Sometimes the ignorance of experts makes my blood boil. Why can’t they do the arithmetic, the sums plainly before them?
The Victorian Transport Plan will cost $38 billion and produce benefits of $180 billion, according to a state-commissioned report by Ernst and Young.
If these numbers are right, the Plan is a no-brainer and should proceed without delay.
Yet the Victorian Government is struggling to find the money to pay for their time-shrinking, space-shrinking engineering marvels. They are considering tolls on the Western Tunnel, so we can add wallet-shrinking for Westies to the time- and space-shrinking benefits.
The ‘x’, the missing factor in our experts’ calculations is this: most of the benefits will be capitalized into land prices around the proposed road and rail works.
So local landowners are getting a $180b uplift in values and the Victorian taxpayer a $38b liability.
Nice work! And those big landowners didn’t lift a finger, didn’t take a sliver of risk, and certainly didn’t vote ALP.
Here is a classic proof of the benefits of Land Tax.
Oh, if we had a decent land tax, the landowners would still make a cool $180b, but have shared the uplift back with the government and recycled the lost $38b.
That’s a lot of money. Think of the extra public transport, freeways, bike paths, water recycling, schools, hospitals and parks we could have.
Shrinking taxes on mobile factors like labor and capital and increasing them on the immobile – land – would give us a economic Golden Age. Just ask the Secretary of the Treasury Dr Ken Henry, or read his report.