Keith Thomas writes: Re. “The crisis in our housing markets” (yesterday, item 2). David Imber is right to point to the self-seeking publicity from the real estate industry. I’d like to add that the emotional term “home” and the more neutral one “house” disguise the fact that the largest component in domestic property prices is often the land. Travelling through country Victoria over Christmas I saw many houses in agent’s windows half or even a third the price of otherwise equivalent properties in my city, Canberra. The reason that the city properties cost more is simply demand – that is, their value derives from the proximity of services and employment, not the hardware that goes into their construction. House prices are rising, too; not because of better hardware, but because of demand. What we need to do is to slice off this unearned value increase and return it to the people who created it (the Australians who provide the demand and the services), not allow it to slip unremarked into the pockets of “property developers” and “investors”. Despite the logic of this solution, do you think it will happen? No way – almost every legislator in this country has property investments and is counting on pocketing some unearned value for themselves – the parasites. The Tenants Union is probably one of the few places to look for unbiased policy advice in this area.

John Mant writes: Re David Imber’s comment on the crisis in our housing markets. There is always a housing crisis. When the industry is not busy, the “crisis” demands more government assistance to further distort of the market. Much the same demands are made when the market is overheated and first home buyers are missing out. David Imber mentions distortions in the rental markets but fails to deal with the unmentionable (except by the brave Professor Julian Disney) distortions in home ownership market. Even very large members of the big end of town could not ever use all the housing space they buy in places such as Sydney Harbour’s foreshore. But they are not financial fools. They know no other investment will return as much real money; not to say the added advantages of the “mine’s bigger than yours” kind. No capital gains tax at all; no tax on the imputed rent; generally low property taxes – reflected in NSW at least by the rundown in investment in the community’s infrastructure. With a clever accountant you can continue to live in your five bedroom house worth millions and get subsidised rates from your pensioner status. No wonder the kids want granny to stay in the family house. If she sold it she would lose the pension and capital gains tax would have to be paid on the alternative investment. Home owners and buyers will almost always be able to outbid renters in the market. There are some bright points: At least in the 1970s we beat off an attempt, amazingly by the Left, to solve one of the emergencies of that decade by allowing tax deductibility for interest on home loans. And Cossie’s recent, extraordinarily generous, tax benefits for superannuation retirees and the opportunity to contribute a million this year and sizeable amounts in later years should see more about to be retirees prepared to bail out of their over-large houses into smaller ones, thereby reducing the number of unoccupied bedrooms, which are such a feature of our more expensive suburbs. And it is not just the Commonwealth without a Housing Minister. Most of the State Ministers are really Ministers in charge of the Public Housing Corporation. Housing policy amounts to public housing policy. Which leaves the field wide open to industry manipulation.

Alan Hatfield writes: It is good to see someone at last (in this case, David Imber) saying that housing does not need to be unaffordable – unless of course your main political appeal is to those that have already bought their houses and are vitally interested in them increasing in value as fast as possible without any concern for those who have not yet bought their houses. As David says, “It is a fact, widely accepted even by industry, that the Howard Government has contributed to record high house prices and skyrocketing rents by halving the capital gains tax in 1999. It has also refused to consider targeting the almost $18 billion in tax breaks enjoyed by wealthy property owners to ensure that investment in low cost affordable housing is preferred.” The other critical factor that David hasn’t mentioned is the lack of capital gains tax on the primary family home. I well realise the politically incendiary nature of any proposal to remove or reduce this very costly concession to so many voters. But we should at least recognise the impact of this policy even if there is a feeling there is nothing we can do about it. Imagine the different approach to home upgrades and extensions that would occur if all capital gains on our homes were fully taxable (or even, as at present, just half taxable). The only solution I can see – accepting that the impacts of the non-CGT regime for our homes are significant and the distortions in effective national investment trends massive – is the introduction of a “creeping” CGT regime for family homes with no “grandfather” clauses! For example, CGT could be applied to just 1 or 2% of the value of any home sold in, say, 2008, to 2 or 4% of the value of any home sold in 2009 and so on until we reach full CGT in 50 or 100 years time or just half CGT (as everything else currently is) in 25 or 50 years’ time. There may well be other options but the key need is to plan to remove the non-CGT distorting situation that currently exists in our national housing market. Our future as a nation in today’s world means that we need to insure that we have the most effective and least distorted market for investment that we can. It is our future that is at stake!

B.J. Prescott writes: On reading you thoughts on property prices today, I feel that the Federal Government’s first home owner’s grant has only helped in the rise of house prices – either by builders knowing they can add this to the contract price; or by home owners and real estate agents adding that amount to the selling price knowing that first home owners will pick this amount up from the federal government. I personally do not think that it is a good idea at all and never have agreed with it.

Ian Lowe writes: Christian Kerr, characteristically misinformed, said in Crikey yesterday (item 7) – “Environmentalists have form – the horror stories of the Club of Rome that told us by the 1980s mass starvation would stalk the Western world and we would exhaust supplies of basic minerals. They were lies.” Well, yes, those stories WERE lies, but they weren’t told by environmentalists but by economists, politicians and conservative commentators. What the Club of Rome ACTUALLY said was that if the growth trends existing in 1970 in population, resource use, agricultural production, manufacturing output and release of pollutants were all to continue, we would reach limits within 100 years. They added that none of those trends was inevitable and it was entirely possible to redirect human development onto a sustainable path. Those who didn’t read Limits to Growth spread the sort of ridiculous assertions now being parroted by Christian Kerr. I suppose it was equally characteristic to suggest that the lame endorsement of nuclear power by Switkowski will be in the Prime Minister’s “bottom drawer”. Could Mr Kerr do some basic reading before he contributes more embarrassingly misinformed pieces to Crikey?

Alison Reeve writes: Re. Christian Kerr on Nukes report. I have always suspected that Christian Kerr lives in a parallel universe and now I know it’s true. How else could he know for sure that “horror stories of the Club of Rome that told us by the 1980s mass starvation would stalk the Western world and we would exhaust supplies of basic minerals” were lies? It’s not possible to say whether they would have been right unless you can construct a parallel universe where their advice was utterly ignored. These “lies” didn’t happen because society responded to the “horror stories” with technology and policy.

Dr Peter Wood writes: So the PM can point to the role carbon based industries play in underpinning our lifestyle. With Australia having per capita GHG emissions higher than the United States, that is certainly the case. While we are all debating nuclear power, little is mentioned about the State and Territory governments discussing a National Emissions Trading Scheme. John Howard has consistently failed to address the market failure that leads to climate change in the first place, the lack of a carbon price signal, which leads to costs being externalised. An emissions trading scheme will be likely to reduce Australian GHG emissions quite significantly at minimal cost. Unfortunately at the moment the plan is for carbon permits to be given for free to carbon intensive industries such as aluminium production, while less intensive industries will have to buy them through an auctioning process. Such free allocations will distort incentives and further subsidise carbon intensive industries increasing abatement costs.

John Kotsopoulos writes: Re. “Brown’s bid for a Senate deal” (yesterday, item 5). Bob Brown’s overtures to the Labor Party are a refreshing change from the vapid “pox on both houses” rhetoric emanating from the Greens and the political left over the last decade which has only served to help keep the Great Prevaricator in office.

Max de Mestre-Allen writes: Re. Hicks. He was caught training with the enemy. If you lie down with dogs you get fleas!

David Murtagh writes: David Hicks wanting to come home is like a bank robber getting caught and then saying he doesn’t want to be a bank robber anymore because getting caught doesn’t make it fun. Tough. Hicks wanted to live a Boy’s Own Adventure: he wanted to play soldier; he wanted to live with and fight for guerrilla armies; he wanted the full soldier-of-fortune experience. But now that he’s facing the consequences of his actions he cries that playtime’s over and he wants to go home? The game doesn’t work that way. He got his wish! We should be happy for him! Congratulations, David, you’re living the dream.

Vince Taskunas writes: Mark Bahnisch’s contributions to Crikey are very readable and generally well thought out. However, to suggest (yesterday, comments) that “Catholic political thinking hasn’t made an enormous mark” [in Australia] is to deny, for example, the significant role that Catholic political activists such as then Catholic Archbishop of Hobart, Dr Guilford Young (later KBE) played in the state aid for non-government schools debate. As recently as the last Federal election campaign, the ALP went to the electorate with a policy that, at its heart, sought to alter this previously agreed consensus. Sections of the union movement continue loudly to deny the validity of state aid for schools like those auspiced by the Catholic Church. It was, at the time, a historic shift in public policy that was driven by a number of prominent Catholic political thinkers – and a shift that still has resonance in the Australian polity in 2007.

Kristian Karamfiles writes: Re. “Twenty20 cricket: ratings behemoth” (yesterday, item 14). Glenn Dyer’s comments in his regular Channel Nine bash seemed to imply that the KFC Hit-and-Giggle last night was shown live into Perth: “the game started at 5.30pm local time and finished after 8.30pm”. Glenn, we haven’t seen live limited-overs cricket in Perth on a weeknight since Dennis Lillee brandished an aluminium bat. It’s always on a two or three hour delay so that the innings break is conveniently at 6-7pm. Which is a massive relief, because what would we do if we missed out on the nightly “news” and A Current Affair. Heaven knows, we might get trapped by a dodgy builder, not be able to lose 25 kilos in two weeks, and not learn that sugary cool drinks are bad for our kids’ teeth.

Matthew Newham writes: Re. Twenty20. It’s unsurprising the Twenty20 match rated so well; just look at the drivel that the other networks were running at the same time. Love it, hate it? For me, Twenty20 is okay but I still prefer the 50 over version. What I do, however, take offence to is the continued (and growing) habit of commentators telling me how great it is… how entertaining… how exciting. Sure, I know it’s their job to sound enthusiastic but, really, Tony Grieg, I don’t need you to constantly tell me how excited I should be feeling watching the game. When are they going to bone some of the older commentators…

Diana Simmonds writes: Re. Brett Lee sings Hindi (9 January, item 20). Whatever John Addis knows about Brett Lee, he knows zip about Asha Bhosle (note spelling!) The great and glorious Asha Bhosle is no more “a sort of Indian Charles Aznavour” than I am a sort of Australian Rita Hayworth (sadly). For starters, she is a woman, for seconds, she’s probably the most famous songstress ever to supply the voice of Bollywood musicals and finally, she’s visiting Australia any minute in company with Kronos Quartet.

Send your comments, corrections, clarifications and c*ck-ups to [email protected]. Preference will be given to comments that are short and succinct: maximum length is 200 words (we reserve the right to edit comments for length). Please include your full name – we won’t publish comments anonymously unless there is a very good reason.

Peter Fray

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