Brumby calls for change

Former federal and state politician John Brumby had a piece in THE AGE last Tuesday “Australia needs to start making its own luck” warning of ‘dog days’ and Australia heading down ‘the Greek road’. Although Brumby clearly followed the neo-liberal economic textbook, both sides of politics should be prepared to openly address our precarious economic situation – because Australia once did lead the world in political initiative. We should revisit this history in order to help respond to current socio-economic challenges: most particularly, the Progressive Era, 1890 – 1920. [*]

Australia had experienced the 1890s depression generated by the bursting of the 1880s bubble in land prices, and seeking to preclude any repetition, all sides of politics began to see merit in the ideas of the American Henry George who had toured in 1890, addressing large crowds in the eastern states and South Australia. George’s arguments in favour of the ‘single tax’ on land were very fresh in peoples’ minds at federation – and the Commonwealth government introduced a federal land tax in 1910.

Nor were property speculators welcome in Canberra, where a greenfield site was chosen for the new capital in 1908.  Its land was to be leasehold only, and the ongoing site rents would help sustain the city.

State and local governments meanwhile continued to construct dams, bridges, highways and streets out of part of the uplift in land values these capital works delivered to all title holders.

But the days when Australia had the best standard of living in the world have long gone. Nothing must now interfere with our speculative real estate proclivities. As our freeways become tollways, we cast about, wondering how we can possibly expand the rail network.

There are extremely good reasons Australia should review its past. Not all old ideas are bad ideas.

[*]  The period was notable for its drive against corruption, and supporters of the ideas of Henry George loomed large. Lloyd George’s “Peoples’ Budget” of 1909, which incorporated a land tax, exemplified the times in Britain.  Strong mayors in the USA, the likes of Al Smith, Tom L Johnson, Brand Whitlock, Daniel Hoan, Edward Robeson Taylor, “Sunny Jim” Rolph and Hazen Pingree instituted land tax measures to encourage capital works that were to resurrect their cities.

1 Comment

  1. Theo11-06-2016

    Actually heading down the ‘Greek road’ is not as bad as it may sound. House and land prices have dropped dramatically there. Having lived in the countrey for two decades, many families who were once renters are now able to buy their own house while just a decade ago it was only a dream, as prices kept going up and up, ‘Australia style’. Add to this a recently introduced land tax has forced many land barons to flood the market with even more affordable houses and land to build on. Though unemployment there is very high today, this is due to an economy that crashed because it was running on massive budget deficits and loans to fuel the boom while the country’s productivity fell-think Australia. Had the corrupt government there introduced the necessary structural and tax reforms earlier, the country would not be in the mess it is today. Anyone see a correlation with our corrupt government here and the state of the Australian economy today? So you see ‘Prosper Australia’ , your constant calls for tax and economic reforms has merit as the ideas and theories you present are having the effect you claim they will, with Greece as the prime example or working model.

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