Earth Rights Institute - Working Groups

SWOT – Australia

Overview:

Strengths:

ability to calculate national land values
framework for implementation provided by existing local government rating base

evidence of efficiency of Site Value (SV) v. Net Annual Value (NAV) rating:
eg. acreage under all crops

Depression Period	1929/30 - 1938/39
SV farming states (QLD, NSW & WA)	+21%
NAV states (VIC, SA, TAS)	-8%

Post War years	1946/47 - 1958/59
SV farming states (QLD, NSW & WA)	+35%
NAV states (VIC, SA, TAS)	–1%
(source – LVRG, 1963, p10)

Monash (last SV municipality in Victoria) is the most influential provider of household disposable income to residents in neighbouring communities (Prosperity for the Next Generation, City of Monash, 2001)
Land Values Research Group analyses show that
- property bubbles widen the wealth gap
- the loss to GDP of perverse revenue systems is enormous
  - the 27% of GDP that is publicly-generated resource rents is allowed to be privately expropriated by rent seekers
  - deadweight costs of taxation and land price bubbles to Australia’s GDP is $1 trillion each year

Weaknesses:

power of property sector over media and media knowledgebase
no easily-accessible data on national or state land values (and time lag when available)
cost of accessing local council rating valuations (ie $20 to access each 'section 32')
land tax needs major reform because of:
- thresholds, exemptions, multiple rates, aggregation provisions, etc.
- uncertainty due to small but noisy lobby groups pointing to aforementioned weakness to call not only for reduction in land tax, but abolition rather than reform
low level of land tax results in high speculation and thus higher land prices. Higher land prices lead to a higher nominal land tax charge, which in turn acts as a vehicle for vested interests to seek to have it abolished
only one SV municipality remains in Melbourne

Opportunities:

Housing affordability at crisis levels with over 40,000 people on Victoria’s public housing waiting list alone.
Developers construction of new mini-suburbs devoid of services.
Governments caught in a policy quicksand – services needed but funding non-existent. If services are provided this makes surrounding property more unaffordable.
Council services provided are greatly stretched by urban sprawl

Threats:

100s of people employed by the property industry, particularly in media. This results in at least 5 press releases per week shooting down any and all forms of property taxes.
The resultant misinformation amongst the general public needs concerted effort to overcome.
Talented people within the planning industry (particularly Local Government) are constantly recruited into the fold of property developers. The stewardship of the public’s best interest within the bureaucracy is left in less skilfull hands.

Alfred Deakin said (first Prime Minister of Australia)

"The whole of the people have the right to the ownership of land and the right to share in the value of land itself, though not to share in the fruits of land which properly belong to the individuals by whose labour they are produced."

Land Rent in Australia

Leo Foley July, 2007

From its earliest days, Australia has understood the concept of all land belonging to the Crown.

When Australia was settled by the British in 1788, no recognition of prior ownership by indigenous people was recognized, and all of the land was claimed to belong to the Crown. Governor Phillip made grants to ex-convicts (emancipists), and later to free settlers and marines. Emancipists were granted 30 acres, plus 20 more if they were married. Free settlers and marines received 100 acres. Grants were dependent on the land being actually settled and used.

However, speculation arrived with the Second Fleet. Gov Phillip returned to England in 1792, and Major Grose, of the New South Wales Corps administered the colony. He made grants to his officers and allowed them to trade land. The NSW Corps became notorious for their monopoly control of the rum trade (the ‘rum corps’), but less well known is their exploitation of settlers to become great landed proprietors. Using monopoly trade practices and debt, they seized mortgaged properties and bought up land from disinterested grantees.

Colonial officials in London saw the dangers, but their attempts to place residential conditions were not enforced in the Colony. By 1828, 3 million acres had been granted, but less than 10% was cleared, and only a quarter of that cultivated. From 1821, grants to emancipists ceased, and larger sheep runs were handed to favoured free settlers, the size of the grants dependent on the number of convicts taken on.

Grants ceased in 1831, when land was sold without limit, by auction. The system was based on Wakefield’s theory that land should be sold at a price sufficient to produce a fund to pay the costs of bringing out emigrants (including many female) to work as labourers, but expensive enough to deter those emigrants from purchasing land. In Wakefield’s mind, everyone would be happy – the rich would hold all the land, and the poor would never lack employment. In theory.

But Australia is a big land. The land sales policy transformed Australia. As land was bought in huge tracts, poorer sheep owners moved to unsettled areas and ran their sheep over unlimited areas. The ‘Squatters’ were born. Naming them as trespassers had no effect, so a licence system was established. For the payment of a small fee, they could use the land they claimed, and in time they received official recognition as owners of the land they grabbed. A few hundred individuals controlled the land.

In Australia, water is scarce. Squatters were required to pay £1 an acre for the land they claimed. But by selectively purchasing land with access to water, huge areas could be controlled. In one case, 258000 acres were secured as a single sheep station by the purchase of seven hundred 40-acre blocks, with water access, in different parts of the property. Thousands of colonists and future settlers were shut out.

Various schemes to break up the large land holdings were attempted. ‘Selectors’ were entitled to select lands occupied by squatters, but the squatters used dummy selectors (even from asylums) to ensure they continued to control the land. By 1884, selectors had occupied over 23 million acres of Crown lands in NSW, but nearly all of it had passed into the hands of the squatters. Much of the money required to fund this scam was sourced from London. This led to a new phenomenon, the absentee landlord.

Squatters enjoyed the fruits of their land monopoly. Their riches were used to buy land in the growing cities, and the proceeds of land sale