Still disagree. For the vast majority of Australians, most of their wealth lies in the home that they own outright. If house prices take a dramatic fall, many of the fellow Australians around you will be far poorer. Many Australians are unaware of how to release the wealth they have in their own home without actually selling. However, disregarding even this for a moment, it is possible for a retired older couple to sell their home and rent, and put the money towards a nice trip around the world or a great car. I do not even need to ask my parents if they would be concerned about their house value falling by 40%. It's obvious that they would be.

Me in blue.. just to keep it fresh and tangy…
32% of the homes are outright owners. It was 47% in 1965.

It may be that the pensioner or part pensioner is fine with the income stream, and those pensioners do not care, as much as a leverage buyer, about falling prices.

That's still $1,750 pa for a $350K house. I do not know of too many people who live in such houses and of that demographic who can pull an additional $1,750 out of their wallets for land tax. I've had some clients in tears just worrying about meeting their electricity and water bills. We have more deep-set problems than a land tax is going to resolve. Far from it, a land tax of such proportions only compounds the problem. Also, it kills the great Australian dream for even more people because we'd rather rent than contend with high land tax. With your other measures, property is going to become a very unfavourable investment. So who's going to provide all those properties for people to rent? The government. And guess who's going to be paying for this, the equivalent of rent assistance for not just a portion of the population, but the entire nation? That's right, you and I, in tax and by the bucket-load. Oh wait, you only pay tax if earning over $40K pa.

It is designed to be anti-speculation law and to decrease the attraction to residential property speculation.

It is cheaper for the government to provide negative gearing benefits to property investors rather than to provide subsidised housing to the public. If it were the other way around, would they not have done so already?

If we do as you say (and also increase tax-free threshold to $40K pa, which would undoubtedly increase taxes for those above this threshold), we are not helping Australia to progress and prosper. We're simply creating a nation of underachievers. High flyers and overachievers who naturally earn a higher income will head overseas and tax evasion will be rife amongst those who do remain, just to stay under the $40K threshold. 

Noted, however I still disagree with the premise.

See above point regarding land tax and even our discussion immediately above regarding death taxes. The FHB class is officially dead if we go ahead with your proposal because nobody would want to own a house. Everyone would prefer to rent with the government providing our housing and with us all STILL paying for the said housing. And I doubt if the government can maintain rental properties as well as some landlords. Population will take a dive because the only people who will be staying away in droves are the more successful people in Australia. And yes, I mean they'll be leaving the country, not just refusing to invest in it.

Nothing wrong with a nation of renters. As many renters now as outright owners. It is the other 38% that are the worry….

Precisely correct. And so I'm bewildered…you still want to increase welfare payments? Bear in mind now that in this scenario, it wouldn't be long before the majority of the people in Australia will be those earning $40K or less and paying no taxes. So, who's going to supply the money for welfare payments? The politicians? The welfare system will spontaneously implode.

Land tax, increased GST, mining tax, international nuclear waste storage revenues ($100 billion) etc…

Look, laying down 'laws' these days is uncool. You got to find a solution. Obviously the rent increases in those areas so happened because of the lack of supply, and there's actually demand to support the said rental increases. What are we supposed to do about that? Someone provides the service and somebody else is prepared to pay for it too. Nobody is forcing renters there to pay those prices. They could live in a tent is they so choose, or take a flight in and out each day.

They are livingin tents in Gladstone and renatl increases due to mining and natural disasters needs to be created, now.

Define 'permanent'. What measures should we implement to ensure an Australian so returning will actually stay and work in Australia for the rest of their life? Also, do they necessarily need to be 'young'? Are there going to be age limits? What about a person who decides to come back, work for say, 2 weeks and then live of the massive welfare benefits that would now be present under this scenario with increased welfare payments?

No age limit and wiped out when they buy Australian property on their return..