Dear Editor,

So now we discover the effects of reducing state land tax and councils moving away from site rental value for rates to capital improved value (“Victorians Risk Losing Homes”, Herald Sun, July 17).

Deriving public finances from the productive activities of individuals and business has always been an act that creates a disincentive to productive activity. Yet successive state and numerous local governments, spurred on by irresponsible reporting of land tax ‘horror stories’, have done just that.

Because our local and state governments have taxed production and buildings rather than land and sites ordinary Victorians have suffered the highest property prices in history and now mortgage defaults. Under our current tax and rates system this situation is going to get worse rather than better.

It is well known in the field of economics that if public income is derived from resource use, then the price of land falls and great efforts are made improve the productive use of a site, generating employment and income. It is about time that State politicians, local councilors and the media acknowledged the advantages of site value for public revenue.

Lev Lafayette
Media Officer
Prosper Australia
1st Floor, 27 Hardware Lane
(03) 9670 2754