12km of cost-shifting – onto working stiffs like you


The Property Council of Australia was out again yesterday, sternly defending the land from pesky taxes and ‘value capture’. Well, their land.

The ACT branch said its members “applaud the ACT government’s vision” for the 12-kilometre tram linking the city and Gungahlin, according to the Canberra Times.

They want the new tramline, which will shrink Canberra and improve access and amenity for all, but require someone else to pay for it.

The PCA position comes in the form of Three Noes:
• No special light rail levy
• No new rates and charges
• No new taxes on us, never ever

They seem to believe the entire cost of Canberra’s new light rail should come from labour taxes. Never mind this proposition fails the Que Bono test – who benefits?

The tram will provide a very substantial boost to commercial land prices along its route – above the cost of construction and likely by a lot more than the residential land it connects to. PCA ACT members want to put that entire land price uplift in their pockets.

The PCA have form for putting member interests ahead of the common good. It is one thing to be paid lobbyists and quite another to try to undermine good economics and sound public policy in the pursuit of private gain.

The ACT administration has an easy counter-offer available: if the new tram fails to lift commercial land values, no charge. Let the market price of land decide.

Land is different to other inputs like labour and capital. It cannot be discouraged by taxation. It cannot be shifted to a tropical tax haven. It cannot slough its tax burden onto someone else.

Australia has a large and rising infrastructure deficit. Population growth is driving demand for more hospitals, schools, roads, pipes and wires. Land tax is an ideal way to fund these essential services – their installation by government is what made the land valuable in the first place.

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