OUR HISTORY

Beginnings

Prosper Australia grew out of a campaign for social reform at the beginning of the 20th century. The idea of taxing land instead of income from labour enjoyed widespread support during the progressive era (1890-1920) with pockets of opposition from landowners. 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 depression and war years, support tapered off. However, a dedicated cadre remained enthused. A band of businessmen, including Walter Burley Griffin clubbed together in 1920 and bought a property so the organisation would have a permanent home in Melbourne. A generous benefactor, Edgar Culley, helped to found the Henry George Foundation of Australia on the 25th of May 1928.

Success

The federal land tax was introduced in 1910 to break up big estates.

In Victoria, to make the change from Net Annual Value to our preferred Site Value Rating in 1920, a ratepayer poll was conducted, which showed site value rating was just and equitable and that most people would benefit from the change. Councils gradually submitted to the demand of ratepayers through the 1920s-80s. Democracy at work.

Disappointment

In the 1970s, Victoria introduced a charge of $1 to view a municipal valuation. It had previously been free (and more transparent). This was an issue for ratepayers and a setback for our organisations that compiled government statistics, such as Prosper. Our figures showed conclusively that ordinary people and businesses were better off with Site Value Rating. Further challenges were introduced with the Capital Improved Value rating system, hidden in the Kennett-era amalgamation of councils (1995). Ratepayers who had used the democratic process to move the rate base to Site Value or land value only were now rated on the combined value of land and improvements.

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, 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, suggesting the real problem was not the leasehold system itself but that the 20-year intervals between valuations were too lengthy, and valuations unrealistically low as a result.

Prosper Australia Today

The loss of the federal land tax, the leasehold system in Canberra and the site value rating in Victoria were part of the continual attack upon the world’s longest-serving land tax system. Even in the site value rating states of Queensland and New South Wales, the introduction of ‘minimum rates’ has distorted the rating system such that owners of lesser valued land are effectively subsidising owners of more valuable sites. 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. Today, the popularity of tax havens, Australia’s repetitive land bubbles, 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.

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