15 November 2012

The mining investment boom that carried Australia though the Global Financial Crisis is declining rapidly and new engines of growth are urgently needed to steer around the ‘Controlled Depression’ that is driving the world into a spiral of misery – country by country.

“Tax reform is something we can do by ourselves, for ourselves,” David Collyer Campaign Manager Prosper Australia said today. “Our elected leaders sorely underrate Australia’s appetite for tax reform.

“Voters know the tax system bleeds wages and rewards rent-seekers. Changing tax to efficient and non-distorting bases would deliver giant returns and bridge the looming chasm immediately before us. Citizens entrust this task to our parliaments; their inactivity on this issue condemns them.

“Now is the perfect time for change.” Prosper’s Karl Fitzgerald has calculated the taxable capacity of Australia’s economic rents and the practical benefits of removing wage taxation. He presents his findings Tuesday.

KPMG estimated for Treasury in 2010 there is some $60 billion in deadweight costs borne by taxpayers over and above the approximate $360 billion paid in tax. There are further savings in shrinking the administrative costs – the army of tax collectors and accountants required to comply with complex tax laws.

The reforms in the Henry Review would end much of this waste, boosting national income, jobs and economic activity.

“Lifting GDP by nearly four per cent recurring is available to government. They should seize it with both hands.

Federal independent Rob Oakshott told the AFR Thursday: “We need to look at broadening the (GST) base and in that get rid of some of the inefficient state taxes in a country where four taxes do 90 per cent of the work.”

His words are a clear warning to state governments: move to the best tax bases or lose them to the Commonwealth.

“The federal mining tax, for example, supersedes and envelops state mining royalties. State governments are furious but refused to reform this inefficient, distorting tax base and have no one to blame but themselves,” Collyer said.

“Equally, their failure to rebase from highly distorting conveyancing Stamp Duty to a universal Land Value Tax may see this base also lost to the Commonwealth.”

“TOTAL RESOURCE RENTS OF AUSTRALIA”

A Lecture by Karl Fitzgerald on removing wage-taxation and putting government revenues onto the natural endowment. Fitzgerald has freshly calculated the tax bases available to government and examines the consequences of change. This report demonstrates the economic power of monopoly is capable of financing all tiers of government.

6.30 pm Tuesday 20 November 2012
1/27 Hardware Lane Melbourne

RSVP 03 9670 2754 or office@prosper.org.au

Media comment: David Collyer 0413 248 193

About Prosper: Prosper Australia is a tax reform lobby group and think tank that is now 120 years old. It seeks to move the base of government revenues from taxing individuals and enterprise and capture the economic rents of the natural endowment, notably through Land Value Tax and Mining Tax.