In its campaign to rid Australia of bad taxes, Prosper Australia surveyed Victorian municipal council candidates and asked their opinion on the rates issue. We explained the difference between Capital Improved Value (CIV) and Site Value (SV) and the economic arguments around them.
The Victorian government’s review of the Local Government Act 1989 wants to move all councils to CIV as the rate base. This represents a step backward and must be resisted.
Prosper urges you to vote FIRST in the Victorian Local Government elections on 22 October for the candidates listed here, based on their support for Site Value.
CIV imposes rates on buildings as well as the land. Those who build, extend, renovate or maintain their property pay more than those who leave land vacant or let buildings fall into disrepair. CIV masks the economic incentives for inner city densification and sends price signals that promote urban sprawl. It means less construction investment – fewer buildings of lesser quality. SV is superior – it prompts all holders to put their land to its most productive use.
There are very good Melbourne studies from the 1960’s, when some municipalities moved from CIV to SV, that show real and enduring benefits from the change. Dr Gavin Putland has an excellent paper here that lays out the benefits: http://blog.lvrg.org.au/2008/09/why-site-value-rating-is-better-and-how.html
Prosper Australia is a lobby group and think tank focussed on making economic rent the first source of public revenue. Our submission to the Local Government Review can be found at: https://www.prosper.org.au/2Tw
We thank the candidates who responded for their time and thoughtfulness.
Prosper’ received no response from Australian Labor Party and Liberal Party candidates. ALP candidates can be expected to support the Andrews government policy, We hope they took the time to read and understand our material. The Liberals position is unknown and their sponsored candidates invariably run as ‘independents’. However, if you support ‘jobs and growth’ please urge your Liberal candidate to consider the impact of CIV rating on your street.
The Greens responded with a corporate statement, saying:
“The Victorian Greens are carefully scrutinising every element of the review of the Local Government Act 1989 via our state spokesperson for Local Government, Samantha Dunn MLC. Once it is clear what definitive changes the government intend to make via legislation the Greens will consult widely including with councillors, local government peak bodies and others to thoroughly understand the implications of any introduced Bill. The Greens are strong supporters of the autonomy of local government. Given the review of the Local Government Act 1989 is a state matter, it is one that is being dealt with via the Victorian Greens state MPs.”
It is disappointing that the Greens do not have a coherent policy promoting land and natural resource rent taxation across all levels of government. Reforming taxes off workers and enterprise and onto land would go a long way towards The Greens’ vision for social and environmental justice.