Renowned economist and journalist Adam Creighton will describe land tax as “the most unsuccessful great idea in economic history”, remaining a tiny share of government revenues despite having strong intellectual support from economists across the political spectrum, from Friedman to Stiglitz over centuries.
“Australia has a fascinating and promising history of land tax reform, from colonial times to the present, including the shift to land tax in NSW, surprisingly launched by a Coalition government and aborted by Labor”.
“The question I want to address tonight is why this great idea has failed, being largely a mix of economic ignorance – a decline in the quality and candour of politicians and political rhetoric – and the vested interests that would oppose such a shift.”
“Australian land is now worth many trillions of dollars. On today’s valuations, a broad one per cent annual land tax would have a mechanical revenue yield approaching $100 billion—enough, in principle, to abolish stamp duty and substantially reduce personal and company income-tax rates.”
“And that’s not even accounting for the explosion in innovation, development and industry that would stem from such massive reductions in tax on enterprise and work”
The remarks were made at the 135th Henry George Commemorative Address, hosted annually by Prosper Australia. Mr Creighton’s address, “An Australian Land Tax: Past, Present and Prospects,” examined why an idea endorsed by Adam Smith, Milton Friedman, and economists of both left and right has repeatedly failed to overcome political resistance.
Prosper Australia President Matt Godwin said Mr Creighton’s address underscored the need for political leaders across the spectrum to reconsider some of the assumptions underpinning Australia’s tax system.
“For more than a century we have heavily taxed the things we want more of — work, enterprise and productive investment — while allowing much of the economic rent generated by land and other scarce resources to be privately captured. Shifting that balance is an enormous economic and political opportunity. These aren’t new ideas, but their time may finally be coming,” Mr Godwin said.
