Approaches for calculation of holding costs in the context of greenfield residential development

There are increasing indications that the contribution of holding costs and its impact on housing affordability is very significant. Their importance and perceived high level impact can be gauged from considering the unprecedented level of attention policy makers have given them recently. This may be evidenced by the embedding of specific strategies to address burgeoning holding costs (and particularly those cost savings associated with streamlining regulatory assessment) within statutory instruments such as the Queensland Housing Affordability Strategy, and the South East Queensland Regional Plan. However, several key issues require further investigation. Firstly, the computation and methodology behind the calculation of holding costs varies widely. In fact, it is not only variable, but in some instances completely ignored. Secondly, some ambiguity exists in terms of the inclusion of various elements of holding costs and assessment of their relative contribution. Perhaps this may in part be explained by their nature: such costs are not always immediately apparent. They are not as visible as more tangible cost items associated with greenfield development such as regulatory fees, government taxes, acquisition costs, selling fees, commissions and others. Holding costs are also more difficult to evaluate since for the most part they must be ultimately assessed over time in an ever-changing environment based on their strong relationship with opportunity cost which is in turn dependant, inter alia, upon prevailing inflation and / or interest rates. This paper seeks to provide a more detailed investigation of those elements related to holding costs, and in so doing determine the size of their impact specifically on the end user. It extends research in this area clarifying the extent to which holding costs impact housing affordability. Geographical diversity indicated by the considerable variation between various planning instruments and the length of regulatory assessment periods suggests further research should adopt a case study approach in order to test the relevance of theoretical modelling conducted.

The conceptualisation, sensitivity and measurement of holding costs and other selected elements impacting housing affordability (Literature review and research methodology for confirmation of PhD candidature)

It is widely held that strong relationships exist between housing, economic status, and well being. This is exemplified by widespread housing stock surpluses in many countries which threaten to destabilise numerous aspects related to individuals and community. However, the position of housing demand and supply is not consistent. The Australian position provides a distinct contrast whereby seemingly inexorable housing demand generally remains a critical issue affecting the socio-economic landscape. Underpinned by high levels of immigration, and further buoyed by sustained historically low interest rates, increasing income levels, and increased government assistance for first home buyers, this strong housing demand ensures elements related to housing affordability continue to gain prominence. A significant, but less visible factor impacting housing affordability – particularly new housing development – relates to holding costs. These costs are in many ways “hidden” and cannot always be easily identified. Although it is only one contributor, the nature and extent of its impact requires elucidation. In its simplest form, it commences with a calculation of the interest or opportunity cost of land holding. However, there is significantly more complexity for major new developments - particularly greenfield property development. Preliminary analysis conducted by the author suggests that even small shifts in primary factors impacting holding costs can appreciably affect housing affordability – and notably, to a greater extent than commonly held. Even so, their importance and perceived high level impact can be gauged from the unprecedented level of attention policy makers have given them over recent years. This may be evidenced by the embedding of specific strategies to address burgeoning holding costs (and particularly those cost savings associated with streamlining regulatory assessment) within statutory instruments such as the Queensland Housing Affordability Strategy, and the South East Queensland Regional Plan. However, several key issues require investigation. Firstly, the computation and methodology behind the calculation of holding costs varies widely. In fact, it is not only variable, but in some instances completely ignored. Secondly, some ambiguity exists in terms of the inclusion of various elements of holding costs, thereby affecting the assessment of their relative contribution. Perhaps this may in part be explained by their nature: such costs are not always immediately apparent. Some forms of holding costs are not as visible as the more tangible cost items associated with greenfield development such as regulatory fees, government taxes, acquisition costs, selling fees, commissions and others. Holding costs are also more difficult to evaluate since for the most part they must be ultimately assessed over time in an ever-changing environment, based on their strong relationship with opportunity cost which is in turn dependant, inter alia, upon prevailing inflation and / or interest rates. By extending research in the general area of housing affordability, this thesis seeks to provide a more detailed investigation of those elements related to holding costs, and in so doing determine the size of their impact specifically on the end user. This will involve the development of soundly based economic and econometric models which seek to clarify the componentry impacts of holding costs. Ultimately, there are significant policy implications in relation to the framework used in Australian jurisdictions that promote, retain, or otherwise maximise, the opportunities for affordable housing.

Tax morale and conditional cooperation

Why so many people pay their taxes, even though fines and audit probability are low, is a central question in the tax compliance literature. Positing a homo oeconomicus having a refined motivation structure sheds light on this puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 West and East European countries. We find a high correlation between perceived tax evasion and tax morale. The results remain robust after exploiting endogeneity and conducting several robustness tests. We also observe a strong positive correlation between institutional quality and tax mmorale. Keywords: Tax morale; Tax compliance; Tax evasion; Pro-social behavior; Institutions

A Knight without a Sword? The Effects of Audit Courts on Tax Morale

The intention of this paper is to analyse how audit courts affect tax morale, controlling in a multivariate analysis for a broad variety of potential factors. Switzerland, with its variety of audit-court competence among the cantons, has been analysed. With data from the ISSP [1998] (Swiss data 1999), evidence has been found that higher audit-court competence has a significantly positive effect on tax morale. Thus, the results in Switzerland suggest that in the cantons where audit courts are not just knights without swords; they help improve taxpayers' tax morale and thus citizens' intrinsic motivation to pay taxes.

Economic growth, inequality and technology adoption in transitional economies

The stylized facts that motivate this thesis include the diversity in growth patterns that are observed across countries during the process of economic development, and the divergence over time in income distributions both within and across countries. This thesis constructs a dynamic general equilibrium model in which technology adoption is costly and agents are heterogeneous in their initial holdings of resources. Given the households‟ resource level, this study examines how adoption costs influence the evolution of household income over time and the timing of transition to more productive technologies. The analytical results of the model constructed here characterize three growth outcomes associated with the technology adoption process depending on productivity differences between the technologies. These are appropriately labeled as „poverty trap‟, „dual economy‟ and „balanced growth‟. The model is then capable of explaining the observed diversity in growth patterns across countries, as well as divergence of incomes over time. Numerical simulations of the model furthermore illustrate features of this transition. They suggest that that differences in adoption costs account for the timing of households‟ decision to switch technology which leads to a disparity in incomes across households in the technology adoption process. Since this determines the timing of complete adoption of the technology within a country, the implications for cross-country income differences are obvious. Moreover, the timing of technology adoption appears to be impacts on patterns of growth of households, which are different across various income groups. The findings also show that, in the presence of costs associated with the adoption of more productive technologies, inequalities of income and wealth may increase over time tending to delay the convergence in income levels. Initial levels of inequalities in the resources also have an impact on the date of complete adoption of more productive technologies. The issue of increasing income inequality in the process of technology adoption opens up another direction for research. Specifically increasing inequality implies that distributive conflicts may emerge during the transitional process with political- economy consequences. The model is therefore extended to include such issues. Without any political considerations, taxes would leads to a reduction in inequality and convergence of incomes across agents. However this process is delayed if politico-economic influences are taken into account. Moreover, the political outcome is sub optimal. This is essentially due to the fact that there is a resistance associated with the complete adoption of the advanced technology.

Preliminary modelling outcomes : calculation of holding costs in greenfield residential development

Many of the costs associated with greenfield residential development are apparent and tangible. For example, regulatory fees, government taxes, acquisition costs, selling fees, commissions and others are all relatively easily identified since they represent actual costs incurred at a given point in time. However, identification of holding costs are not always immediately evident since by contrast they characteristically lack visibility. One reason for this is that, for the most part, they are typically assessed over time in an ever-changing environment. In addition, wide variations exist in development pipeline components: they are typically represented from anywhere between a two and over sixteen years time period - even if located within the same geographical region. Determination of the starting and end points, with regards holding cost computation, can also prove problematic. Furthermore, the choice between application of prevailing inflation, or interest rates, or a combination of both over time, adds further complexity. Although research is emerging in these areas, a review of the literature reveals attempts to identify holding cost components are limited. Their quantification (in terms of relative weight or proportionate cost to a development project) is even less apparent; in fact, the computation and methodology behind the calculation of holding costs varies widely and in some instances completely ignored. In addition, it may be demonstrated that ambiguities exists in terms of the inclusion of various elements of holding costs and assessment of their relative contribution. Yet their impact on housing affordability is widely acknowledged to be profound, with their quantification potentially maximising the opportunities for delivering affordable housing. This paper seeks to build on earlier investigations into those elements related to holding costs, providing theoretical modelling of the size of their impact - specifically on the end user. At this point the research is reliant upon quantitative data sets, however additional qualitative analysis (not included here) will be relevant to account for certain variations between expectations and actual outcomes achieved by developers. Although this research stops short of cross-referencing with a regional or international comparison study, an improved understanding of the relationship between holding costs, regulatory charges, and housing affordability results.

In-depth analysis of the J.A.C.K. model

The Texas Transportation Commission (“the Commission”) is responsible for planning and making policies for the location, construction, and maintenance of a comprehensive system of highways and public roads in Texas. In order for the Commission to carry out its legislative mandate, the Texas Constitution requires that most revenue generated by motor vehicle registration fees and motor fuel taxes be used for constructing and maintaining public roadways and other designated purposes. The Texas Department of Transportation (TxDOT) assists the Commission in executing state transportation policy. It is the responsibility of the legislature to appropriate money for TxDOT’s operation and maintenance expenses. All money authorized to be appropriated for TxDOT’s operations must come from the State Highway Fund (also known as Fund 6, Fund 006, or Fund 0006). The Commission can then use the balance in the fund to fulfill its responsibilities. However, the value of the revenue received in Fund 6 is not keeping pace with growing demand for transportation infrastructure in Texas. Additionally, diversion of revenue to nontransportation uses now exceeds $600 million per year. As shown in Figure 1.1, revenues and expenditures of the State Highway Fund per vehicle mile traveled (VMT) in Texas have remained almost flat since 1993. In the meantime, construction cost inflation has gone up more than 100%, effectively halving the value of expenditure.

Parliamentary inquiry into alcohol-related violence

Alcohol consumption has been a popular leisure activity among Australian since European Settlement. Australians currently consume 7.2 litres per capita pure alcohol and Australia in regards to alcohol consumption is ranked as the 22nd highest country of 58 countries. Although the alcohol industry has provided leisure, employment and government taxes, alcohol use has also become associated with chronic health problems, crime, public disorder and violence. Drunken and disorderly behaviour is commonly associated with Pubs, Clubs and Hotels, particularly in the late night entertainment areas. Historically, drunkenness and disorderly behaviour has been managed by measures such as floggings, jail and treatment in asylums. Alcohol has also been banned in specific areas and restrictions have applied to hours and days of operation. In more recent times alcohol policies have included extended trading hours, restricted trading hours and bans in some Aboriginal communities in order to reduce alcohol-related violence. Community and business partnerships in and around licensed premises have also developed in order to address the noise, violence and disorderly behaviour that often occurs in the evenings and early mornings. There is an urgent need for the government to be more robust about implementing effective alcohol control policies in order to prevent and reduce the harmful effects of alcohol.

Benchmarking local E-Government

Increasingly, almost everything we do in our daily lives is being influenced by information and communications technologies (ICTs) including the Internet. The task of governance is no exception with an increasing number of national, state, and local governments utilizing ICTs to support government operations, engage citizens, and provide government services. As with other things, the process of governance is now being prefixed with an “e”. E-governance can range from simple Web sites that convey basic information to complex sites that transform the customary ways of delivering all sorts of government services. In this respect local e-government is the form of e-governance that specifically focuses on the online delivery of suitable local services by local authorities. In practice local e-government reflects four dimensions, each one dealing with the functions of government itself. The four are: (a) e-services, the electronic delivery of government information, programs, and services often over the Internet; (b) e-management, the use of information technology to improve the management of government. This might range from streamlining business processes to improving the flow of information within government departments; (c) e-democracy the use of electronic communication vehicles, such as e-mail and the Internet, to increase citizen participation in the public decision-making process; (d) e-commerce, the exchange of money for goods and services over the Internet which might include citizens paying taxes and utility bills, renewing vehicle registrations, and paying for recreation programs, or government buying office supplies and auctioning surplus equipment (Cook, LaVigne, Pagano, Dawes, & Pardo, 2002). Commensurate with the rapid increase in the process of developing e-governance tools, there has been an increased interest in benchmarking the process of local e-governance. This benchmarking, which includes the processes involved in e-governance as well as the extent of e-governance adoption or take-up is important as it allows for improved processes and enables government agencies to move towards world best practice. It is within this context that this article discusses benchmarking local e-government. It brings together a number of discussions regarding the significance of benchmarking, best practices and actions for local e-government, and key elements of a successful local e-government project.

The impact of infrastructure charges on new housing costs : an international comparison

Sourcing funding for the provision of new urban infrastructure has been a policy dilemma for governments around the world for decades. This is particularly relevant in high growth areas where new services are required to support swelling populations. Existing communities resist the introduction of new taxes to fund such infrastructure, hence the introduction of charges to the developer has flourished. The Australian infrastructure funding policy dilemmas are reflective of similar matters to some extent in the United Kingdom, and to a greater extent the United States of America. In these countries, infrastructure cost recovery policies have been in place since the 1940’s and 1970’s respectively. There is an extensive body of theoretical and empirical literature that discusses the passing on (to home buyers) or passing back (to the englobo land seller) of these increased infrastructure charges, and the corresponding impact on housing cost and supply. The purpose of this research is to examine the international evidence that suggests infrastructure charges contribute to increased house prices as well as reduced land supply. The paper concludes that whilst the theoretical work is largely consistent, the empirical research to date is inconclusive and further research is required into these impacts in Australia.

Principles of taxation law (4th Edition)

Taxation law can be an incredibly complex subject to absorb, particularly when time is limited. Written specifically for students, Principles of Taxation Law 2011 brings much needed clarity to this area of law. Utilising many methods to make this often daunting subject achievable, particular features of the 2011 edition include: • seven parts: overview and structure, principles of income, deductions and offsets, timing issues, investment and business entities, tax avoidance and administration, and indirect taxes; • clearly structured chapters within those parts grouped under helpful headings; • flowcharts, diagrams and tables, end of chapter practice questions, and case summaries; • an appendix containing all of the up to date and relevant rates; and • the online self-testing component mentor, which provides questions for students of both business and law. Every major aspect of the Australian tax system is covered, with chapters on topics such as goods and services tax, superannuation, offsets, partnerships, capital gains tax, trusts, company tax and tax administration. All chapters have been thoroughly revised. Principles of Taxation Law 2011 is the perfect tool to guide the reader from their initial exposure to the subject to success in taxation law exams. [from publisher's website]

Principles of taxation law 2012

Taxation law can be an incredibly complex subject to absorb, particularly when time is limited. Written specifically for students, Principles of Taxation Law 2012 brings much needed clarity to this area of law. Utilising many methods to make this often daunting subject achievable, particular features of the 2012 edition include: * seven parts: overview and structure, principles of income, deductions and offsets, timing issues, investment and business entities, tax avoidance and administration, and indirect taxes; * clearly structured chapters within those parts grouped under helpful headings; * flowcharts, diagrams and tables, end of chapter practice questions, and case summaries; * an appendix containing all of the up to date and relevant rates; and * the online self-testing component mentor, which provides questions for students of both business and law. Every major aspect of the Australian tax system is covered, with chapters on topics such as goods and services tax, superannuation, offsets, partnerships, capital gains tax, trusts, company tax and tax administration. All chapters have been thoroughly revised. Principles of Taxation Law 2012 is the perfect tool to guide the reader from their initial exposure to the subject to success in taxation law exams.

Advance pricing arrangements : an Australian Tax Office success or a legislative failure?

Australia’s domestic income tax legislation and double tax agreements contain transfer pricing rules which are designed to counter the underpayment of tax by businesses engaged in international dealings between related parties. The current legislation and agreements require that related party transactions take place at a value which reflects an arm’s length price, that is, a price which would be charged between unrelated parties. For a host of reasons, it is increasingly difficult for multinational entities to demonstrate that they are transferring goods and services at a price which is reflective of the behaviour of independent parties, thereby making it difficult to demonstrate compliance with the relevant legislation. Further, where an Australian business undertakes cross-border related party transactions there is the risk of an audit by the Australian Tax Office (ATO). If a business wishes to avoid the risk of an audit, and any ensuing penalties, there is one option: an advance pricing arrangement (APA). An APA is an agreement whereby the future transfer pricing methodology to be used to determine the arm’s length price is agreed to by the taxpayer and the relevant tax authority or authorities. The ATO views the APA process as an important part of its international tax strategy and believes that there are complementary benefits provided to both the taxpayer and the ATO. The ATO promotes the APA process on the basis of creating greater certainty for all parties while reducing compliance costs and the risk of audit and penalty. While the ATO regards the APA system as a success, it may be argued that the implementation of such a system is simply a practical solution to an ongoing problem of an inherent failure in both the legislation and ATO interpretation and application of this legislation to provide certainty to the taxpayer. This paper investigates the use of APAs as a solution to the problem of transfer pricing and considers whether they are the success the ATO claims. It is argued that there is no doubt that APAs provide a valuable practical tool for multinational entities facing the challenges of the taxation of global trading under the current transfer pricing regime. It does not, however, provide a long term solution. Rather, the long term solution may be in the form of legislative amendment.

An examination of recent taxation amendments, corporate law reforms and Queensland legislative reforms affecting nonprofit organisations

There is a tax amendment bill which will be debated. The Government has promised to outline its plan for the reform of the taxation system sometime this year. The plans appear to go beyond the mere introduction of some sort of goods and services tax to reform of the whole taxation system including fiscal relations with the States. Not for profit organisations will find their taxation environment will change. Governments are reluctant to permit exemptions to a GST style arrangements. GST trade offs such as reduced income tax rates and abolishing indirect taxes are useless to nonprofit organisations, as many are already exempt from such imposts. Administrative changes to tax collections may also have an impact. If the government decides to make an individual PAYE taxpayer return optional in exchange for no or standard deductions, this may have an effect on fundraising. The FBT and salary packaging schemes that not for profit organisations use will be under intense scrutiny. A regionalisation of the ATO along the successful model of the ASC would see discrete areas such as not for profit exemptions being centralised in one regional office for the whole of Australia. For example the Tasmanian ASC Office has the responsibility for much work in respect of corporate charities and not for profit companies.