Tuesday, September 26, 2006

Fixing housing affordability, Liberal-style

Probably more than any other factor – including negative gearing, carte-blanche depreciation allowances, and infrastructure levies on greenfields blocks* – the introduction of the CGT 50% discount in 1999 has been a policy disaster, in fuelling land-price (and so house-price) inflation.

The discount comes with almost no qualifications – all but the most itchy-fingered of speculators are catered for indistinguishably from longer-term investors by the minimum 12 months property-holding rule. Indeed, relatively fast turnover is encouraged by the discount’s being in lieu of CPI indexation, in calculating the real capital gain. After holding a property through ten years of 3% annual inflation then, the first 30% of the nominal capital gain is illusory, but it is the nominal gain which counts, subject to the 50% discount.

Abolishing the 50% CGT discount, and returning to a CPI-indexation system would be a sound policy step. Not suprisingly then, the Liberal politician formerly known as Sophie Panopolous, now Sophie Mirabella, is proposing a move in the other direction.

Admittedly, Mirabella’s proposal does have the benefit of acting as a slight disincentive to shorter-term investors/speculators, by the 50% discount starting as a 30% (only) discount after the first year, and then rising in steps to 50% by (I’m guessing) the fifth year of ownership. I say this is a “slight” disincentive because waiting for an annual step will only result in a real reward of an extra 2% discount (assuming 3% annual inflation).

Then there’s the steps going in the other direction, with the discount rising to 70% after 10 years, and 100% (i.e. CGT-free) after 15 years of ownership, at least for retirees. It seems it is the latter’s vote that Mirabella’s overall proposal is being pitched at. Based on recent changes to superannuation, Mirabella won’t exactly be stampeded with retiree enthusiasm here, quite apart from inflation again eroding much of the headline discount.

The bar of fiscal indulgence towards retirees (in which category I include those presently aged 45-60) has already been set so high that a promise of “Free money!” would most likely be met with the jaded come-back: “We’re already swimming in it. So peel me a grape, would ya?”.

* The Housing Industry Association has recently been bleating about infrastructure levies being the main reason for first-home unaffordability. Which makes me laugh – can the HIA in 2006 really not have heard of the Reagan/Thatcher/Hawke user-pays/privatisation revolution of 1979-present? And if they haven’t, then surely tertiary students – also subject to an affordability crisis because (clearly, this time) of a user-pays system – have more a more legitimate call on the taxpayer for their education than home-buyers have for being subsidised to live in outer-suburbia. The former has public benefit; the latter doesn’t.

Sunday, September 24, 2006

History’s other tide – Noongar native title

Yes I’m back, after a few weeks’ break in the top paddock.

The Noongar native title interim decision Bennell v Western Australia is a welcome – if provisional – win. One thing it seems to confirm is that Less is More in native title cases, speaking from a pro-Indigenous point of view.

While Bennell seems* well-grounded in fact and detail (in word-count it parallels the Larrakia common-law land-rights case: Risk v Northern Territory), its time-frame notably contrasts with the Larrakia one. A quick case is most assuredly a good case, in this area of law.

The Noongar hearing took 20 days, starting on 11 October 2005, with judgment eleven months later. The Larrakia hearing took 68 days, starting on 2 September 2002 with judgment three and a half years later, on 13 April 2006. (Note however that both cases had tortuous, multi-decade legal lead-ups which can’t be divorced from their curial climaxes, however self-contained the judgments may purport to be.)

Apart from its relative speed and efficiency, Bennell benefits from an absence of what I term the Curse of the Trial-Judge-as-Ethnographic-Tourist-and-Pompous-Windbag, a syndrome plainly seen in Risk:

I was impressed by the genuineness and honesty of all of [the Larrakia] witnesses. [Summary para 11; q.v. para 528 of Reasons for Judgment]

The essence of this syndrome – first seen thirty-five years earlier, in the Gove Land Rights Case, aka Milirrpum v Nabalco – is that for the Indigenous side, warning-bells should go off at any sign of generous praise towards them. Such praise seemingly inevitably comes with a large, almost-simultaneous kick in the guts. In Risk, the Larrakia’s “genuineness and honesty” got them just as far as did the Yolgnu’s preparedness to show Justice “I [was] privileged” Blackburn – an uninitiated man – certain sacred objects (rannga, as proxy title deeds) ((1971) 17 FLR 141 at 167 and 177). That is to say, cold contempt at the business end of the case, albeit dressed-up as Western rational scepticism, and with a side-dish serving of legal club-iness:

In other words, I am not satisfied, on the balance of probabilities, that the plaintiffs’ predecessors had in 1788 the same links to the same areas of land as those which the plaintiffs now claim ((1971) 17 FLR 141 at 198, using a swingeing formulation eerily similar to that used in Risk).

I am most grateful to counsel for their assistance in this heavy case, which I know is of great importance to all parties (Ibid at 293).

Compare Risk:

I commend all parties for their conduct of the hearing, their comprehensive and focused submissions, and their co-operation in the timetabling of witnesses and other procedural issues. All parties should also be appreciative of the thorough and careful work done on their behalf by their legal representatives to ensure their cases were fully and properly presented, and the contentions in support of them effectively argued. [Summary para 5; q.v. para 43 of Reasons for Judgment]


Which segues us to the charming phrase “the tide of history”. While first used innocently enough in Mabo, in the Yorta Yorta case (2002), it metamorphosed into a ball-and-chain – an almost-inescapable burden, made of mixed fact and law confusion, for Indigenous native title claimants. Bennell managed to rise above this “tide” (the phrase appears nowhere in the judgment) for reasons I’ll speculate about shortly. For the Larrakia in Risk however, as with the Yorta Yorta in 2002, it was high-tide indeed.

A native title finding ostensibly involves two main steps, once the claimant group identity is satisfactorily posited: (i) proving ongoing, essentially uninterrupted links to the claimed land, and (ii) non-extinguishment by competing (= non-Indigenous) interests in the land. (Here, the date of any such extinguishment is all-important; for extinguishments prior to 31 October 1975, that is the end of the story, but for extinguishments after this date, compensation can be obtained in lieu of actual title.)

In practice – as is so often the case – these two steps aren’t as self-contained as they purport to be. Losing links (“negative”) without/through positive acts of extinguishment is possible, but certainly won't always be the case. The first step thus relies on using artificial traction to attain its isolation, in the form of a weirdly open time-frame, aka “the tide of history”.

Hence the dates that the Indigenous claimant groups in the Larrakia and Yorta Yorta cases supposedly lost their ongoing connection with “their” (onetime) land are not specified. Instead, a sort of inverted, white-man Dreamtime is posited, a vague time before currently-living generations, and thus an inherent excuse against any sense of current, personal or moral responsibility.

In Risk, the 1920s and 1930s get casually mentioned in this regard, but such is, I stress, an essentially arbitrary framing of the necessary Nightmaretime. The extinguishments – positive acts by individuals of a generation now conveniently, if just, all dead – that often accompanied, if not caused, these losses of “links” are left unmentioned. Of course nothing turns on this strictly speaking, as extinguishments prior to 1975 were done with legal impunity, then and now. But the awkward silences lurking beneath the bland “tide” metaphor rattle me deeply.

Moreover – although this awaits elaboration in a future post – the Larrakia’s greatest loss of “links” to Darwin happened not in a conveniently-vague Nightmaretime of seven or eight decades ago, but in the 1970s. That is, heartbreakingly recently, particularly if seen in terms of (i) occurring without a positive act of extinguishment by non-Indigenous interests, and (ii) prior to 31 October 1975. Which certainly was sometimes the case. Apart from this though, are the festering wounds of arguable (a) post-31 October 1975 (= compensable) extinguishments and (b) just-pre-1975 (non-compensable) acts of bastardry, both studiously ignored in Risk, using the rationale that “the tide of history” had pre-emptively erased them from ever happening, anyway.


Finally, a note on why I think that Bennell managed not to get caught up with, and so swept away by the “tide”. As the AFR characteristically merely hinted on Friday**, the difference here might largely rest with Sydney barrister Vance Hughston’s being on the Indigenous side in Bennell, after being on the other side in both the Larrakia and the Yorta Yorta cases (counsel for the NT and NSW respectively). Hughston’s withering cross-examination of expert witnesses for the Larrakia stands out in Risk's Reasons for Judgment. Tellingly also, Hughston himself posits a ridiculous bluff to a journalist, parrying around the fact of his having changed sides:

[Hughston] said people criticising the Noongar decision failed to distinguish between findings of fact and findings of law by Justice Wilcox. “I was involved in both the Yorta Yorta and Larrakia decisions and from my point of view the facts of those cases bore no resemblance to this one,” Mr Hughston said.***

Yep, “no resemblance”. But in defence of Mr Hughston, one thing is clearly different in Bennell: the decades-old Curse of the Trial-Judge-as-Ethnographic-Tourist-and-Pompous-Windbag appears to have been broken. Justice Wilcox manages to be “impressed” with the Noongar claimants/witnesses in several places. That is, when not unilaterally placed on an ethnographic pedestal, the Indigenous claimants aren’t left high, dry and right-less at the actual business end of things.

Justice Wilcox is also nowhere “grateful” to counsel, nor pauses anywhere to “commend” anyone or anything, other than for the parties (a term that, revealingly, is used only a handful of times in Risk) being commended to have a discussion about identifying, for the next step in the claim, a limited number of key, substantial land parcels, likely to be in frequent use by members of the Noongar community, such as national parks (para 882-883).

* I haven’t yet read the Reasons for Judgment.

** Marcus Priest “Hearsay” AFR 22 September 2006

*** Marcus Priest “Native title fear ‘ill-founded’” AFR 22 September 2006

Update 25 September 2006

Spurred by a curious take by Mark Bahnisch on the Noongar judgment, I have skim-read it.

Mark wrote:

The most important aspect of the decision is the way in which it recognises that cultures change, and that Indigenous cultures changed post-settlement in a dialectical way through interaction with settler cultures. That’s a great advance on the previous common law position . . .

“That’s funny,” I thought to myself, “I wouldn’t have picked Wilcox J as a mid/late 1980s B.A. student. And even if he had been an arts student then, to now be using messianic sociology concepts, either in lieu of, or to 'advance' legal reasoning, when writing a judgment”.

Sure enough, I couldn’t find any reference in the judgment which gave greater, much less wholesale new meaning to the subject of Indigenous (or Noongar specifically) cultural change, post European settlement.

What did emerge for me, though, apropos of my earlier theory re Vance Hughston, was Bennell's different “dialectic” re in-court conduct, such as cross-examination, compared with Risk. WA didn’t even have a senior barrister to represent its interests as the primary defendant. Predictably then, the main cross-examination triumphs in Bennell were on the plaintiff’s side, with Hughston being in particularly good form against ubiquitous, rent-a-redneck expert witness for anti-Indigenous defendants, Dr Ron Brunton.

Mark Bahnisch is not the only one sending out strange messages from the pro- Indigenous side, however. A few days ago, the Age indirectly quoted Sean Brennan, of the UNSW law school, as saying that the recent Noongar factual finding over Perth is not a legal precedent applicable to other capital cities. I have no idea what Brennan meant by that (other than the trite observation that almost every legal "precedent" turns on its facts, to some extent), but the good news is that he has written a crystal-clear OpEd out today, which also puts a nice bit of icing on the Noongar cake, by showing up PM Howard’s duplicity when it comes to ethnographic tourism (“good Jacky-Jacky”) vs the business end of land rights (“bad Jacky-Jacky”).

Finally, speaking of ethnographic tourists, I dug up a letter on Justice Blackburn’s destructive, bumbling enthusiasm that I wrote in 1995, published in Campus Review on 31 August 1995. Here it is for digital posterity:

Blackburn J was an (amateur) historian

Contrary to some claims (“Designer history” Campus Review 17 August 1995) Blackburn J was an historian, as well as being a trained lawyer, of course.

Henry Reynolds has written that “[i]t may be thought unfair to expect judges to be their own historians” and hence that Justice Blackburn’s approach, consistent with the terra nullius doctrine, was simply reflecting the “traditional” view. However, it was Justice Blackburn’s very enthusiasm for historical delving that was to elevate the Gove Land Rights Case, falsely, into being a definitive statement of Australian law.

The qualification “amateur historian” is perhaps only fair: Blackburn J was president of the Historical Society of the Northern Territory at the time of the case (1971). The ethos of the Society, a sort of modern version of the old-time Pioneer Association, would seem to have permeated Justice Blackburn’s apparent affirmation of terra nullius in his prolix and rambling judgment.

As a judge, Blackburn J was certainly bound by precedent, whatever his credentials as an historian, but the claimed recentness of the precedents he followed is erroneous, albeit widely-held. The main case supporting the terra nullius doctrine, Cooper v Stuart, dates from 1889. Other cases, from only 50 years earlier, that rebut the doctrine were dismissed by Blackburn J as “curiosities of Australia legal history”. Thus, terra nullius is gammon; gammon history, gammon law.

Paul Watson
Faculty of Business
Northern Territory University

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