Prosper Australia grew out of the appetite for social reform at the beginning of the twentieth century. Although there was landowner opposition to the idea of taxing land instead of income from labor, this reform enjoyed widespread support. During the first twenty years or so of the last century our journal Progress reached a circulation of 20,000. Both the conservative and Labor Parties had Land Value Taxation in their policy platforms. We were part of a wider movement for a more equitable society and dynamic economy.
During the dislocation of the war years, support tapered off. However, a dedicated cadre remained enthused. A band of businessmen clubbed together and bought a property so the organization would have a permanent home and duration. Walter Burley Griffin designed our first clubrooms. Another very generous benefactor donated money and began the Henry George Foundation of Australia. These initiatives gave the movement a sound financial base.
Key economic reforms could be made at a local level: to levy council rates on the value of the location and not on the buildings. The plan was, once the merits of land value capture were demonstrated locally, we could then move onto State and Federal tax bases.
In Victoria, to make the change from Net Annual Value to our preferred Site Value rating, a ratepayer poll was required in which 40 per cent of ratepayers demanded council conduct a poll to decide on the rating system preferred. Data was painstakingly collated to show site value rating was just and equitable and that most people would benefit. http://blog.lvrg.org.au/2009/01/archive.html This hard work led to a gradual shift and councils submitted to the demand of ratepayers with changes to site value rating through the 1950s-60s.. This was clearly democracy at work.
In the 1970’s, a change to the law in Victoria introduced a charge of $1 to view the value of an allotment (a land title). This had been free. Here was a deathblow to anyone compiling local government statistics, and was a serious set back to our organisation. Our statistics had shown conclusively that ordinary people and hardworking businesses were better off with Site Value rating. Further challenges to our local government work saw the return to the Net Annual Value (or Capital Improved Value) rating system. This was disguised in the Kennett-era amalgamation of councils (1995). Ratepayers who had used the democratic process to move the rate base to Site Value were now rated on their improvements as well. Kennett also increased the cost of viewing land titles to $20 per title. By 2018, a simple title search was costing hundreds of dollars per site.
Canberra and Leasehold
The Site Value system of revenue raising worked very well in Canberra. Early 20th century planners knew that the announcement of the location of the new national capital (Canberra) would prompt a crippling land grab. A leasehold system was devised to stop this. Canberra was created without land speculation or prohibitively high land prices. Canberra designer Walter Burley Griffin, a member of our organisation in the early years, helped draw up the leasehold system. This stood the test of time until the 1970’s when the Gorton Government all but abolished it. At the time Prosper campaigned for a revamp of the leasehold system, as we saw the real problem was not the leasehold system but that the 20-year intervals between valuations were too lengthy.
Prosper Australia Today
The loss of the leasehold system in Canberra and the local government rating change were part of the continual attack upon the world’s longest-serving land tax system. The local government initiative had not led to permanent improvement. A change of strategy ensued – to look at the macro effect of rising land prices amidst an inaccurate tax system. Regular analysis such as the Speculative Vacancies report, our investigations into reforms in the ACT and our periodic work assessing monopoly rents as a percentage of GDP continue to help shine a light on a more rational, fairer economic system. Importantly, these reports provide a public-interest perspective to the property-oriented news cycle. Today, the popularity of tax havens, Australia’s never-ending land bubble, the compliance costs heaped on business and the steep taxes on labour mean our views are being considered with fresh eyes – because nothing else works.
There’s a lot of work left to do.