In the early 1970s an examination of South Melbourne was undertaken, to examine the effects of the earlier change of rating basis from taxing buildings to rating the site, done in 1965. The subsequent escalation in numbers and value of building permits shows the effect of the change. Below are the figures for the values of the building permits issued during the last nine calendar years of which the earliest two were under the old basis where buildings were taxed. The later seven are under tax-free conditions so far as the local council is concerned.

In this tabulation other new buildings comprises mainly educational, health, recreational and entertainment, religious and municipal buildings. They are generally non-commercial in nature and mostly built from government funds. The high figure for 1965 included $7,284,000 for the National Culture Centre which would be non-recurrent in its nature.

With business buildings the values fluctuate widely from year to year and a better picture of the trends is seen by averaging two successive years. On this basis the last two years of taxed buildings averaged $4,676,000. Compared with this the lowest pair of years since abolition of local taxes on buildings was 1966 and 1967 which averaged $7,225,000 rising to $14,163,000 averaged over the last two years 1970 and 1971.

The lowest pair represents an increase of 55 percent and the most recent pair an increase of 303 percent above the level of building activity met when buildings were taxed.

Figures for the first six months of 1972 showed a further escalation of the scale of building activity, with permits issued to a value of 19,993,000, exceeding last year's record total with half the year to come. So great is this upsurge that South Melbourne outstripped Melbourne City itself so far as value of building activity per acre is concerned, taking account of their difference in size.

Melbourne City covers 7,765 acres, which is 3 1/2 times South Melbourne Citys 2,203 acres. Over these areas Melbournes $31,120,000 in building permits for the half-year works out at $4,007 per acre, compared with South Melbourne Citys $19,993,000, which is $9,075 per acre i.e. more than double. Small wonder that jealous Melbourne City Council sought to have South Melbourne City amalgamated with it which would involve a return to local taxation on its buildings. The more enlightened plan would be for Melbourne City to follow South Melbourne's example by abolishing its own building taxes to stimulate its own scale of building activity. South Melbourne has demonstrated beyond doubt that untaxing-buildings does provide incentive to regenerate problem areas. South Melbourne was full of such blighted areas before the change which produced the modern miracle of a self-regenerated previously run-down city. South Melbournes performance over the period examined was achieved mainly by private enterprise without dependence on government handouts for urban renewal.

Value of building permits issued $000

Year Buildings taxedNew DwellingsCommercial new buildings Other new buildingsAlterations and AdditionsTotal permits

Public and Private Building

The following figures show the relative content in private and public building activity for each of the nine years.

Year Buildings taxedPrivate buildings $000'sGoverment building $000'sGovt building % Total building $000's