Clear-eyed media commentary in the national interest is rare and sweet.
He opens with a broadside at entrenched interests pretending the changes will affect the economy:
“Imposing a tax on “economic rent” should not change the level of economic activity since, even after the tax, the rate of return to the owner will still be greater than the next best available investment.”
And goes on to endorse the Henry Review’s recommendation to end the owner-occupier exemption from Land Tax and embrace its economic efficiency.
For those who have not or cannot read the Henry Review, Mitchell’s analysis compares our rosy future with the tax-diminished present.
The benefits Henry offers in taxing land rather than jobs and business are simply enormous. The Land Values Research Group estimate these at around a trillion dollars a year. That would nearly DOUBLE Australia’s GDP.
Did I say DOUBLE our income? I did.
The Henry Tax Review is the federal bureaucracy’s wish list. Its aspirational targets are based on sound economic foundations and impeccable logic. We may expect its 138 key recommendations to be implemented over the coming decade – just as the Asprey (1975) and Ralph (1999) tax reviews were.
Implementation may have to meander through a few budgets and innumerable public crises, but do not doubt the will and capacity of the bureaucracy to see the recommendations put in place.
Further to Mitchell’s public-interest line, some business newspapers unite their readership around the money dream and simply hold up a mirror to self-interest. While this is comforting and reassuring to the advertising manager, it does nothing to advance our thinking.
There is currently a circulation battle between the New York Times and Rupert Murdoch’s Wall Street Journal that pivots on just this point. The NYT prefers insight while the new WSJ editorial policy offers Republican Party slogans that appeal to avarice and self-interest.
We are indeed fortunate that our premier business newspaper falls clearly into the former group. Thanks, AFR.