Scalia and Old Splithoof

Should we infer from an interview in New York that Justice Scalia believes that the Prince of Darkness is what some people now refer to as a slow learner (or merely that he's having fun winding up the bien pensants) -

Have you seen evidence of the Devil lately?

You know, it is curious. In the Gospels, the Devil is doing all sorts of things. He’s making pigs run off cliffs, he’s possessing people and whatnot.

And that doesn’t happen very much anymore.

No. It’s because he’s smart.

So what’s he doing now?

What he’s doing now is getting people not to believe in him or in God. He’s much more successful that way. That has really painful implications for atheists.

Are you sure that’s the ­Devil’s work?

I didn’t say atheists are the Devil’s work.

Well, you’re saying the Devil is ­persuading people to not believe in God. Couldn’t there be other reasons to not believe?

Well, there certainly can be other reasons. But it certainly favors the Devil’s desires. I mean, c’mon, that’s the explanation for why there’s not demonic possession all over the place. That always puzzled me. What happened to the Devil, you know? He used to be all over the place. He used to be all over the New Testament.

Right.

What happened to him? He just got wilier.

He got wilier.

And on it goes.

The same interview includes -

While your opinions are delectable to read, I’m wondering: Do you ever regret their tone? Specifically, that your tone might have cost you a majority?

No. It never cost me a majority. And you ought to be reluctant to think that any justice of the Supreme Court would make a case come out the other way just to spite Scalia. Nobody would do that. You’re dealing with significant national issues. You’re dealing with real litigants—no. My tone is sometimes sharp. But I think sharpness is sometimes needed to demonstrate how much of a departure I believe the thing is. Especially in my dissents. Who do you think I write my dissents for?

Law students.

Exactly. And they will read dissents that are breezy and have some thrust to them. That’s who I write for.

For Australian law students there's less entertainment but somewhat more bite in the Melbourne Uni interview with former HCA justice William Gummow.

Historicism

'Giving Credit Where Credit Is Due: A Comment on the Theoretical Foundation and Historical Origin of the Tort Remedy for Invasion of Privacy' by Alberto Bernabe in (2012)29 John Marshall Journal of Computer & Information Law comments that

 In 1890 Samuel Warren and Louis Brandeis published 'The Right to Privacy', which is considered by many to be the most influential law review article in the history of American tort law. Years later, in another famous and influential law review article, William Prosser attempted to complete the work of Warren and Brandeis. His proposal for a new understanding of the right to privacy, however, contradicted Warren and Brandeis’ understanding of it and, in fact, altered the character of the concept. Nevertheless, it was later adopted in the Restatement of the Law Second. Thus the traditional view of the origin of the concept of a privacy tort is that it was created by Warren and Brandeis and refined by Prosser. Although partially correct, this explanation tells only a small part of a more complex and interesting story. A more careful reading of the story shows that the article by Warren and Brandeis has been given more credit than it deserves and that Prosser’s attempt to organize the notion of a privacy torts into a small number of categories was, at best, counterproductive. The real origin of the concept of privacy as an interest that deserves protection in tort law was the common law of torts itself, best exemplified by a decision of the Michigan Supreme Court published nine years before Warren and Brandeis’ article. The right to privacy was not born in a law review article. It was born the day an uninvited stranger happened to be present when a woman was having a baby at home. It is important to give credit where credit is due; not to Prosser, not to Warren & Brandeis but to Chief Justice Marston who, in DeMay v. Roberts, was the real precursor to what we now refer to as the right to privacy.

Gay enough?

'Perceived Homosexuals: Looking Gay Enough for Title VII' by Brian Soucek in (2014) 63 American University Law Review comments that

The conventional view of Title VII holds that gay and lesbian workers can bring discrimination claims based on gender stereotyping but not sexual orientation. Analyzing over 240 federal court cases on gender stereotyping in the workplace, this Article shows that the conventional view is wrong. In cases brought by “perceived homosexuals,” courts distinguish not between gender stereotyping and sexual orientation claims, but between two ways that violations of gender norms can be perceived: either as something literally seen or as something cognitively understood. This Article shows that plaintiffs who look “gay” often find protection under Title VII, while plaintiffs thought to violate gender norms (through known or suspected sexual activity, friendships, hobbies, or choice of partner) almost never win.

By privileging appearances over identity, these cases run counter to the theories of antidiscrimination law that privilege blindness and assimilation. They reverse courts’ usual tendency under Title VII to accept claims based on activities (like child-rearing) known to take place outside of work, but to reject appearance claims, especially challenges to makeup and grooming requirements. And they upend the accounts of “covering” that have been widely accepted in discussions of law and sexuality. Meanwhile, on a practical level, these cases threaten to increase the salience of sexual orientation in the workplace, help entrench the stereotypes they are meant to proscribe, and isolate the claims of successful Title VII litigants from the more assimilationist demands made by gay plaintiffs in areas like marriage, adoption, and military service. As courts have quietly begun granting protection to only the visible subset of gay workers, this Article asks: at what cost, both to LBGT workers, and to ongoing debates over the protection those workers should receive under federal law?

Soucek notes that

William Eskridge has described three mutually reinforcing forms that homophobic prejudice often takes. In its hysterical guise, homophobes think of gays and lesbians as dirty people doing disgusting things. As an obsessional prejudice, homophobes fear that gays are conspiring against them, seeking advantage. In its narcissistic form, homophobes put homosexuals in the category of “‘the Other,’ a group whose differentness helps the homophobe define her or his own sexual identity.” These three forms of homophobia correspond tightly—and troublingly—to the three worries just canvased in this Section.

First, disgust. Thoughts of unseen sexual acts not only drive homophobia in its hysterical form, but perhaps help to explain as well why courts have taken such anomalous refuge in appearances in cases involving homosexuality. Even if squeamishness about gay sex does not motivate courts’ reasoning in these cases, the opinions themselves continue a history in which gay sexuality is treated as unmentionable. The opinions’ insistence on categorizing the claims as instances of gender stereotyping rather than sexuality simply reenacts this silencing.

Second, by privileging the subset of Title VII plaintiffs who are visibly at odds with those generally bringing assimilationist gay rights claims, courts appear responsive to worries, expressed most often in marriage debates, that gays and lesbians are conspiring for “special rights.” Separating the progress made by a certain type of gay plaintiff in employment discrimination law from that being made elsewhere in the law allows courts to sidestep the concerns of those who see protections like those enshrined in ENDA as a stepping-stone to same-sex marriage. Doing so may minimize backlash, but insofar as ENDA-like protections are a steppingstone to broader gay rights, courts may be hampering that movement. Moreover, the concerns of conspiracy theorists—those who see gays and lesbians as conspiring for rights—are reinforced and even embodied by the many courts that write of homosexuals trying to “bootstrap” their way into Title VII.

Finally, by incentivizing perceptible differentiation, courts contribute to the “othering” of gays and lesbians. This worry is perhaps the most troubling one of all, for it suggests that by granting a subset of gays and lesbians protection under Title VII, courts might actually be bolstering perceived differences between gay and straight workers, increasing rather than disrupting the salience of sexual orientation in the workplace, and reinforcing and us-them mentality in which balkanized factions of workers compete in what is seen as a zero-sum game.

Soucek concludes -

If the case law as it currently stands poses the threats just described, what is to be done? In one sense, this is the least interesting question of this Article, for an answer is so obvious. Passage of the Employment Non-Discrimination Act (ENDA) or a similar law would instantly dissolve the Title VII dilemma by taking away its second premise: Congress’s failure to explicitly protect sexual orientation under Title VII. Doing so would offer gay and lesbian workers protection from discrimination that the First Circuit has called a “noxious practice, deserving of censure and opprobrium,” the Second Circuit has castigated as “morally reprehensible whenever and in whatever context it occurs,” and even the Ninth Circuit’s dissenters in Rene described as “appalling and deeply disturbing.”

The goal of the previous pages has not been to argue for ENDA, however. In fact, the preceding argument enters that debate only indirectly. My aim here has been to correct the standard story told about gay workers and Title VII — to show that, in cases involving perceived homosexuality, courts have settled on an strange and unstable compromise: protecting only those who look or act sufficiently “gay” at work. This is a result that should come as a surprise to most, for it belies the conventional wisdom that sexuality claims uniformly fail under federal employment discrimination law. Moreover, it runs counter to standard theoretical and doctrinal stories about the role of appearances within antidiscrimination law in general.

What my discussion here shows is that courts—faced with the Title VII dilemma and, if the concerns just quoted are representative, their discomfort with the treatment some gays and lesbians experience in the workplace—have crafted a largely unnoticed, de facto ENDA of their own. It is an ENDA that no imaginable Congress would pass. And as I argued in the previous Part, it is quite possibly an ENDA that we should not want.

What makes this Article an indirect intervention into the ongoing debate over the real ENDA is its revelation that the choice facing Congress is not, as the standard story would have it, between ENDA and a status quo in which gays and lesbians get no protection under Title VII. That description of the status quo is simply not true. In the federal courts today, “visible” homosexuals—those who look or act sufficiently gay in the eyes of co-workers and courts—often already do get protection. I do not know, frankly, how this revised understanding of the status quo might affect the debate over ENDA were it better understood. Would conservatives still want to the preserve the status quo under Title VII if they knew that this meant that employers could discriminate against assimilationist gays, but not ones who flaunt? Would liberals redouble or relax their efforts for full protection, knowing that some protection is already on offer, but that this might, in some ways, be worse than no protection at all? It is quite possible that the current state of the law in this area is one which no party in the debate would choose. That is an important point to realize as the choice between ENDA and the status quo continues to be debated.

This Article’s argument also raises a warning about ENDA itself, however. ENDA proscribes employment discrimination because of “actual or perceived sexual orientation or gender identity”—where sexual orientation is defined as “homosexuality, heterosexuality, or bisexuality,” and gender identity is defined as “the gender-related identity, appearance, or mannerisms or other gender-related characteristics of an individual, with or without regard to the individual’s designated sex at birth.” ENDA includes exceptions which allow employers to establish “reasonable dress or grooming standards” and to restrict access to “shared shower or dressing facilities in which being seen unclothed is unavoidable.”

The explicitness of the visibility criterion embedded in the latter exception is worth noting.

These provisions make clear that, after ENDA’s passage, cases like Brian Prowel’s could proceed directly as sexuality discrimination claims rather than claims of gender stereotyping. Or, depending on how courts treat gender stereotyping claims after ENDA, someone like Prowel could perhaps bring an intersectional claim as an effeminate gay man. Whether courts will continue reading “sex” in Title VII expansively once sexuality and gender identity (including gender-related appearance and mannerisms) are covered elsewhere in federal law is an open question, however. Perhaps Prowel’s intersectional claim would not be sex (Title VII) plus sexual orientation (ENDA), but rather sexual orientation and gender identity, both as covered under ENDA.

But what about Christopher Vickers? Were he actually gay, Vickers’ claim would indisputably be covered under ENDA. But though Vickers was thought to be gay, his actual sexuality was never revealed either at work or in court. Read straightforwardly, ENDA would seem to protect Vickers through the phrase “actual or perceived sexual orientation,” repeated sixteen times in the bill. This should be read to mean that ENDA protects employees from discrimination based on what others think their sexual orientation to be. That is to say, “perceived sexual orientation” in ENDA undoubtedly concerns thought, not vision.

This is the very assumption proven wrong, however, in Vickers and the many cases like it. Current Title VII case law more often offers a literalist reading of perception instead, however bizarre the results. Were ENDA’s language about “perceived sexual orientation” to be read literally, employees would be protected if they were gay, or if they were not gay but looked gay. Yet Vickers and others merely thought to be gay might still fall through the cracks. This may sound absurd, but it is only slightly more strange than the current state of affairs in which gay employees must look or act sufficiently gay to receive protection under not just perceived orientation, but also appearances, mannerisms, and being seen in the shower—makes it all the more possible that courts’ literal reading of perception could linger. As so often with questions of visibility, we might just have to wait and see.

Mostly

'Why Data Privacy Law Is (Mostly) Constitutional' by Neil M. Richards in Intellectual Privacy (Oxford University Press, Forthcoming) argues

that privacy critics arguing that most privacy rules create constitutional problems overstate their case. Since the New Deal, American law has rested on the wise judgment that, by and large, commercial regulation should be made on the basis of economic and social policy rather than blunt constitutional rules. This has become one of the basic principles of American Constitutional law. Although some observers have suggested that the Supreme Court’s recent decision in Sorrell v. IMS Health (2011) changes this state of affairs, such readings are incorrect. Sorrell involved a challenge to a poorly-drafted Vermont law that discriminated on both content and viewpoint. Such a law would have been unconstitutional if it had regulated even unprotected speech. As the Sorrell Court made clear, the real problem with the Vermont law at issue was that it didn’t regulate enough, unlike the “more coherent policy” of the undoubtedly constitutional federal Health Insurance Portability and Accountability Act of 1996.

Data privacy law should thus rarely be thought as implicating serious constitutional difficulties, which is a good thing. As we move into the digital age, in which more and more of our society is affected or constituted by data flows, we face a similar threat. If “data” were somehow “speech,” virtually every economic law would become clouded by constitutional doubt. Economic or commercial policy affecting data flows (which is to say all economic or social policy) would become almost impossible. This might be a valid policy choice, but it is not one that the First Amendment commands. Any radical suggestions to the contrary are unsupported by our Constitutional law. In a democratic society, the basic contours of information policy must ultimately be up to the people and their policymaking representatives, and not to unelected judges. We should decide policy on that basis, rather than on odd readings of the First Amendment.

Parentage

'The Birth of a Parent: Defining Parentage for Lenders of Genetic Material' by Lynda Wray Black in (2014) 92 Nebraska Law Review argues that

With the advances in assisted reproductive technology, the scholarly quest for an all-inclusive legal definition of parentage has proliferated. All too often this quest becomes muddled in Constitutional tangles, in shifting mores, in quagmires of evolving and inconsistent legal parameters on what constitutes a “family”, and in the perceived need to reconcile conflicting state laws governing marriage, adoption and surrogacy contracts. This article suggests a return to the basics. Parents are born with the birth of a child. Notwithstanding the scientific breakthroughs in reproductive technology and the more inclusive modern understanding of the family unit, every child begins with two (and only two) suppliers of genetic material and one (and only one) gestational carrier. Thus, the only logically clear starting point for a legal definition of parentage begins with these three claim-holders to parentage. Once the examination of the concept of parentage is disentangled from the complications of related, but logically independent, legal questions, it becomes clear that unless and until the rights and obligations of parentage are either (voluntarily) contractually waived or (involuntarily) judicially or statutorily terminated, the law must recognize as parent any individual (regardless of his or her gender, sexual orientation or marital status) who is biologically related to a child.

Black comments

Historically, questions surrounding the parentage of a child were limited in scope to the identity of the biological father for support or inheritance purposes. With time, additional parentage issues presented themselves, namely, the replacement of a biological parent through adoption or the use of surrogacy arrangements to award parentage contractually to infertile heterosexual couples. Consequently, until fairly recently the totality of parentage questions could be resolved by reference to a state’s paternity, adoption or surrogacy laws and judicial decisions. If there were a question regarding the identity of a child’s father, states provided several alternative means by which a man could establish parental rights in a child. Likewise, in the surrogacy context, under both traditional and gestational surrogacy arrangements, the statutory and common law of a state governing surrogacy contracts determined who shall be recognized as the legal parents of the child. With respect to adoption, state law has detailed the process by which the rights of the biological parents are terminated and parental rights are established in the adoptive couple. Within each of these evolving bodies of law, however, the starting point of parentage is a biological connection to the child.

More recently, the parentage conversation has been extended to children of same sex couples. Generally, the legal discussion surrounding the parentage of children of same sex couples has focused on establishing parentage using the laws of adoption. This focus is misguided for children born “out of” a lesbian relationship. The adoption process creates a relationship in one who is not a biological or birth parent. Not only does parentage based upon an adoption model relegate same-gender parents to a conceptually secondary, rather than primary, parental status, all too often the adoption statutes limit the right to adopt to “couples” which brings both the gender and the marital status of the adoptive parent into consideration. Adoption laws are premised on the absence of or termination of someone else’s parental status coupled with the demonstrative intent to parent by the adoptive parent. Logically, adoption statutes place both qualitative and quantitative limits on who may fill the parental vacancy through the right to adopt. Someone else’s pre-existing status as parent could constitute sufficient reason for denial of parentage by adoption; an analysis of all parties with parental claims is required. Acquisition or continuation of traditional parentage based upon consanguinity, by contrast, requires neither satisfying a qualitative standard nor referencing the parental rights of any other person or persons. The determination is made as if in a vacuum with the vertical relationship of child to biological parent as the only consideration. The rights of one biological parent are contemporaneous with, equal to and not mutually exclusive of the rights of another biological parent.

The questions of parentage posed by the introductory hypothetical are more analogous to traditional questions of paternity based upon establishing the biological connection to the child than they are to questions of creating legal parentage in a genetic stranger by adoption. Traditional thinking, namely, that a child can have only one mother, has curtailed the logical extension of establishing paternity by biology to the establishment of maternity by biology. As will be addressed in Part II, maternity has been understood as a question of fact, that fact being childbirth. Maternity is still a question of fact, but the scientific facts have changed to permit two biologically related females for one child. It has become prescriptive rather than descriptive to limit the label of biological mother to either (i) the genetic mother or (ii) the gestational mother. If a biological connection to the baby is the starting point for legal parentage, the law must embrace the science supporting the biological connection of not only the genetic mother but also the gestational mother. ART terminology which is deemed to waive the biological connection of parentage must be revised, as the suppliers of sperm and eggs may be intended parents. In addition, parentage statutes which remain gender-specific, with one individual identified as father and the other identified as mother, simply do not contemplate or accommodate parentage by same-sex couples. Consequently, the statutes of many states would fail to acknowledge the parentage of both mothers in the introductory hypothetical. If the titles of parent are gender limited, once the “position” of mother is filled, the only parental vacancy is for a father.

This article maintains that an intended parent with a genetic relationship to a child should be entitled to full legal parental rights and obligations with respect to that child irrespective of the genetic parent’s gender. In order to achieve this equality, the law must replace gender specific biological routes to parentage with a gender-neutral genesis of parentage. In the remainder of Part I will discuss two leading parentage cases (one from the state of California and the other from the state of Florida) in which a biological mother is seeking recognition of her parental rights when such rights have been cut off by her former partner who is the child’s gestational mother. Part II of this article will examine two flaws in current parentage statutes that have fostered this inequality, namely, the false conflict between the gestational and the genetic mother and, secondly, the unintended outcome of gender-specific paternity statutes that provide men, but not women, with several means by which to establish parental rights. Part III suggests that, in light of the steady increase in the number of nontraditional families and the claim to parentage by the adults in these nontraditional relationships with respect to the children they intended to and did raise as their own, current statutory schemes no longer provide a reliable starting point for the determination of parentage. This part will advocate a paradigm shift, namely, that both statutes and courts return to the essence of the parent-child relationship: genetics. By using the genetic relationship as a foundation for the passage of gender-neutral parentage statutes and by embracing advances in ART which extend the biology of parenting to a third gestational parent, biology (limited by the intent to parent) will be the first cornerstone of legal parentage. Part III will propose a parentage decision tree that incorporates both the intent to parent and the biological bases for parentage without respect to the gender of the parent. Additionally, Part III will demonstrate that gender-neutral parentage statutes are consistent with other existing parentage concepts and public policy positions. Part IV will discuss the measures that private parties, state agencies and courts should take to resolve parentage cases in a gender-neutral manner until state legislatures enact explicit gender-neutral parentage statutes.

Conspiracy

The Supreme Court of Victoria, Court of Appeal in Director of Public Prosecutions (DPP) (Cth) v Fattal [2013] VSCA 276 has dismissed applications for leave to appeal against conviction and sentence of three people convicted of conspiracy to do acts in preparation for or planning of a terrorist act contrary to ss 11.5(1) and 101.6(1) of the Criminal Code Act 1995 (Cth).

According to the Crown in R v Fattal & Ors [2011] VSC 681 the proposed terrorist act was to attack the Holsworthy Army Base in south-west Sydney, killing as many soldiers and other people as possible.

Among other matters the Court of Appeal considered whether judge of first instance sufficiently directed the jury as to the need for the Crown to prove intent to advance Islam through violence, whether the strength of the Crown case against one co-accused was so much weaker as to require that the indictment be severed, whether proscription of advancement of religious causes by violent means is a law ‘for prohibiting the free exercise of any religion’ contrary to s 116 of the Commonwealth Constitution, and whether evidence of the accused’s hostility towards Australia and her citizens should be excluded as evidence of which the probative value was outweighed by prejudicial effect.

In relation to religious freedom the Court stated that

125 The argument advanced under Ground 9 was that El Sayed had a constitutional right to freedom of religion under s 116 of the Commonwealth Constitution and thus that he was free to seek the fatwa.

126 That argument fails in limine. Section 116 of the Constitution forbids the making of any law ‘for prohibiting the free exercise of any religion’. It does not confer an absolute freedom of religion. As Gummow J said in Kruger v The Commonwealth, the preposition ‘for’ directs attention to the objective purpose of the law in issue and, as McTiernan J observed in Adelaide Company of Jehovah’s Witnesses’ Inc v The Commonwealth, the section is most likely not aimed at executive action. The question for the purposes of s 116 is whether the Commonwealth has, by passing s 101.6 of the Criminal Code, made a law in order to prohibit the free exercise of any religion.

127 Clearly it has not. The proscription of the advancement of religious causes by violent means restricts the freedom of an individual to advance a religious cause by violent means. But, as Starke J observed in Adelaide Company of Jehovah’s Witnesses’ Inc v The Commonwealth, s 116 does not confer an unlimited licence to propagate or disseminate subversive doctrines or, we add, to inflict violence upon others. It leaves Parliament empowered within the scope of its constitutional authority to enact laws reasonably necessary for the protection of the community and the interests of social order. There is no right in the name of religion or in pursuance of some perceived religious duty to the Almighty to disobey those laws; the ‘critical question is whether a law is reasonably necessary for the protection of the community and in the interests of social order’. We think it plain beyond argument that s 101.6 of the Criminal Code is just that.

128 Finally, we note that, although there was a suggestion in El Sayed’s written submissions that this matter attracted the operation of the Charter of Human Rights and Responsibilities, the notion was rightly abandoned in the course of oral argument. Clearly, as a State enactment, the Charter cannot affect the proper interpretation of Commonwealth legislation any more than any other Act of the Victorian Parliament can affect the interpretation of Commonwealth legislation. To the extent of any inconsistency between the two, the latter, if otherwise valid, will necessarily prevail by reason of s 109 of the Constitution.

The Court also dismissed a Crown appeal against the sentences imposed, ie a term of 18 years’ imprisonment with a minimum term of 13 years and six months’ imprisonment, with the Cth Director of Public Prosecutions contending that those sentences (less than life imprisonment) were manifestly inadequate.

Bubbles

'Melbourne’s High Rise Apartment Boom' [PDF] by Bob Birrell and Ernest Healy of the Centre for Population and Urban Research at Monash University foreshadows pain for the stacked dogboxes - little boxes, little boxes, and they're all made of tickytacky etc - at Docklands and similar locations in Melbourne.

The authors comment

There has been an unprecedented surge in high-rise apartment completions in Melbourne since the late 2000s – far more than in Sydney, which was once the epicentre of such development. They are located primarily in the inner city, particularly the City of Melbourne (COM) and suburbs on the fringe of the COM.

The apartment surge is just beginning. The inner-city skyline was transformed in the three years 2010-2012 when 22,605 apartments were completed. This transformation will accelerate in the next few years when around 39,000 additional apartments are likely to be completed. These are all apartments which have been released for sale (that is, part of developments where off-the-plan marketing has begun) or where construction has commenced.

The apartment boom is driving Melbourne’s extraordinary share of Australia’s dwelling approvals. In 2012-13 they constituted 24.3% of the Australian total. Yet Melbourne’s share of Australia’s population in mid-2012 was 18.5%.

Does this mean that households in Melbourne are embracing inner-city apartment living? Our analysis indicates that it does not. Rather, it is an investor rather than an occupier driven boom. Investors are responding to financial incentives, including those deriving from negative gearing.

Apartment residents remain overwhelmingly young singles or couples who are renters. As in the past, they are transients who will move into family-friendly housing when they decide to raise a family. Most of the growth in new households in Melbourne will be looking for such housing. There is no large potential source of apartment occupiers (including empty nesters) come near to filling the expansion in the apartment stock expected.

Melbourne is not like Sydney, where restrictions on outer suburban expansion have compelled 11% of households (including some families with children) to occupy apartments. In Melbourne, there are huge tracts of outer suburban land zoned for the development. Detached houses can be bought for far less than two bedroom apartments in the inner city. By 2011, only 4% of households in Melbourne lived in apartments of four stories or more.

In the case of the COM, there has been an increase in the number of those who live and work there. Nevertheless, by 2011, they comprised just 27,912 of the 344,790 persons who worked in the COM. Overseas students have also been an important source of apartment occupiers. In addition, to our surprise, there has been an increase in the number of those who live in the COM and work outside it. They increased by 5,246 between 2006 and 2011 to 19,108.

There will have to be massive increases in the numbers in each of these categories if they are to approximate the expected surge in apartments on the market. Local apartment developers, who dominate the inner suburb apartment market are backing off on new proposals. Overseas developers are undeterred. They have the resources to outbid locals for sites in the inner city and are likely to approach 100% of completed apartments in this area by 2016. They are responsible for the recent surge in proposals for CBD apartment towers.

The authors argue that

Melbourne is a more attractive to developers than Sydney because there are more potential sites for high-rise apartment projects which can be developed at prices affordable to most investors (less than $500,000). These pricing priorities are also responsible for the increasing share of apartment projects comprising tiny apartments (mostly sub 50 square metres in net living area).

Inner Melbourne has also attracted because of its amenities. These have been enhanced by massive State Government and COM investment in infrastructure (including CityLink and Southern Cross Station), public spaces (Federation Square), parks (Birrarung Marr) and laneways. This investment was intended to enhance Melbourne’s prospects of becoming a centre of knowledge-intensive industries by enhancing the city’s liveability. It was hoped that this would attract the ‘creative class’ believed to drive this transformation. For its part, the COM has long wanted to transform the CBD and surrounds into an inviting mix for residence, work and entertainment.

This investment has helped in the fashioning of a ‘Melbourne Story’, which has been particularly attractive to Asian developers and investors.

However the apartment boom is squandering this investment. It is delivering tiny, poor quality apartments that will repel rather than attract the ‘creative class’. The COM planners have recently issued a withering critique of the outcome. The chief advocate of the COM’s original vision, Rob Adams, has declared that the current ‘flood’ of apartments has gone too far.

Despite warnings of an apartment glut the State Government and the COM are pressing on with plans to facilitate further urban renewal. They include Fishermans Bend and the City North and Arden-Macauley precincts of the COM to the north of the CBD. The COM’s planning blueprint assumes that the number of dwellings in the COM will increase from 67,533 in 2012 to 110,533 in 2031.

The State Government wants the apartment boom to continue because it is one of the few bright lights of the current Melbourne economy. It can ignore the COM planners’ concerns because it holds the planning authority for apartment towers in excess of 25,000 square metres floor space. It is approving almost all proposals put to it. The outlook is that the investment in the city’s amenities will be squandered. The city is heading towards becoming a dormitory rather than a centre for knowledge-intensive industries. The balance between apartments and offices in the CBD is swinging rapidly towards the former with the prospect that apartments will crowd out sites for offices in prime CBD locations.

In the three years 2013 to 2015 there will be three times the amount of floor space completed for apartments in the CBD and Docklands for new office space. The planning elites shaping Melbourne’s future are ignoring the disconnection between the investor driven apartment boom and real housing preferences. Their plans for the inner city’s expansion and for its economy are based on a property boom that our analysis indicates will implode.

 They go on to suggest that the COM case for massive inner-city growth is unconvincing

The COM commissioned two consulting firms to advise it on the city’s economic prospects. The first by ACIL Tasman puts some flesh on the widely disseminated claim that the COM is already a thriving knowledge city. The report is optimistic that the COM is well placed to contribute to the long-standing State Government ambition to make it a focal point of knowledge industries in Victoria. It states that the COM already has recognized strengths in fields ‘such as advanced manufacturing, biotechnology, creative industries (particularly design) event management, financial services’ and so on. It also has key ‘World Class’ assets including the Walter and Eliza Hall Institute and the University of Melbourne.

ACIL Tasman repeats the Florida thesis discussed earlier in the context of the Victorian Government’s original vision for Docklands. It states that:

Melbourne has many of the attributes that Richard Florida (the leading international theorist on what attracts creative people to certain locations) believes the “the creative class” attaches much importance to, such as a vibrant and diverse street life; compact, distinctive and authentic neighbourhoods with a diversity of buildings; a finely meshed street pattern; and pedestrian-friendly public spaces.

The Report provides a good account of the kind of economy so many of Australia’s leaders aspire to create, now that the impetus from the mining investment boom is waning. The hope is that the exports of services into Asia will fill the gap. Unfortunately, the Report does not document the COM’s achievements so far. There are no case studies of successful start-ups, for example, in bio-technology. It does not acknowledge that the ‘World Class’ assets, including the Walter and Eliza Hall Institute are mainly academic research institutes almost totally dependent on Commonwealth and State government support. The Institute does indeed have a fine research record, but the revenue it generates from royalties or other commercial offshoots is minimal (just $2.5 million in 2011).

This is not to knock these aspirations. It is vital for Victoria that new knowledge industries do emerge in the Asian Century. The point is rather that the aspirations expressed in the ACIL Tasman Report and the COM’s own claims to be a knowledge city are a flimsy base for the COM’s dwelling and population growth projections. The second report commissioned by the COM was by SGS Economics & Planning (SGS). It is entitled, Understanding the property and economic drivers of housing and was released in January 2013. It offers an interpretation of the factors generating the surge in job creation in the city between 2006 and 2011. It argues that these factors will continue to drive job creation in the COM and that many of those attracted to these jobs will be interested in residing in the COM.

The SGS report shows that, over the thirty years 1961 to the early 1990s, there was little growth in employment in the CBD or in the COM. Thereafter, job growth was rapid, except for a slowdown in the early 2000s. As noted earlier, an unprecedented 46% of all job growth in Greater Melbourne occurred in the COM over the years 2006-2011.

The report makes a convincing case that this job surge in the COM since early the 1990s was a consequence of successive Hawke and Keating Government economic reforms. They included the floating of the Australian dollar, the dismantling of restrictions on foreign financial firms operating in Australia and on international financial transactions and tariff reductions which forced Australian-based enterprises to compete in the international marketplace.

The result was a massive increase in trade, information and of commercial interchange with the global economy. SGS argue that Sydney and Melbourne have been the main beneficiaries of this process. They have provided the dominant sites for the international and domestic firms engaged in this interchange. Also, their size has generated agglomeration effects which SGS puts great store on. These refer to the synergies and efficiencies which emerge when there is a high concentration of professional service firms clustered around the main domestic and international institutions in the service economy (like the big four banks and Telstra). According to SGS, these agglomeration advantages will become more pronounced as Sydney and Melbourne continue to grow.

Though to some degree in Sydney’s shadow, Melbourne has done relatively well in recent years because it has provided more space for office expansion (Docklands), much cheaper rents than are available in Sydney and improvements in ease of access to the CBD (CityLink and the Ring Road), again by comparison with Sydney. SGS argue that:

For Melbourne, the ongoing shift in global trade is likely to mean continued growth of the knowledge intensive and Advanced Business Service sector. This is one key area in which Melbourne is internationally competitive… Given Melbourne is a location with high liveability and a highly skilled work force, it is very likely it will continue to be an attractive location for such firms in the long term, provided, of course, the city can maintain the competitive strengths inherent in its urban quality and functionality.

Interestingly the SGS report does not play up the ‘knowledge city’ factor. It merely suggests that, with continued growth in the finance sector and associated professional services, this will attract more professionals and in the process generate demand for a range of supporting services in retail, cafes etc. SGS goes on to say that: ‘The amenity that this creates will also attract some firms e.g. creative architecture/ IT/ start-up firms into the surrounding areas.’ The operative word is ‘some’.

The SGS report is much thinner on the prospects of the additional workers it believes will work in the COM deciding to reside in the COM. It asserts that the ‘shift towards inner city living is likely to continue’. It cites international evidence that well paid knowledge workers like to live in ‘dense urban environments and large cities, reside in well-established knowledge communities and seek cultural and education opportunities as well as affordable housing’. But, there is no probing into whether the kind of apartment stock being added to the COM will be attractive to these knowledge workers. Nor does SGS grapple with the recent evidence, cited above, that only a minority of the extra persons employed in the COM were resident there by 2011.

The weak point in the SGS report is that it does not substantiate its argument that the COM is now ‘internationally competitive’ in the provision of services. The COM has undoubtedly benefited from its role as a financial mediator between Australia and the rest of the world. But, the main impetus to employment in the COM in recent years has been the provision of financial and professional services within Australia which are linked to Australia’s rapid economic and population growth during the 2000s and the increased income of most its residents.

Employment growth in the COM has already diminished, with the peaking of the mineral investment boom and the overall slowdown in the Australian economy. As credit growth has slowed, the big banks and finance enterprises are no longer taking on new staff. Rather, some are looking to augment their profits by aggressive outsourcing and offshoring. As a consequence, the Melbourne office market is softening. According to BIS Shrapnel, Melbourne faces a ‘bleak’ two year period.

One indicator is that the net absorption of office space in the Melbourne CBD contracted slightly in the year to July 2013.

There is reason to believe that there will be no rapid revival of the housing and consumption boom of the 2000s. As a number of economic commentators have pointed out, during the commodity price boom of the past decade, nearly half of the increase in Australian residents’ real income came from the improvement in Australia’s terms of trade. As a consequence residents were able to buy more imported stuff per Australian dollar than before.

This source of real income growth has come to an end with the slump in commodity prices and decline in the value of the Australian dollar. Maybe it is just a short-term phenomenon. Nonetheless, its impact will be significant while it lasts because, if the terms of trade do continue to fall, the impact will be felt as a contraction of real income. The outlook, according to the Australian Treasury, is that Australia’s terms of trade will decline steadily over a prolonged period to 2029-30.  If this is the case, one major source for the property boom of the 2000s, according to the Reserve Bank and other authorities quoted earlier, will diminish. This is the increase in real household income which made it possible for households to take on high levels of mortgage debt and the mortgage payments resulting.

If SGS is correct, the situation will be rescued by Melbourne’s ‘internationally competitive’ knowledge-intensive industries. However, the recent record is not encouraging. The education industry has been by far the largest exporter of services in Victoria. This derives from the expenditure of overseas students on fees and expenses while in Australia. The COM has been an important site for this industry, not just via enrolments at RMIT and Melbourne University but also by branches of regional universities, notably Central Queensland University. It has also been a focus for TAFE institutions offering hospitality courses. At its peak in the late 2000s, there was a string of kitchens and hairdressing salons in the COM providing such courses. Most are now gone. As noted earlier, enrolments in the higher-education sector have also declined. The export of education-related services from Victoria, which peaked at $5.5 billion in 2009-10 have since been estimated to have fallen to $4.4 billion in 2011-12.

Official estimates for the export of telecommunication and business services from Victoria indicate that the level is low relative to NSW and declining. The peak year for the export of business services (which includes legal, accounting and management consulting as well as architectural, engineering and scientific services) was in 2008-09 when they reached $1.93bn (compared with $4.4bn in NSW). After falling sharply in 2009-10, they have since increased to $1.87bn in 2011-12.  We conclude that there is no convincing case that the COM will repeat the jobs boom of the period 2006-2011 in the medium term. If this is the case, it is unlikely that this important driver of demand for apartments will continue as in the recent past.

We conclude the warnings by BIS Shrapnel and others are correct. The massive number of apartment completions to be completed from already released projects plus those soon to be released by overseas developers in the CBD and vicinity is far more than is likely to be needed.