Mr. Clyde Cameron AO was the member for Hindmarsh in South Australia. These speech extracts were published in Progress Magazine, December 1968.
One of the biggest difficulties for people wanting to build a house today is to find a suitable block of land at a decent and respectable price. The cost of land has reached an absolutely ridiculous point. In my State of South Australia it is not unusual for people to pay $3,000 for a block of land before they start to build their home. Ordinary young married people who are working for a living just cannot afford to pay this sum for a vacant block of land on which to build their home. Lest the Committee may think that $3,000 is an exaggeration of what, in reality, has to be paid, I remind it that if one wishes to buy a block of land in the area of Lockleys or Brooklyn Park the price is not $3,000 per block, but $6,000. Recently a block of land at Henley South was sold for $10,000. Something has to be done about this, because it is fast becoming a greater problem than the exorbitant costs of building.
I believe that there is only one answer. It is provided in the policy of the Australian Labor Party in South Australia. It is the reimposition of an unimproved land value tax upon unimproved land values, with a reduction in the indirect forms of taxation, such as sales tax and the like, which bear so heavily now upon the young family man. The amount of additional tax which a family man would then have to pay upon an ordinary suburban block would be about one-tenth of the amount that he would save by no longer having to pay the exorbitant indirect taxes that now apply in the sales tax and excise fields.
In South Australia we have a system where various municipalities have the right to decide whether they will have land value rating or adopt the improved rental value system of raising local government revenue. Although this is only a very small area in the field of taxation compared with land tax levied Federally or levied by the State on a level sufficient to take out profit from land speculators it has, nevertheless, had a very marked effect upon the price of land in the municipalities where the unimproved land value system was adopted. I refer, for instance, to the municipality of West Torrens which for many years followed the ordinary improved rental value system of raising municipal rates. In those days huge areas of broad acres were left vacant in the names of land speculators. The Adelaide Development Co. Pty. Ltd. and other companies purchased broad acres and held them out of use for years. They could do this because they did not have to pay very much State land tax upon these areas and because there was no municipal rating imposed on them, other than for the pure rental value, which was very little.
I purchased a block of land in one street, which had penetrated into the centre of a large open area of country owned by land speculators, only to find that immediately I built a home upon my block of land the municipal rates were increased to approximately £12 a year, whilst they were only 12/- per year on the vacant blocks of land on both sides of mine, and behind and in front, which were still undeveloped and which were held by land speculators.
So the council was levying tax upon people who built upon their blocks of land and it was letting off scot free, virtually, people held their land out of use. Eventually we changed the system and almost overnight these land speculators who had hundreds of blocks of land held out of use, waiting for the day when the pressure of the law of supply and demand would force prices up, were forced to put the blocks on to the market at a cheaper rate, because they found that they could not afford to pay £12 per year per block of land kept out of use.
It is a matter of historical record that immediately after the council introduced its unimproved system of land rating more blocks came on to the market and the price of land in municipality fell. This is only a very minor example of happens but it is an indication of what would happen if an unimproved land value tax was imposed upon land speculators who are now making such exorbitant amount money out of the need for people to have blocks of land upon which to build their houses. This is a very great need.
This Government is responsible for having abolished the scheme of unimproved land value taxation which had previously been applied by the Commonwealth. It did so under the pretext of helping the small farmers. In point of fact, the small farmers do not pay very much in the way of improved land value tax because the unimproved value of their land is not great. A farmer in the Mallee who own thousand acres would not pay one-hundredth as much as would properly be imposed on one building block in Collins Street, in Melbourne. The honourable member for Mallee need not jump up but should listen to what I say.
The people who benefitted most by the Government’s decision to abandon its land tax were the wealthy speculators, the banks, the insurance companies, the emporiums and the hotel owners in the big cities. I am sorry I have not more time to talk about unimproved land values. This is a subject upon which I and the Minister for Defence (Mr. Fairhall) think exactly alike. The Minister does not talk it much now because he is so busy dealing with other matters such as the F111 aircraft. However, we both agree that unimproved land value taxation is one way in which to bring about a reduction in the price of building blocks and thereby to chop out the large profits which land speculators now able to make at the expense of the family man wants to buy a block of land upon which to build a house.