Prosper Australia says the Federal Government’s focus on the rapid expansion of data centres is welcome, but argues it is overlooking one of the biggest economic questions: who benefits from the enormous increases in land values created by the AI boom?
As governments approve data centres and invest in the infrastructure they require, the value of the land underneath increases dramatically. Prosper Australia says these publicly created windfalls should be shared with the community, not handed to private landowners for free.
“The AI boom may be digital, but its biggest windfalls are being captured on the ground,” said Rayna Fahey, Executive Director of Prosper Australia.
“Our latest billionaires are making extraordinary gains through data centre development. There’s nothing wrong with people becoming wealthy through innovation, investment and hard work. But when a significant share of that wealth comes from publicly created land values, planning decisions, and infrastructure paid for by the community, it’s only fair that the community receives a share in return.”
“As governments approve new data centres, the value of the land soars instantly. The public deserves a fair share of that publicly created value.”
Prosper Australia is calling on governments to introduce a price on data centre development rights, building on its previous research showing Australia gives away around $11 billion in development rights each year. The organisation says the AI revolution presents an opportunity to modernise Australia’s tax base by capturing the economic rents generated by land and public infrastructure rather than continuing to tax productive work.
“The cloud isn’t floating in the sky, it’s sitting on land and consuming natural resources,” Ms Fahey said.
“If we fail to capture the land value uplift created by the AI boom, we’ll repeat the mistakes of previous industrial revolutions by privatising gains that have been created by the whole community.”
