bindi, east of Moora, and one at Esperance.

An additional HUGE chunk of Victorian farmland - about 11 times the size of Melbourne's CBD - has also controversially fallen into foreign hands. Qatar-owned Hassad Australia finalised its recent purchase lof 10 properties at Telopea Downs , on the border of Victoria and South Australia.

Food security fears

Fears about the planet’s ability to feed a projected 9 billion people by 2050 have driven much of the recent demand for land. Since 2007-2008 food price crisis triggered a flurry of export bans and restrictions by major food producers like Brazil, China, India and Argentina, Arab Spring uprisings in the Middle East and North Africa and bread riots in other regions - caused by record high food prices - have reminded governments of the cost of failing to guarantee domestic food security.

Australia for sale

A report released by the Australian Bureau of Agricultural and Resource Economics and Sciences in January found 11 per cent of farmland, 9 per cent of water entitlements and 1 per cent of agricultural businesses were owned by foreign interests.

Australia is the driest continent with irregular weather and is subject to natural disasters such as droughts and fires. We also have little more than 6% arable land, threatened by urban sprawl. At same time, our mining wealth is largely be consumed by the "nation building" infrastructure for our swelling population instead of being invested into the future.

With shallow policies and grotesque short-termism from Canberra, the public should be very concerned about any more land being sold to foreign countries.

Qatar's unsustainable growth

Qatar, an arid country of some 1.8 million inhabitants jutting off Saudi Arabia into the Gulf, can only produce about 10% of its food needs and is desperately reliant on imports. Currently, only 1.6 % of Qatar is arable land and agriculture only contributes 0.1% to gross national product, according to the FAO.
The government expects Qatar’s population to rise by 2.1% a year over the next five years, reaching 1.9 million in 2016.

Qatar’s population has more than doubled from around 614,000 in 2000 to 1.699 million at the end of 2010. Qatar's oil and natural gas industries account for 50 percent of GDP, 85 percent of export earnings and 70 percent of the government's revenue.

As well as food security, air, water, and land pollution are also significant environmental issues in Qatar. In addition to smog and acid rain, the nation has been affected by the air pollution generated during the Persian Gulf War. Pollution from the oil industry poses a threat to the nation's water.

There's nothing sustainable about Qatar's environmental/population growth record, so why should they bother with any such issues in their Australian property buy-ups?

Water security

Qatar's water consumption has tripled in the last seven years, the energy and industry ministry and chairman of the Permanent Committee on Water Resources has said. Per capita consumption of water in Qatar is 460 liters per day, one of the highest in the world, and the production of desalinated water in Qatar doubled four times over the past two decades.

Most native species are small, but the larger, diurnal species, like the Arabian oryx, gazelle and ibex, have been hunted down to extinction. The Arabian oryx, al-maha in Arabic, is Qatar's national emblem. It was once believed to have been hunted down to extinction, but some herds have survived outside Qatar.

December 03, 2011 - At least 25 special permits have been issued to dignitaries belonging to the Arabian peninsula allowing them to hunt the internationally protected Houbara Bustard (Chlamydotis undulata) during the hunting season 2011-2012. The permit holders include at least three rulers, many crown princes, and other members of royal families. The houbara bustard is a very shy bird species and inhabits arid areas away from human population, but at least one of the permit holders, belonging to Qatar, has been allocated the city of Dadu in Sindh for hunting. The Qatari Government is currently in the process of reintroducing the Arabian gazelle, which is near extinction, to its desert domain. Before 2001, when Qatar signed a key international treaty, known as Cites, restricting trade in endangered animals, it was not illegal to import rare animals.

Marine desert?

Experts have sounded the alarm over a massive decline in the number of sharks populating the waters around Bahrain - saying the Gulf was in danger of becoming a "marine desert". Many larger species of the sea's most famous predator were in danger of disappearing from the region altogether. Unchecked construction, sedimentation, a lack of fresh water, overfishing and pollution have been cited as the key threats to the Gulf's shark population.

Experts are now warning the Gulf could actually become a "dead" area of water unless urgent legislation is passed in all countries bordering it, with decades of rapid development taking a huge toll on the marine ecosystem.

Qatar Summit

Qatar, the first member of the Organization of Petroleum Exporting Countries to host the discussions later this year aimed at limiting global warming, illustrates the scale of the challenge the world faces to cut greenhouse gases.

European Commissioner Connie Hedegaard, a representative responsible for climate change action, feels that Qatar being the host of this year’s summit has the potential to play a positive role in shaping the international climate change debate. If Qatar will show that [although] the rest of the world has seen it as a sort of traditional oil economy, that there they [are starting] to diversify, there you find smarter solutions, there you start to apply solar or other kinds of renewable energies and it will not harm your economy - as a long-term strategy it will benefit your economy.

The irony is great: Climate Change negotiation in Qatar will take place atop vast natural gas deposits and in a country with the highest per-capita greenhouse gas emissions in the world, almost three times those of the United States.

Australia's food security first

With Australia's food security not as secure as supposed, then this sale is a betrayal by our government. Our sovereignty should be promoted, not sold off to the highest bidder. Australia is now a net importer of horticultural products, whereas it was a net exporter only a few years ago.  Wheat, dairy, fishing and sugar production are all down from their previous peaks. 

Earlier detailed research by researcher Dr McGovern, lecturer in the Queensland University of Technology’s school of economics and finance, found that Australia exports only around 25 per cent of its agricultural produce at second-stage production, not 80 per cent as has often been supposed.

There's a great international market opportunity for an increase in food production in Australia, but there's no explanation on just this feat going to be achieved, especially if climate change scientists are correct and our food chain is increasing out of our hands.

The Government claims it applied a rigorous national interest to all foreign investment applications.
The spokesman Assistant Treasurer, David Bradbury, said foreign investment could help Australian companies and farmers gain access to new export markets, grow their businesses and create jobs. The exports will be to the Middle East and jobs will be lost as Australian farmers will struggle to compete with big monolithic agricultural foreign government-endorsed businesses. The food will not be for Australians but for their own people.

Population growth has exploded in the Middle East and there are cultural limits to facing the problem, so they are seeking out resources in countries like Australia with poor leadership and permeable borders.

Nationals senator Barnaby Joyce said "under the current tutelage of Wayne Swan we can totally rely on the fact that this purchase, (purchase of 10 properties at Telopea Downs) like every other purchase that has ever been made, will never be stopped".

Information from the West of Elgar Group (WERA) shows what could happen in your street. So keep alert just in case. The developer is an overseas company and the development is being advertised overseas. The size of some of the units indicates they may only be of interest to the overseas student market. In Surrey Hills, close to Wattle Park tram terminus, and far from shops, developers are buying cheaper land in our local streets. VCAT has just approved an application by an overseas consortium for 32 apartments in such a street. Three development applications for this site have been knocked back. This one breaks rules set for the others. Where is the sense or the justice in this?

28-34 Boisdale Street Surrey Hills

Local residents have spent an immense amount of time and effort since 2009 in an attempt to preserve the character and amenity of their neighbourhood.

The planning void left after the Brumby Government’s Melbourne 2030 disappeared has yet to be replaced with a clear planning policy by this State Government. As a result , out here in Surrey Hills, not far from the Wattle Park tram terminus, and not near any shops, developers are buying cheaper land in our local streets.

VCAT has just approved an application by an overseas consortium - the Ever Bright Group - for 32 apartments in such a street. (The neighbourhood consists mostly of houses, plus occasional units and town houses.)

Previous applications knocked back; how is this one better?

The first application [2009-10] was refused by both Whitehorse Council and VCAT.

The second application had much the same footprint, and in fact, the number of units was INCREASED from 27 to 32.

Whitehorse Council again refused this application outright as it failed over 14 sections of the Whitehorse Planning Scheme and it was contrary to the neighbourhood character objectives and standards of the scheme

Despite this, and the fact that the site is nowhere near an activity centre, and over the objections of 150 local residents, VCAT approved this application .

In order to set aside the Whitehorse Council's decision, the tribunal became a de facto Planning Authority - inserting a number of conditions including structural deletions, alterations to the ramp and garage, and alteration of the footprint of some 2800mm.-this will require yet another re-drawing of the plans#. In addition it allowed some of the factors which the previous tribunal had rejected!

# In effect, the resulting plan will be different from that originally put to the Council, and they will have no say in it!

Dark towers

Further, the proposed building is no architect’s delight. Most of the units will be very small (some only the size of a double garage- 55 sq m) and a fair percentage will never receive any direct sunlight (as they are entirely south facing) nor will the building’s limited communal open space receive any sunlight after the equinox.

This result has been bad enough, but now there is an application for over 40 units in another short street nearby. Already there are cars parked overnight in both streets.

All this can still occur because the planning community is in "No-man's-land", where M2030 is no longer valid, but a definite new planning policy has yet to be pronounced.

No activity centers here yet big appartment blocks planned

This means that despite the fact that Matthew Guy has stated repeatedly that higher density developments should be "limited to activity centres", developers are still able to use local streets to take advantage of the planning void.

We desperately need a co-ordinated planning system, not just these ad hoc decisions.

Community and developers need to have certainty.

Surely by this time we could expect better outcomes for the community from our current State Government.

Source: Elizabeth Meredith
West of Elgar Residents’ Association Inc.
W E R A
A.N.:A0031410U

This advertisement from Kuala Lumpur shows how development companies are not only selling Australian houses in Asia but are offering Australian taxpayer-funded government grants to further entice Kuala-Lumpurans to buy here. These grants were intended to help young Australians get into the housing market but instead the developers are offering them to foreigners. The ad is for housing in the Whittlesea area of Victoria, but the reality is that the same thing is going on all over Australia.

How can politicians tell us we have a housing shortage? If we did, they could sell the houses here and not have to go to foreigners. Why is the government allowing this land way out of town to be built on at all and then sold to foreigners?

We are being taken for fools.

This ad has been sent to Matthew Guy, the Victorian Minister for Planning, and to a local federal mp. How about sending it to your MPs as well, if you feel it is wrong.

The advertisement says, "Hurry, get the AUD$13,000 Australian Government Grant." Foreign buyers can also save on stamp duty.

Whittlesea is just north of Mill Park, where wildlife activists and residents unsuccessfully tried to stop government slaughter of displaced kangaroos last year. To get to Plenty Road from the city you pass through some of the densest populations in the world, and then past endless suburbs, many of them only built within the last two to five years. Wildlife activists have deplored the fate of wildlife as the greedy developers and complicit state governments have turned a blind eye or aimed a gun. Residents have watched in horror as completely undemocratic decisions have been made to maim and mutilate the countryside, overpopulating it, rapidly increasing demand for services and resources, driving their prices beyond the reach of all but the well-off. At the same time, salaries are not increasing but job insecurity is increasing. Australians have little slack and nowhere to turn except to demand that their MPs start to represent them and stop this abuse of the system.

Whittlesea residents need to take out an ad in the Kuala Lumpur paper where this offensive ad for Whittlesea land and housing was run. The ad should politely inform Kuala Lumpurans of the situation and that Australians did not agree to have their taxes used to facilitate foreign investors making the situation worse for wildlife and for the homeless and the mortgage-burdened.

Contact your local MP and ask him/her what he is doing about this further pressure on the green wedges and on housing prices and this funelling of Australian taxes into foreign purses. Then write to candobetter.net as a comment to this article and tell us what your MP's answer was. We will publish it. Exert pressure. The situation is unacceptable. It is scandalous and has population impacts which may lead to ordinary Australians becoming destitute due to inflated power, land, and housing costs within the foreseeable future.

Real estate speculation occurs on previously unknown levels via the global Internet, with rapid convergence and mushrooming of of speculative industries and professions across government and private sector. At Federal level, the National Foreign Investment Review Board (NFIRB) promotes foreign investment in local real estate and encourages housing purchases by temporary immigrants for high turnover. Local realtors tout Australian property internationally, using private migration agents and local solicitors. At State level (where land use planning laws are made), organizations like the Property Council of Australia (PCA) are closely involved with determining government policy. The Australian citizen has less and less say in any of this.
Illustration a collation of old icons from sites encouraging foreign investment and immigration.

Consequences for the economy of big rises or drops in housing prices

Various convoluted explanations exist for why high land prices (= land/housing prices) would not affect general inflation. These arguments do not hold, however, when a major factor in inflation comes from outside the local economy. In this article I draw attention to the likely impact of the addition to the Australian property market of more and more home buyers and property investors purchasing from overseas using foreign currency that has greater value than our local currency. Some may be from poor countries but they may also be among the world’s richest citizens.

Australia as a Pacific Island economy with little protection for citizens

The impact ressembles the effect of first world tourists on a third world economy.

Prices go up to meet the pockets of the tourists and locals are priced out of the market and reduced to living from a sort of fringe economy, as the more lucrative tourist economy takes over. Those locals that have held onto property are able to interact with the foreign-based currency holders on a more equal footing, since their assets have benefited from the
inflation. They become the elite. Rentals, like hotel prices, go up way past the affordability of the bulk of the locals, who are more and more marginalised. The rents still seem quite cheap to the tourists and foreign residents as long as these foreign residents hold substantial foreign currency and as long as their currency remains better than the local currency, or they remain wealthy by world standards.

A better system of land-tenure does exist, but we don't have it

The continental European (Napoleonic) system developed in France after the Revolution does protect citizens from this kind of impoverishment.

First world tourists will often complain about the outrageous prices of everything in tourist-affected economies like Noumea, French Guyana, the Seychelles etc. It is not so easy in these places to find little indigenous hotels where you may stay for a
song, and dine at little cost. At least one of the reasons for this is that in the overseas French territories the French system safeguards adequate public housing at affordable prices, as well as prioritising the employment of locals, the education of locals, the health system for locals, and unemployment benefits etc. This means that much of the earnings from foreign currency are passed on throughout the economy and to most of the population. So, whilst prices remain so high that only the rich really tend to stay in French resorts, the locals have sufficient incomes for them to be able to live within that economy without becoming marginalised into a secondary economy. This is a source of frustration to those who expect all resort economies located in third world areas, like the South Pacific and the Caribbean, to provide for cut-rate tourism. It is, however, a great thing for those who actually live on the islands.

Unfortunately Australia has a bad land-use planning system which leaves its citizens vulnerable.

Globalisation of Australian real estate

Real estate speculation has been made possible on a level never previously conceived of due to the global Internet, through property dot coms like the media-owned www.realestate.com.au and www.domain.com.au. This has permitted rapid convergence and mushrooming of speculative industries and professions across government and private sector. We have at the Federal level, the National Foreign Investment Review Board (NFIRB) ramping up foreign investment in local built and off-the-plan real estate and facilitating built housing purchases by temporary immigrants for high turnover. On the local level we have realtors touting local property internationally with the assistance of private migration agents and local solicitors. At State level (where land use planning laws are made), organizations like the Property Council of Australia (APC) are closely involved with determining government policy.

Australians as islanders without effective rights of citizenship

Australian citizens are in the same predicament as the indigenous populations of small pacific island colonies when international developers decide to turn them into resorts and start building hotels and up-market housing. Resources and ammenities become limited commodities which only the rich can afford, and pretty soon the locals are barely subsisting in shanty-towns.

In the late 1980s people started to see that what was happening to Australia was the same thing that happened in Hawaii, where real-estate prices are notoriously high and related to the presence of a high volume of foreign investment capital.[10] During the pre-internet hike in Australia's land/house prices, beginning around 1988 and following the highest total net immigration in Australia prior to the current record-breaking period (2006-), there was an out-cry. The Australian government responded by barring foreigners from purchasing established dwellings in September 1987.

Urban researcher, Peter Rimmer[11] observed, however, that this did not prevent "Australians living abroad, immigrants with permission to settle permanently in Australia, and foreign companies seeking accommodation for executives from purchasing residences."[12]

Continuous erosion of our foreign investment laws

Subsequent amendments to the Acquisitions and foreign takeovers Act (1975) have considerably watered down even these weak protections.[13] The FIRB now seems almost to be leading the charge in touting Australian real estate to foreigners with superior currency.[14] Foreigners on short-term visas, such as students staying for one year, are positively
encouraged to purchase established dwellings, providing they sell them when they leave at the end of one year. Short-term immigrants also provide a good market for rentals. The effect of this rate of turnover on land/housing prices must be hugely inflationary. A strong indication that it is considered a source of big money by the speculative real-estate suppliers to the market is the aggressive promotion of this opportunity for purchasing Australian real estate by migration agents with real estate and legal firm connections on the Internet.[15]

The 1973 Oil Shock

These trends to opening up Australian real estate and other equities began after the 1973 oil shock, in 1975, with Prime Minister Fraser. From less than 10% in 1972-75 under Whitlam, foreign investment in Australia increased to 49% of GDP in 1990-91. By 1986 more than half was destined for real-estate investment.[16] Prime Minister Fraser initiated a long series of amendments of the Australian Foreign Acquisitions and Takeovers Act (1975) with the effect of increasingly facilitating foreign investment in property development and real estate.[17]

In post-oil shock Japan opportunities for newly formed construction companies and developers shrank. Rimmer wrote that those major Japanese construction companies, which had been hurt by policies of zero public sector growth, preference for regional contractors, and sluggish private sector activity in Japan, particularly through fiscal policy in the early 80s, adapted to the situation by seeking work in other countries. They brought with them the funds invested by Japanese investors and banks, offering "the most favourable fixed price" and "to take an equity in the project if necessary, arrange loans at low interest rates from financial institutions in Japan or Australia" and guaranteeing "any money required if the project [went] over cost".

Australia, which was keen to attract major projects during the recession of the late 1980s, largely in the hope of job creation, responded to these inducements. Australian States vied with each other to attract these Japanese construction projects, many of which were in real estate. [18]

Rimmer wrote that "keen for the economic benefits and political spin-offs, the states, as we have seen, are prepared to override the usual planning role performed by local government of directing development into preferred locations to meet economic, social and spatial preconditions."[21]

This obviously remains the case.

The other consequence of concentrating investment on the property development/housing sector is that a growing population provides an easy, constantly increasing market for raw materials produced here, but for cheap imports produced overseas. This perpetuates the many problems associated with a commodity bound economy, dooming us to ever increasing foreign debt, with a widening rather than deepening economy, restricting our skills and systems bases.[22]

NOTES

The notes begin at [10] since this article adapts extracts from another document.

[10] In a land-planning system with many of those hall-marks of the US system.

[11] Peter J Rimmer, "Japanese construction contractors and the Australian states: another round of interstate
rivalry", in the International Journal of Urban and Regional Research, E. Arnold, London, Vol.12., no.3.,
pp.404-24.

[12] Peter J. Rimmer "Japanese construction contractors and the Australian States: another round of interstate
rivalry", op.cit., p.421.

[13] Information about these changes to The Foreign Takeovers Act )1975), now known as the Foreign Acquisitions and Takeovers Act (1975) over time is available from the Foreign Investment Review Board in appendixes to its Annual General Reports, which are available on internet from http://www.firb.gov.au/policy_pubs/publications/AnnualReports/1999-2000/appd.htm Note that the Act is not confined to property investment but this seems to be a large part of its business.

[14] www.escapeartist.com/australia, which is an immigration and property investment internet site, announces, “Expatriates Build Wealth in Australia - The Aussie dollar is at an all time low against the American dollar and the strong Pound Sterling. Consequently there is strong purchasing power for Expats and UK residents in Australia. Australia welcomes foreign investment in real estate. Overseas investors can therefore obtain the benefit of freehold title. …”

“To take advantage of this, major developers such as Central Equity apply to the Federal Government Foreign Investment Review Board to gain permission to sell their residential apartments to foreign investors prior to releasing their development to the public.”

[15] Here are some examples of these kinds of internet sites. Migrate Australia www.migrate-australia.org/ are owned and operated by My Great Australia Pty Ltd. Like many members of the Migration Institute of Australia, they deal in real estate, finance and conveyancing, as well as arranging all sorts of visas and providing legal advice.

Some others are: www.James Tan Immigration lawyer.htm, www.escapeartist.com/, which has pages for many other countries in the world and www.australiaforyou.com.au. Australia For You has remarkable graphics. In fact many of these sites are graphically innovative, information packed, multi-lingual, specialise in a particular language, may offer a specialty, such as romantic introductions, and seem impressively connected and serviced. They generally lead with the information that they have registered immigration agents on board.

[16] R.H. Fagan, "Foreign Investment", in Australian Encyclopaedia, Terry Hills, NSW, Australian Geographic, Pty. Ltd, 1995, p.1394. For more about the FIRB, see S. Newman, The Growth Lobby and its Absence, Op cit., Chapter 3 heading, “The Residential Construction Industry”

[17] Information about these changes to The Foreign Takeovers Act )1975), now known as the Foreign Acquisitions and Takeovers Act (1975) over time is available from the Foreign Investment Review Board in appendixes to its Annual General Reports, which are available on internet from http://www.firb.gov.au/policy_pubs/publications/AnnualReports/1999-2000/appd.htm or see more current information here. Note that the Act is not confined to property investment but this is a major part of its business.

[18] Rimmer, Op cit p. 405 and 418.

[19-20] These notes are not used here.

[21] Rimmer Op Cit., p.417.

[22] “Going for Growth – Business Programs for Investment, Innovation and Export”, also known as “The Mortimer Report”, to the Federal Minister for Industry, Science and Tourism, Australia, 30 June, 1997. The Mortimer Report drew a distinction between absolute growth and per capita growth. It pointed out that economic growth resulting solely from increased population serves no economic purpose. The true measure of economic progress, the report stated, is economic growth per head of population. That being the case, the Mortimer Report declared its brief to recommend measures that would enhance per capita economic growth.

Taking its data from OECD reports, the Mortimer Report found a negative correlation between per capita GDP and population growth over the period 1970-1995.

A paper correlating population growth rate and per capita economic growth rate was prepared by Dr John Coulter for the 2003 ISOS conference on sustainability. For the purpose of his analysis, Coulter divided the countries of the world into two groups, rich and poor. For each group, he correlated per capita GDP growth with population growth, using rigorous statistical techniques. He found that for rich countries absolutely no correlation between per capita GDP growth and population growth. For poor countries, the correlation is strongly negative: the higher the population growth, the poorer is the country.

For countries like Australia that rely on their resource base for their income, the argument is particularly significant. In 1860 about 70% of the country's exports were mineral and agricultural products. Almost the same ratio applies today. For Australia’s situation, the more specific question than what do countries have to win or lose from population growth is - what does a country with a commodity-based economy have to gain economically from population growth?

The answer to this question lies in the external trading account. For population growth in commodity-based economies:
• almost no relation at all exists between exports and population.
• an almost linear relationship exists between population and imports.

Extreme cases often make telling points. A country which is entirely reliant on commodity exports and has an extreme level population growth may reveal an outcome that a less extreme country might achieve at a more leisurely pace.

Saudi Arabia is an extreme example of a commodity-based economy experiencing excessive birth rate. Saudi Arabia earns over 90% of its export earnings from products based on one basic commodity – oil. Saudi Arabia’s rate of population increase is about 4% per annum. Saudi Arabia’s population is doubling in less than every twenty years. Half the population is under 15 years of age.

For more on this see S.Newman for SPA VIC First Home Affordability Enquiry Submission.