The Total Resource Rents of Australia report finds:
- The influence of monopoly is 10 times greater than mainstream economists acknowledge.
- Economic rents are a significant component of the Australian economy, comprising 23.6% of GDP.
- Almost half of all government revenues could be delivered by channelling the property boom to more productive purposes.
- Income, company and sales taxes, along with 122 present taxes could be scrapped.
- Those with monopoly rights should face higher tax burdens than risk-taking entrepreneurs.
- 90% of taxes are distortionary, adding 23% to prices of goods and services.
- Efficiency dividends of $66 billion could be delivered to the economy by removing deadweight costs.
- Low income earners could benefit from lower housing prices and an increased demand for labour.
- Small business would rapidly expand due to less paperwork, lower commercial rents, reduced monopoly power and greater discretionary incomes.
- The mining industry should pay 10.5% of government revenue for the privileges granted in accessing the common wealth.
- Fishing licences, largely given out for free, should be charged a yearly licence fee based on the value of fish multiplied by volume; this principle would apply to all natural monopolies.
- The water trading market should pay a yearly licence fee, as should other industries where resource privatisation grants ‘super profits’.
- Monopolies should be targeted in recognition of the negative economic outcomes they deliver (i.e. DNA and seed patents,satellite orbits).
- Carbon taxes should triple in order to replace excise duties on fuel and diesel, placing the burden at source.
- Under a land tax system, the rural sector would enjoy a lower tax burden, encouraging decentralisation.
- The licensing agreement with public airwaves owners could allow free advertising time for political parties in elections, thereby reducing the potential corrupting influence of campaign contributions.
- The ability to finance infrastructure at lowest cost: capital works projects could be financed by property owners according to the benefits they enjoy, effectively repaying State Government bonds over 20 years.
- Under a system of economic rents, tax havens and tax loopholes would be dramatically curtailed as natural resources have a fixed address and cannot flee overseas.
- There is a need for public awareness of new forms of monopoly where super profits can be had with little risk or effort (e.g. cyber squatting).
PART I – Executive summary
Total Resource Rents
In an era where natural resources have been increasingly privatised and access is increasingly denied, monopoly should be investigated for its capacity as a taxation base. Efficiency outcomes from our study are important to all taxpayers.
The Total Resource Rents of Australia report finds monopoly rents are capable of replacing taxation at all levels of government. In 2011-12, local, state and federal governments required $390.067 billion in operating revenue.2 The most efficient form of government revenue-raising, the taxation of economic rents, can raise 87% ($340.719 billion) of revenue needed. By including ‘sin taxes’ and non taxation revenue, a fairer, more equitable tax base is possible. As demonstrated in Table 1 (below), monopoly rents have the capacity to finance government:
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