Australia’s economic system should encourage work and reward enterprise. With our recent reputation as one of the world’s top performing economies, why hasn’t such progress delivered benefits to all?
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To appreciate this we need a better understanding of the economic foundations.
This can be done by studying a system of Resource Rentals. Those who benefit from the use of community resources, particularly natural resources, should be required to pay something back to the community for this privilege. It is a simple but far-reaching change - stop punishing labour with taxes and start collecting the rental value of land.
Resource Rentals explained
What we commonly term ‘rent’ is made up of two distinct elements:
Firstly there is rent on buildings and improvements and this must go to the person who owns them. Secondly there is the rent on the land (natural resources) and this should go to the community because:
- community funds the government spending which pays for improved amenities (roads, public transport, hospitals etc)
- the natural increase of population places additional demands on a unique resource - land
You will notice that both A) + B) are natural forces of a community. Importantly, both add to land values. Why should the community’s efforts benefit those privileged enough to own large tracts of land? It’s a guaranteed winner for those in the know.
If government were to claim the part of ‘rent’ created by the community, taxation could be done away with and the average person would be far more prosperous. Einstein, Twain and Alfred Deakin all saw this as essential to achieve our true (economic) freedom.
Eliminate Taxes
Prosper Australia advocates the elimination of all taxes and their replacement with resource rentals. If everybody in Australia paid around 10% of the value of the resources that they controlled to the Government then all other taxes would be unnecessary. This would cover all resources such as land, water, oil, coal, and the electromagnetic spectrum. The resource rental system with which we are most familiar are local government rates.
For the average person, if the land value of your property is $250,000, the occupants would have a combined tax bill of $25,000. You would write one cheque and then be done with taxation for another year.
No longer would we require PAYE income tax, no GST, no sales tax, no company tax, no FBT, no duties, no tariffs, no FID, no BADT, no excise, no capital gains tax, no payroll tax, no other taxes at all.
With these taxes removed, prices of general goods and services would fall significantly. Who could complain of a tax bill of $12,500 each for you and your partner plus a 30 - 50% reduction in the cost of living?
Who wins and who loses?
Our proposal is a tax on rent. If you live off other people by collecting rent then you will be worse off. If you work for a living you will be better off. It’s that simple.
By the way
You cannot escape paying resource rentals - the only choice you have is who you pay them to. If you pay them to the community then other taxes are not needed. If the wealthy - who now own our country - collect them then they will keep getting richer and we will continue to have poverty and unemployment.