Mannkal Economic Education Foundation

Mannerisms

Canberra - always good for a laugh! (Pay attention; it’s your money.)

Ron Manners, 1 April 2016
Check out the author's latest book at www.HeroicMisadventures.com

Evidence abounds to show how Canberra suffers from a ‘spending disease’ (it is not a ‘revenue problem’ as they claim).

In their reckless spending (in self-serving pursuit of re-election) they are currently borrowing at the rate of $100,000 million per day (much of which pays the interest on their / our current debt.

Any ‘responsible household’ or ‘business proprietor’ would take some action to avert disaster, so you may be bewildered at Prime Minister Malcolm Turnbull’s latest extravagance …….

  • Clean Energy Innovation Fund ($1 billion down the drain).

Previously to be abolished.

http://www.environment.gov.au/minister/hunt/2016/mr20160323.html


  • Clean Energy Finance Corporation ($600 million)

Previously to be abolished.

http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bld=r5288


  • Australian Renewable Energy Agency [A.R.E.N.A.] ($2.357 Billion)

http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bid=r5287

You might be excused for wondering if these three expensive entities will deliver results. Will energy be cleaner?

This is the wrong question, we should ask, “where does the money go?”

I challenge any investigative journalists to find out who the lucky recipients of the $1 billion which has already been spent by A.R.E.N.A. and the further $1 Billion from the forthcoming Clean Energy Innovation Fund and the other odd $1 Billion or so.

Such an investigation would confirm that ‘politics is broken’ in Australia and despite the best efforts of Australia’s seven, principled politicians, we are still losing ground.

Good economists study Public Choice Theory which explains ‘concentrated benefits’ (flowing to the few beneficiaries vs diffused costs, spread over many unsuspecting victims).

Those lucky recipients ‘work their butts off’ to ensure that legislation tilted in their favour pass effortlessly through Parliament, whilst the rest of us numbered in the ‘unsuspecting victims’ category don’t stir ourselves to burst into print or march in the streets.

Public Choice Theory (PCT) explains why so much bad legislation has such an easy ride through Parliament.

The noted economic philosopher, Thomas Sowell, describes this phenomenon …….

“No one will really understand politics until they understand that politicians are not trying to solve our problems.  They are trying to solve their own problems – of which getting elected and re-elected are number one and number two.  Whatever is number three is far behind.”

Anyone with an understanding of Public Choice Theory can start their own collection of ‘the birth of bad laws’.

Isn’t it surprising, with the government designed educational syllabus, that all, but one, of Australia’s universities have abolished teaching Public Choice Theory?

Ron Manners


The Intergenerational Report 2015, produced by the Treasury Department, stated that: “The Australian Government is currently spending over $100 million a day more than it collects, and is borrowing to meet the shortfall.” (Intergenerational Report 2015 Executive Summary, page xv).

Bob Day; Cory Bernardi; Gary Gray; Andrew Hastie; David Leyonhjelm; James Paterson; Tim Wilson (endorsed).

Too many laws = too many criminals

Ron Manners, 4 March 2016
Check out the author's latest book at www.HeroicMisadventures.com

Perth is not the only civilized city faced with a criminal epidemic, with law courts and prisons at bursting point.

I’m sure there are many reasons for this, but could one reason be that too many laws (many outdated) produce this abundance of ‘criminals’.

Over-criminalisation’ could result from placing so many criminal prohibitions on the books.  Many well-meaning people can be swept into the criminal justice system for behavior that most would consider unobjectionable.

“Okay”, you say, “name me some examples?”

So here are two:-

1. Illegal flag pole?

An elderly Baldivis couple are dumbstruck Rockingham council has told them to pull down their flag pole because the pensioners didnt get planning approval.   Val and Bill Ashman put up the flag pole at their home three years ago and proudly raised the Australian flag every day without any problems.

An elderly Baldivis couple are "dumbstruck" Rockingham council has told them to pull down their flag pole because the pensioners didn't get planning approval. Val and Bill Ashman put up the flag pole at their home three years ago and proudly raised the Australian flag every day without any problems.

I put this ‘WAtoday’ article on my Facebook on Feb 5 and it was flooded with support comments in favour of Mr & Mrs Ashman.

My Facebook comment was …

“If the Rockingham Council fines these proud Australians; then I offer to pay that fine.  They should receive a medal, not a fine!”

2. Growing too many potatoes!

Well known W.A. potato grower, Tony Galati, has been risking jail since 2011 for growing more potatoes than the government thinks he should.

Instead of prosecuting this productive individual and his efforts to serve his community, the State Government should have nominated him for Australian of the Year 2016, instead of this year’s absurd outcome. [http://www.mannkal.org/mannerisms/?p=651]

Furthermore, there is an unintended result of this ridiculous potato law.

This law has turned Tony Galati into a celebrity and he was a popular guest at a recent youth gathering (see below).

Tony Galati meeting on the steps of W.A. Parliament House with young Western Australians from the Young Liberal Movement and the Mannkal Foundation)

Tony Galati meeting on the steps of W.A. Parliament House with young Western Australians from the Young Liberal Movement and the Mannkal Foundation)

Are there any law students who might consider taking on the project of trawling through the law statute books to produce something of a comical catalogue of statute stupidity?

Further rich pickings could be found by identifying all ‘victimless crimes’ where it might be said that without a victim there can be no crime.

Perhaps a worthy project?

Ron Manners

Australia Day and Australian of the Year, 2016

Ron Manners, 29 January 2016
Check out the author's latest book at www.HeroicMisadventures.com

Australia Day and Australian of the Year, 2016

They must be dreaming!

The uproar caused by the choice and comments made by this year’s ‘Australian of the Year’ is enough to kick-start a fresh stand-up comedy TV series.

Almost every populist, non-mainstream issue was elevated to priority level and to top it off was his commitment to use his new public platform to campaign for an Australian Republic.

There will certainly be a time to raise this issue again (having last been raised at our 1999 Referendum).  The appropriate time will be when our politicians have earned our respect and we can relinquish our Monarch’s role as umpire.

That will not happen until our politicians realize that respect cannot be bought, with taxpayers’ dollars, it must actually be earned by them.

Australians are paying too high a price to pay for politicians promises, which amount to little more than their re-election campaigns.

Ron Manners.

Feb. 2016

January 2016 - ‘Celebrating Mannwest’s 120 Years in Business’

Ron Manners, 12 January 2016
Check out the author's latest book at www.HeroicMisadventures.com


Excerpt from Chairman Ron’s comments on board the Decoy Paddlesteamer - Dec. 18, 2015

“There was another party recently, a couple of weeks ago in Paris - I think it was called the Climate Circus.  40,000 people were there.  We have got only 100 tonight and there are four main differences between that party and this one.

1. Everyone actually got here, tonight, at their own expense!

2. Everyone here, has the ability to balance their own cheque books and balance their own budgets.

3. We know that to spend, we first have to earn.  However, not that 40,000 bunch of climateers.  That group of people have incurred an ongoing cost to future generations, estimated to be about $1.5 trillion each year forever.  This debt is left to the ongoing generation just to cover the fun that these ‘Climate-Alarmists’ had during their two weeks in Paris.

4. When we are gone we will do our best not to leave any debt behind.

So, it’s great to be with responsible people here tonight. Consequently, if I wanted to take any advice from anyone I certainly would not take it from any of the 40,000 Paris contingent.

However, I would take advice from people like yourselves.

So thank you for being with us tonight.”

Further information on the event:-

  • Photos -

https://www.instagram.com/ron.manners/

  • Two short videos -

Mannwest Group’s 120 Year Anniversary

A bit of history taking place…

  • 120th Commemorative brochure -

Brochure

Looking forward to our next 120 years.

Ron Manners,

Chairman

Property Rights, Dogs and the Liberal Party

Ron Manners, 4 December 2015
Check out the author's latest book at www.HeroicMisadventures.com

Property Rights, Dogs and the Liberal Party

(Open letter to the Premier)

1st December, 2015

Dear Premier,

Re: Barnett Government Trashes W.A. Property Rights

You have not replied to my last letter dated 29th July, 2015, so I have attached the earlier correspondence - http://goo.gl/Nj7aM8

I feel that a reply is required as several important principles are involved:-

1. Does a Premier have the right, when pressured by Alcoa, to extinguish the Property Rights of landholders without compensation?

2. The comments in your letter of 20 July, 2015 did not relate to the specific land in question.

3. Is it permissible for a Premier to take a matter which should be dealt with by the Minister for Lands and position this task in the Premier’s Department?

Mr Premier, my correspondence raised several serious questions regarding Property Rights and requires answers, please.

A legitimate role of government, in civilised societies, is to protect the Property Rights of its citizens, not to demolish Property Rights without compensation.

Some civilized countries even have Constitutions that prevent such behaviour so I’m curious to know if my comments are justified.

My letter suggested that this matter be reviewed so I look forward to your reply.

The fact that my July 29th, 2015 letter has remained unanswered, for four months, tells me only one thing. So, I respectfully conclude that;

“My small dog has a better understanding, of Property Rights, than the Barnett State Government.”

With persistent patience and kind regards,

R.B. Manners,

Managing Director,

Mannwest Group Pty Ltd

Corporate Culture 2015

Ron Manners, 3 November 2015
Check out the author's latest book at www.HeroicMisadventures.com

Corporate Culture 2015

At Mannwest Group and Mannkal Foundation we invest in a wide range of publicly listed companies as we are dependent on their continuing cash flow and dividend yields.

This is the life-blood to enable us to expand our current activities.

Naturally, we read each company’s annual report in an attempt to understand the culture behind each company, hoping that this will give us some insight into their future success.

I have written elsewhere about the current trend toward political correctness where Chair & CEO’s reports these days appear to be written by junior P.R. flacks and apart from being incredibly bland and boring, they do meet the requirements of having the correct number of words to fill the page and are littered with meaningless terms such as sustainability, corporate social license to operate, environmentally friendly, etc.

Although, meeting their P.R. requirements, these reports usually give very little insight into the nature in the thinking of the people running your company.

This year we found only one company that dared to present their story in a form that exposed their own thoughts and plans for the company, following the Chair / CEO’s reports with a two page story ‘The OneVue Philosophy - People and Culture’, which incorporated a theme that they followed, illustrated by ‘The twenty mile march - the story of Amundsen vs Scott’.

We give you their story here

(There is a follow-on story from the above comment which continues on pages 20 - 24 of the OneVue report which can be accessed here)

Please note that this is not giving you investment advice so it should not be taken as such.  However, we raise this subject for two reasons:-

1. This is an outstanding communications strategy for explaining the general thrust and strategy of their company.

2. The story of Amundsen vs Scott is also a story that explains our Mannkal Foundation’s strategy to fill in the gap of life sustaining strategies (mostly economic) that might currently be missing from the next generation’s formal education.

What are your findings as you peruse this year’s crop of company annual reports?

Ron

Chairman,

Mannkal Economic Education Foundation

Politics is Broken

Ron Manners, 5 October 2015
Check out the author's latest book at www.HeroicMisadventures.com

October 2015

ron-trophy

Politics is Broken

Gail Sheehy once said, “If we don’t change, we don’t grow. If we don’t grow, we are not really living. Growth demands a temporary surrender of security.”

Could it be that, here in Australia, we refuse to “surrender our security” and choose “individual responsibility”?

By continuing to ask (plead) and expect too much from Government we have plunged our democracy into a bottomless abyss.

Way back, in 1970, the renowned development economist / political scientist, Albert O. Hirschman, published an interesting book that “nails” the current situation.

His book, Exit, Voice, and Loyalty (Harvard University Press), makes a basic distinction between alternative ways to reacting to deterioration in business firms and, in general, to dissatisfaction with organizations and countries.

His ‘exit’ is for the member to quit the organization, or the customer to switch to a competing product, or a citizen to simply leave and the other ‘voice’ is for such individuals to remain loyal and exert influence for change ‘from within’.

The efficiency of the competitive mechanism, with its total reliance on exit, is questioned for certain important situations. ‘Exit’ often undercuts ‘voice’ while being unable to counteract decline, ‘loyalty’ is seen in the function of retarding ‘exit’ and permitting ‘voice’ to play its proper role.

His interplay of the three concepts illuminates a wide range of economic, social and political phenomena and the author states in the preface; “Having found my own unifying way of looking at issues as diverse as competition and the two-party system …. I decided to let myself go a little.”

This is an interesting exercise in understanding ‘exit’ along with the lesser understood realms of ‘voice’ and ‘loyalty’.

Hirschman’s explanation of the forces that make people stay in a place, voice their concerns in order to change things, or just get up and leave is highly illuminating for today’s young Australians.

In reading this book it brought to mind the wise words from the great Thomas Jefferson —

“When the people fear their government, there is tyranny; when the government fears the people, there is liberty.”

ronsig

Ron

Australia’s Entitlement Disease

Ron Manners, 31 August 2015
Check out the author's latest book at www.HeroicMisadventures.com

Australia’s Entitlement Diseaseron-trophy

(Based on an address to the Young Liberal Movement of WA Policy Forum. Thursday, 13th August 2015)

By Ron Manners

I’m so excited that you are all here to talk about policy tonight.

Australia needs a policy rocket right up its backside.

Political parties, in Australia, talk about policies but inertia and the vested interests win out every time.

I want to talk about that and suggest a solution.

Did any of you learn about Public Choice Theory at university?

Does anyone want to describe it for me in two sentences?

Those of you who receive the concentrated benefits from any law or policy will work their guts out to protect their patch and they will distribute the costs widely, over as many people as possible, so that it is not life-threatening so the mob will not march in the streets.

That’s Public Choice Theory and it explains most of the bad policies that afflict Australia.  If you understand Public Choice Theory you will understand Australia’s entitlement disease and how it has lead to the mess we are in.

The entitlement disease is to be seen everywhere.

· In our schools.

· In politics.

· In business.

· In families.

Talking about families, one growth industry in Western Australia, is specialist companies set up to run family businesses because the next generation feel they are simply entitled to the proceeds, without having to work for it.

An international speaker is in Perth, next week, talking on how the next generation can graduate from being, as he puts it, “entitlement brats, to contributing leaders”.

However, the good news is - the game is up for this entitlement disease in politics and in business - thanks to your generation and to social media.

There can be no clearer example of concentrated benefits than those going to Bronwyn Bishop and the politicians of all parties.

The benefits are extremely concentrated but the costs have been carefully spread over some millions of victims, but the game is up now, thanks to the internet.

The unfortunate rub-off is that ‘respect’ has been completely lost for all politicians, which makes it doubly difficult and unfair for those exemplary few who have moderated their behaviour.

The same story applies for business.

Social media is now delving into matters of corporate looting which has been going on, on a grand scale.

Social media is identifying companies who have forgotten how to make a profit yet still fly their teams, via business class, around the world.

Shareholders are now revolting and are simply walking away from investing in such companies and, in fact, walking away from investing generally.

It is easy to see how so much abuse of the system has been regarded as ‘normal’ over all these years.  People say, ‘that’s politics’ or ‘that’s business’ but if respect is to be gained, over time, there is much hard work to be done.

For an explanation of how this has been going on for so long let’s again point to Public Choice Theory, which explains everything you need to know.

Why isn’t Public Choice Theory taught in the Australian universities anymore? (I do know that it is taught at ANU but I have yet to find examples of other universities teaching it).

Could it be that Public Choice Theory may indicate that universities themselves are an example in that they may be run with the concentrated benefits going to the administration and the academics and the diffused costs spread over many thousands of students and parents? I’m not sure but think about it.

Now let me give you a classic W.A. example of how Pubic Choice Theory permits bad policy to linger. An example could be our Potato Marketing Corporation of Western Australia.

I understand that we used to have Onion Boards, Egg Boards and all manner of Boards but they have been abolished and I think Potato Boards have been abolished in all other States.

Nearly all the experts agree that Potato Boards are a really bad idea and should be scrapped.

Here we have a policy which is very good for possibly 0.1% of our population. They, the potato growers, gain financial advantages through the existence of this policy.

What about the 99.9% not engaged in growing potatoes?

Most people, in this room, when they go to the supermarket pay more for their potatoes and, in addition, they pay higher taxes to pay for the Potato Board itself.

In other words the vast majority of us are getting screwed at both ends.

Now, we live in a democracy.  Here is the policy which is good for say 0.1% and bad for say, 99.9%.

Obviously in a democracy that policy would disappear.  It would be abolished.  Yet, every time there is an attempt to abolish the Potato Board it keeps coming back.  Now, how to explain this!

Public Choice Theory explains it as being the 0.1% who benefit from the policy, they really care about it because their income and wealth is tied up with the policy so they vote for and contribute to political candidates who support the policy.  They campaign for candidates who will continue with this and might even throw potato peel over candidates who don’t support such policies.

What about us 99.9%?  We don’t think about the policy much and even if we did we’d say, well it’s probably only costing us an extra $5 a week so we are certainly not going to march in the streets or hold placards up in front of TV cameras.

There are examples everywhere of the problems caused by concentrated benefits and dispersed costs with small groups holding the rest of us to ransom.

At least with the Potato Board there is an element of humour.  I understand that the Barnett Government has promised to get rid of the Potato Board, around next election time.  However, I noticed in last week’s Business News, that a new “leadership team has taken the helm at the Potato Marketing Corporation, as the industry moves towards deregulation.”

Deregulation doesn’t have to be managed.

You deregulate by simply abolishing the Potato Board.

(History is full of deregulation success stories; start with the West German Economic Miracle following WWII)

Meanwhile, W.A.’s potato statesman, Tony Galati, speaks for W.A.’s many consumers, who have been carrying these dispersed costs for many years, when he says, “The current stringent licensing system has pushed up prices for consumers for the benefit of a small number of farmers.”

You can see that we, the consumers, have been screwed again but the other interesting touch now is that those who have benefited, for so long, are now suggesting that the government should compensate them as their licences, issued by the Potato Board, are in danger of losing value.

Doesn’t all this sound a little like Uber and our over-protected taxi industry?

ron_at_yls

Digressing for a moment:

As an interested observer, and not a member of the Liberal Party, I’m amazed at how the State Liberal Government is acting as a government that desperately does not wish to win the next State election.

Look no further than the disgusting treatment of their own tenants at Elizabeth Quay.

Nobody treats their clients like that and remains in business.

Now, while we are searching for examples of bad policies that fit the Public Choice mould of concentrated benefits versus dispersed costs we can look at why residential building blocks in W.A. are three times the cost that they should be.

I personally have my own gripe with the State Government, which caused me to write a letter to the Premier (June 17, 2015), which I titled, “Barnett Government Trashes W.A. Property Rights.”

The letter and follow up responses have been copied to all State MPs and I’ve received an amazing amount of support from both Liberal and Labor MPs.

As a matter of fact one Labor MP actually rang and asked if they could steal my heading from the letter and use it as an election poster for the forthcoming State Election.  That heading of course was, “Barnett Government Trashes W.A. Property Rights”.

Governments could get away with this sort of thing before the internet and before we were empowered to communicate directly ourselves.  So, again, the game is up.

No need to go into the details of my complaint tonight but the correspondence is available on our website.

http://www.mannkal.org/downloads/links/TheBarnettGovernmentTrashesPropertyRights.pdf

The basis of my complaint is simply that I’m not interested in what cosy deal may have been done between the Premier and Alcoa.


I’m just interested in the fact that, under our State Constitution, the Premier cannot destroy my Property Rights.  To reinforce my thinking let me quote the exact words of Judge Andrew Napolitano

“The greatest losses of our freedom have come not from someone attacking us, but from the government ignoring the Constitution and the majority letting them get away with it.”


Something the politicians have forgotten is that the two most portable things on earth are people and capital.  If either is not made to feel welcome, people can be on the next plane and capital can be transferred elsewhere at the click of a button.

Australia is not a welcoming business environment, as I described in Greece and Hungary recently.

They didn’t believe me when I explained that our State Governments fine employers for creating jobs and the more jobs you create the higher the fine - we call it Payroll Tax.

That, along with red tape, green tape and black tape, has driven 85% of Australia’s exploration dollars offshore, probably never to return again.

That’s why your deliberations on policy are important.

Enough complaining!

We live in a great State and there is work to be done particularly on policy.

Let’s finish on a high note and explain why you folk will win and why you must win, if you are to have an exciting future.

At Mannkal Foundation we develop curiosity in the minds of young people to go in search of good strategies and to explain the dire outcomes of bad policies (we collect examples of both).

If you see or hear a business leader or politician, who says something sensible, stand up and cheer them!  They are doers and achievers and should be recognized as such.

One example is Indian Prime Minister Modi, when he said recently

“The problems of public administration will end if politicians learn how to say ‘no’ and if bureaucrats know how to say ‘yes’.

Learn from leaders who have earned respect.  Another example, the former Czech Leader, Vaclav Havel, who was described with these words:

“When Vaclav Havel died in 2011, tens of thousands of Czech citizens paid their respects.  It is rare for a politician to be so loved.  Havel was a man of great integrity who spent his life ‘living the truth’ in a society that was ‘living a lie’.”

Mannkal Foundation focuses on youth and I saw similarities in Greece for this reason.

In Greece, as in Australia, change will not come from people over 40 years of age.

By then, they have usually found their way around the many rules and regulations (or transferred capital elsewhere).  However, our young people, like the young people in Greece, have more to lose.

They have been screwed and left with the debt.

So there are two reasons to succeed with reactivating policies.

1. You have the tools that previous generations didn’t have:-

v Project Western Australia. http://www.mannkal.org/projectwa.php

v Books that clearly show which policies will work.

v The N.Z. example – where their recent successful reforms have been described as “Being designed by Hayekians, run by pragmatists and populated by socialists.”

and the second reason;

2. You will succeed because your own future depends on you, yourselves.

So, work on your policies and ensure that the concentrated benefits go directly to you and future generations, with the dispersed costs spread widely, but this time, over the many ‘enemies of industry’.

University “book burners” are busy again!

Ron Manners, 31 July 2015
Check out the author's latest book at www.HeroicMisadventures.com

Ron Manners

Ron Manners

University ‘book burners’ are busy again!

We witnessed a remarkable situation in May, this year, when a local university returned a $4 million research fund to host noted Danish academic, Bjorn Lomborg, and his Consensus Centre.

The proposal was to research and debate matters of climate, malaria and safe drinking water for the world’s less developed nations, ranking the “return on investment” of hundreds of different policy choices.

A preliminary study, reviewed by a panel that included two Nobel Laureates, found that for each dollar spent on trade liberalisation over $4,000 of benefits were created, while investments in mosquito nets for rural Africans and immunisation also had high returns. 19 targets were identified that represent the best value-for-money in development over the period 2016 to 2030, each offering more than $15 back on every aid dollar invested.

I would encourage all readers of this column to look at Lomborg’s work and make up their own minds at http://www.copenhagenconsensus.com/

The thought of opening a ‘debate’ on some pet topics of a select few stirred a proverbial hornet’s nest and the funds were returned and the Consensus Centre was sent elsewhere.

Now, today, it’s interesting to see that the same situation is being repeated at South Australia’s Flinders University (The Australian - July 27th, ‘15 - article by Andrew Burrell).

“Education Minister, Christopher Pyne, has been searching for an institution to host the Centre, since the University of Western Australia pulled out in May, citing a backlash from academics unwilling to work with Dr. Lomborg’s Copenhagen Consensus Centre.

lomborg-cartoon


The revelation of the talks promoted an immediate backlash from Flinders’ staff and students who warned that they would protest against any move by the university to host the centre.”

All this was reminiscent of a similar event in Perth in 2010 when the ‘noisy few’ launched a protest at Christopher Monckton’s visit when he wished to open a debate, focused on ‘global warming - climate change’.

I don’t think anyone doubts that the climate changes, as it always has and always will, but there seems a great unwillingness to actually discuss the extent to which the causes may be apportioned to ‘mankind’ or nature and its accessory volcanoes - see http://www.washingtontimes.com/news/2015/jul/27/richard-rahn-climate-change-very-unsettled-science/

So, isn’t there something unhealthy about particular views being hysterically silenced in this way?

Rather than query the motives of the noisy objectors, could we spend a few moments reflecting on the words of British Philosopher, John Stuart Mill, who wrote in his book, On Liberty, in 1869, as follows:-

“If all mankind minus one, were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind. ………….But the peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation.”

Ron Manners

Aug. 2015

Barnett Government Trashes W.A. ‘Property Rights.’

Ron Manners, 7 July 2015
Check out the author's latest book at www.HeroicMisadventures.com

Mannerisms - July, 2015

Barnett Government Trashes W.A. ‘Property Rights’

17th June, 2015

Open letter to:

Dear Premier Barnett,

Travelling through Europe, particularly Greece, with a group of economists last month, I had a strange feeling. It came to me while we spoke on the importance of respecting ‘Property Rights’ as a key component in energizing any country’s economy.

Among the varying examples of Property Rights being trashed in those countries, none were worse examples than one in Western Australia that affects me as a small partner in a residential land development syndicate (Primewest Syndicate) at Wattleup Rd, just south of Perth.

We purchased the syndicate land, zoned Urban–deferred, in February 2006. Both at the time of purchase and rezoning to Urban in 2008, it was not affected in any way by any industrial buffer or the like.  Nothing complicated about that and easily understood.  In fact the WAPC had some five years before purchased an adjoining poultry operation, relocated it to a rural area and then proceeded to rezone the land for residential use.

Then, in 2009, a decision was made without reference to the Local Council or affected land owners.  It was a decision to extend the Alcoa exclusion zone by an additional 500m to include our land holding.  That decision overturned all strategic and statutory planning which had been undertaken over more than a decade to realise zonings under the Metropolitan Region Scheme and City of Cockburn Town Planning Scheme No.3 which allow for residential development.  Such extraordinary action undermines confidence in the planning system and increases the cost of bringing residential land to market, further fuelling Perth’s housing affordability predicament.

So, here we are, more than 9 years since our purchase and 7 years since the land was rezoned to Urban.  Despite our best efforts to subdivide this land and supply some residential blocks in this prime location, all we have to show for it is a mountain of paper and bureaucratic obfuscation that would provide a ready-made script for any Australian version of Yes Minister!

To continue on this lumbering process of applications into the distant future appears pointless, hence my direct approach to you as the matter rests in the Premier’s Department and not in the Western Australian Planning Commission where it probably should reside.

An economics student could write their thesis on why building blocks in Western Australia are three times the price they should be. To put this in perspective, the Perth median home price in 1985 was the equivalent of 3.16 times average annual earnings.  In 2014, Perth’s median home price represents 9.35 times average annual earnings - see att. spreadsheet (Ref. Institute of Public Affairs Research).

This is in a State where, through the efficiency of our home builders, the price of houses has been kept low.  Meanwhile, the price of housing lots has gone through the roof, one might say.

Yes, there was a request that we do further dust sample monitoring, over a 12 month period.

Yes, this was done by experts, based on a methodology approved by and in consultation with your Department of Health and Department of Environment and Conservation.  The monitoring was completed at great expense, and the results confirmed that no problems existed.

However, the State Administrative Tribunal claims the ‘Precautionary Principle’ should triumph over Property Rights.

I’ve studied the Precautionary Principle and understand clearly that on that basis no-one should ever get married because such marriage may end in divorce and that no-one should ever start a business because at sometime in the future it may fail.

Mr Premier, our great State was not built on the Precautionary Principle and we should be thankful for that.

Media Coverage

The ABC transcript of your own comments of October 15th 2014, state;

“If people have bought land in a buffer zone, which hasn’t been legislated previously but it’s been there and there’s been a lot of discussion about the buffer zone and how wide it should be, then those developers take on a risk,” Mr Barnett said.

Please let me, respectfully, correct this statement.

When our syndicate purchased this land in 2006 there was no buffer zone, nor talk of one on this syndicate land.

In respect to our land syndicate, your comments were incorrect (simply wrong) which leads me to suggest that either your advisors don’t understand Property Rights, or that they were misleading you in preparing that statement.

My question now is …..

Does your Government believe in Property Rights?

Do they agree that it is a key ingredient in what we call western civilization which has given us levels of prosperity in our State that is the envy of many parts of the world?

If you believe in Property Rights, then there can be no arbitrary ‘taking’ as is your current action of legislating a 1.5 km exclusion zone.

If your action is being taken to accommodate some form of “crony-capitalism” deal being done between the State Government and Alcoa (shades of WA Inc.) then this must be done by mutual negotiation, rather than by the stroke of a bureaucratic pen.

Mr Premier, it seems that I have only two alternatives:-

  1. Remain silent while my existing (at time of purchase) Property Rights are legislated away by your government (not a rational option).

Or

  1. Protest vigorously about what I see as a clear breach of government trust that, if it remains unchallenged, will continue to create further uncertainty for all property owners in Western Australia.

I bring this matter to your attention in the hope that you might review the matter and I make myself available, at any time convenient to yourself, to discuss this matter with you further.

Yours respectfully,

Ron Manners,

Managing Director

Mannwest Group Pty Ltd

Att.

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