|Failure in bid for political favour|
One of the recognized problems with large powerful governments is that they
become corrupt. Leftists feel that the best way to deal with corrupt
governments is to make them more powerful. Libertarians, on the other hand,
generally feel that reducing the power of government is a better method.
But Leftists are not the only pitifully naive people in this country. Many
Australian citizens seem to think that government corruption only happens in
other countries. In Australia, the faults of government are those of arrogance
or incompetence, and mistakes are mitigated by the fact that 'at least the
government means well'. Sometimes it's hard to justify that view,
especially in the ACT, where recent fishy land deals involving between 10 and 100
million dollars are involved.
At the risk of oversimplifying ..
The ACT government owns all land (all ACT land is lease-hold, not
free-hold), and keeps land prices artificially high by refusing to release more
land for people to use (apparently affordable housing is a bad idea). When the
government does release more land, it zones it for a particular purpose - not
just 'residential' or 'commercial', but it dictates the detail - eg what what
type of commercial activity is allowed. However, when it actually auctions the
land, it can be quite vague about what that use actually is. Even if the land
is kilometers away from the nearest house, it still controls what can be
bought, sold, or manufactured on that land.
Are you seeing the opportunities for shonky government deals here yet? Well,
even if you are, they are way ahead of you. The government can choose to
'interpret' what the legitimate use for the land is after it is sold - ie, they
can change their 'interpretation' on who actually buys the land. Like one of
their mates, for example.
Canberra Land developer Terry Snow (who owns the Canberra Airport) is a bit
on the nose with the ACT government because his 99 year lease for Canberra
Airport is with the commonwealth government, and he is immune from the whims of
the ACT development laws within the airport grounds. For the last decade he has
been happily building himself a private city on the airport - with office
buildings, and retail outlets - much to the chagrin of the ACT government, who
can be heard frequently railing against him on local radio.
When Snow decided to build a retail outlet on the Airport the local
politicians had two arguments against it
And yes, both of these arguments were made in the same breath. Politicians
truly are scum.
- That it couldn't possibly succeed because it was in an inappropriate place;
- That it would be so successful that it would draw business away from other
ACT retailers elsewhere.
Anyway, hell hath no fury like a politician ignored, so payback was
organized. A 7ha tract of land in the nearest industrial estate (Fyshwick) was
auctioned for 'bulky goods'. Snow tried to clarify exactly what was meant by
that, but didn't get any joy from the local planning minister - not even when
he tried to force the issue in court. Basically the court ruled the politicians
can do as they please.
So he was outbid on the land by one of his rivals, and (surprise surprise)
the government has now decided that it can be used for 'retail'. It hasn't been
'rezoned' - just 'reinterpreted'.
The site was independently valued at around $12 million (for bulky
goods), it went for $39 million (when Snow pulled out of the bidding), and Snow
says that, as a retail site, it was worth around $100 million.
A nice little earner eh? Snow gets frozen out of the deal, and has to put
up with a competing retail site near his own (due to open later this month). He
got fitted up pretty good.
Serves him right for finding a loophole for getting around the meddling local
government, doesn't it? This will teach land developers a good lesson: absolute
power lies in the hands of government. Always give them what they ask for.
It should teach the rest of us a good lesson too: the state is not your friend.