How Labor Lost Its Way

By Clyde Cameron, AO

Taken from a recent edition of the Progess magazine

Editor: I recently received a gracious letter from the Hon. Clyde Cameron A.O. in which he offers for publication a long letter he wrote to a Queensland academic researching the roots of the Aust. Labor Party. In it, Clyde lays out in meticulous detail how Labor’s first 24 Commonwealth Conferences (up to 1961) all reaffirmed the party’s commitment to Georgist principles of taxing the unimproved value of land.

Clyde has had a long and distinguished career with the Australian Labor Party, serving in the Federal Parliamentary Labor Party Shadow Cabinet from 1953-72. He was Federal Minister for Labor in the Whitlam Government from 1972-1974, Minister for Labour and Immigration (1974-75), and Minister for Science and Consumer Affairs (1975). In 1976 he was the Parliamentary Delegate to the UN General Assembly.

Here we pick up the more recent history of the Labor Party at its 25th Commonwealth Conference in 1963 where Clyde demonstrates, to the title of a booklet he wrote (available from our Hardware Lane office) “How Labor Lost Its Way”.

That is when Labor began to lose its way. In fact, by the time it reached its 42nd Commonwealth Conference held in Hobart from July 31 to August 3, 2000, the Labor Party could do no more than devote 21 complicated paragraphs on the “Basic Principles” and “Revenue” of “Financing government”, without spelling out its intention to re-introduce Labor’s 1910 law to collect the rental value of land.

In contrast, when the Menzies Government in 1953 had abolished the Federal Land Tax that was introduced by the Fisher Labor Government in 1910, the Federal Parliamentary Labor Party authorised Arthur Calwell to make a solemn vow that when Labour wins Government it would reintroduce the land tax.

On 24 February 1953, Calwell spoke in opposition to what Prime Minister Menzies had done, and told the Parliament: “We of the Australian Labor Party have always believed that the land is the patrimony of the people and that nobody has a complete and absolute title to it …. The land belongs to the people, and its use must be safeguarded and protected at all times …”

Mr. Calwell ended his 33 minute address with the solemn pledge “We have always believed in the land tax, and when happy days come again we shall restore the measure imposing the tax to the statute book of this country.” (Hansard, Vol 221, pp 165-170 passim).

A graduated tax on the unimproved value of land had remained an integral plank of the Labor Party’s Platform until 1961, when sneaky Labor politicians stupidly preferred the Tory option of raising revenue by high income tax and indirect taxation on the poor, and secretly removed the commitment to collect the economic rent of land without ever obtaining Conference approval for the deletion.

So, either by inadvertence, or maybe subterfuge, the fairest and most easily defended form of raising revenue has been omitted form Labor’s Platform ever since 1963.

At the first pre-Budget discussion after the Whitlam Government was elected in 1972, I raised the need to once again bring in legislation to collect the economic rent of land, instead of levying heavy direct and indirect taxation on wage and salary earners.

The following year, I wrote to Treasure Frank Crean asking that my proposal be considered in the 1974 Budget; but nothing happened because, like most adherents of orthodox economics, the Treasury bureaucrats don’t understand the economic rudiments Rent, Wages and Interest.

If only a Labor Government would return to Labor basics, it could abolish the Goods and Services Tax and exempt the wages of lower and middle income earners altogether.

Rent, is not a tax! It is merely giving to the community a rental equivalent of the special advantage of being allowed to hold the exclusive possession of a piece of land which due to its location or productivity, gives its possessor an advantage other don’t enjoy. So, by definition, a piece of commercial land in the heart of the busiest part of a big city, is always worth much, much more to the possessor than the same area in suburbs or in the centre of a small country town.

We must draw attention to the self-evident truth that the true economic value of land is not created by the person who is in possession of it. It is created by those who don’t have possession of it, but who would willingly pay the rest of the community a rent for the special advantage of its location or productivity.

Every minute of every day, the gross injustice of the present system of taxation is staring us in the face. And yet, we still allow the media barons to blind our vision to a better way or raising government revenue.

Working men and women living in our suburbs where the economic rent of their various house blocks is quite minimal compared with every one inch of street frontage on which the city’s skyscrapers are built, will soon see the advantage to be gained by paying the rental value of their land in return for the abolition of today’s heavy direct and indirect taxation, and from the abolition of indirect taxation which they cannot see, but which their pockets feel.

However, as our country lurches deeper and deeper into the mire created by present day fiscal policies, the correctness of our land policy will finally be gladly embraced by all except the wealthy and useless minority which is now permitted to grow fat on the misery of the majority.

The public has become wary of the major political parties which accept large donations from wealthy vested interests. They know that these donations are always matched by demands for special favours at the expense of others.

This is why the scene is set for Labour stalwarts (i.e. average Australian living in their modest suburban dwellings) to demand a return to first principles, the most important of which is to restore Labor’s long-held commitment to collect the rental value of land so that the present burdens of direct and indirect taxation upon the poor can become a thing of the past.

It was in the shearing sheds from 1928 to 1941 that I began my advocacy of the Labor Party’s 60-year campaign for the simple truths expressed by the great Henry George in his books: Progress and Poverty, The Science of Political Economy, The Condition of Labour, Protection or Free Trade, A Perplexed Philosopher, and The Land Question.

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