GOOD READ MISSES A KEY POINT

wayne swanWAYNE SWAN CONTENDS:  Repairing inequity is NOT class warfare!

I enjoyed reading “The Good Fight“, Wayne Swan’s account of the Rudd-Gillard-Rudd federal governments’ “Six years, two prime ministers and staring down the Great Recession”. As you’d expect, it contains enlightening detail of the political comings-and-goings during Labor’s hectic and divided term from 24 November 2007 to 7 September 2013.

Whilst you’d expect the former Treasurer’s story to be self-serving, Wayne Swan does own up to several of his own errors, in addition to Kevin Rudd’s myriad which emerge, and the truthfulness of his account becomes patent. But there is one grave omission that amounts to a form of dishonesty. More on this later.

I got to the end of the book admiring Swan’s conviction in carrying on ‘the good fight’ and I believe he makes his most timely and important point in Appendix 2 “Land of Hope and Dreams”, a speech delivered in the John Button Lecture at the Wheeler Centre in Melbourne on 2 August 2012:-

Obviously, you have to make a pie before you can slice it—and I’m deeply proud that we’ve grown our national pie by nearly 10 per cent since the GFC—but eventually you do have to slice it. The choices you make in slicing the pie reflect fundamental moral judgments. They also reflect important economic judgments, because economically divided societies tend to be societies without a common purpose, without cohesion, without cooperation, and eventually without economic growth.

America’s leading economists now bear this out. From at least the early 1980s onwards, working class Americans have been losing their share of American prosperity while the wealthy have been gaining dramatically more. So much so that leading economists and sociologists like Paul Krugman, Joseph Stiglitz and Robert Putnam now observe that wealth inequality, not race, is the most important divisive factor in US society.

Swan is aware of the need for resource-based revenues in order to achieve a measure of public equity, and in respect of the Resource Super Profit Tax:-

Every Australian should be concerned about how the anti-mining-tax campaigners manipulated media coverage to support special interest over the public good. For example, the views of minor academic-turned-conservative-op-ed-columnist Judith Sloan were elevated above those Nobel Prize winners who supported the tax.

Like many Australians, Euromoney’s 2011 Finance Minister of the Year saw billionaires parading on a flatbed truck to put their case against Australians getting their fair share from exploitation of our minerals as a gross obscenity.

Because Australia was behind the curve in its land price bubble, Wayne Swan had time to forestall the country from going into recession during the GFC by undertaking a series of well-reported pump-priming episodes.

One is left wondering whether these stimuli were at least in part inspired by Swan’s 6:30 am directive in a telephone call from US Treasury secretary Hank Paulson on 10 January 2008: “‘Look … if we can avoid a meltdown in house prices, then we might be able to see a way through this’, he said.”

You also failed to comment on whether you see the worldwide rent-seeking epidemic in house prices—or, more particularly Australia’s current bubble in land prices–as every bit as obscene as Gina Rinehart’s rent-seeking in our mineral resources, Mr Swan. Nor did you mention that land tax was part of the Labor party policy until it was written (not voted) out of the party’s platform in the 1960s by party secretary Cyril Wyndham. Would not an all-in land tax have acted to obviate the build-up of this poised-to-burst bubble? Surely, these are important considerations not brought to light in your economic analysis? This omission, this void, is palpable.

Did not the late Labor stalwart Clyde Cameron contend this was where the party had lost its way, Mr Swan?  You say you don’t want the GFC to be extended because of its regressive nature, so the void is remaining to be filled.

________________________

 

FLASH!   Herald-Sun discovers negative gearing of real estate.

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PROSPER MEDIA RELEASE

PROSPER AUSTRALIA MEDIA RELEASE

Debate over GST split ignores bigger issue

“The States should not be threatening to re-impose regressive taxes of the past, but be working with the Federal government to overcome the mis-information prevalent in a property obsessed economy,” stated Prosper Australia Project Director Karl Fitzgerald.

“Treasurer Hockey is concerned at the tax avoidance of Big Tech costing the budget some $5bn p.a. Yet unrealised capital gains in the land market were 84 times greater – a staggering $418.3bn last financial year.

“Land taxes are grossly under-utilised and must be part of the tax reform discussion at this Friday’s COAG meeting. The National Commission of Audit stated: “The States’ own-source revenue could be increased to reduce the vertical fiscal imbalance and provide them with fiscal autonomy. This includes options such as broadening the base of existing State taxes.” This is a coded call to remove the many exemptions from the Land Tax base.

“States should be working to reform their most powerful tax base – Land Tax. In the past few weeks two Treasury papers have extolled Land Taxes as the most efficient tax base available. Not one state Premier commented on this finding, tacitly agreeing to even greater federal subservience by allowing the second best GST to take centre stage.

“The political challenges to such reform are considerable but governments at all levels must engage in serious long term education campaigns on the benefits of Land Tax reform. This is urgently needed to offset the self-interest stoked by property shows such as The Block and Location, Location, Location.

“Instead, the state with the longest tradition of taxing land values, South Australia, is threatening to reinstate the unpopular Financial Institutions Duty as a payback for fiscal imbalance. Premier Jay Weatherill has strong views about the $275m Federal cut from the SA health budget. However, in the 2013-14 financial year, SA land values increased by $18.5bn. Whilst the size of the cutbacks are concerning, such an amount equates to just 1.5% of the land price appreciation.

“NSW is facing an onslaught from property investors chasing a slice of the $203bn in rising land prices. They face a cut of $1bn over four years but Premier Baird would rather privatise than consider a rollback of the rent-seeking frenzy surrounding his state.

“Victorian Premier Andrews wants to privatise the Port of Melbourne for a once off $6 billion budget bonus. That’s 5.6% of Victoria’s annual land price increase. The silence is deafening on the harm resultant mortgage debts are causing the Victorian economy. Instead Andrews is reversing the other way, offering handouts to the property lobby by capping municipal rates.

“In an age of capital mobility, taxing fixed assets such as land will become increasingly important. State governments must start to reclaim their sovereignty by engaging in the reforms suggested to the Victorian government in Prosper Australia’s pre-budget submission” closed Fitzgerald.

Media contact

Karl Fitzgerald

karl.fitzgerald@prosper.org.au

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800 YEARS OF ENSLAVEMENT WORSE THAN FEUDALISM


Thorold Rogers4

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IN FAVOUR OF LAND TAX

A letter in THE AGE today –> http://www.prosper.org.au/2015/04/13/in-favour-of-land-tax/

 

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NATIVE PEOPLES ALWAYS UNDERSTOOD THIS

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JOIN HERE!

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HELP AUSTRALIA PROSPER

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JOIN HERE!

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WILL AN ALL-IN LAND TAX KICK OLDIES OUT OF THEIR HOMES?

The expected backlash to Jessica Irvine’s pro-land tax article arrived in today’s letters to THE AGE editor.  The super-wealthy will now join in to cry crocodile tears for asset-rich income-poor people.

No, Jessica Irvine was not saying we should kick oldies out of their homes but that, in some cases, a land tax may act as an incentive for some older people to re-assess their situation. If you’re happy in your house in your present position, you should most certainly remain in it, because it’s yours.  But community-generated land rent is not yours, you see?

So we should not let the exceptions make the rule.  We still need to introduce an all-in land tax because we’ve been taxing productivity to a standstill and rewarding land speculation, so we desperately need a tax that remedies this situation and abolishes much of the deadweight costs on labour and capital.  I’m sure you understand that’s for the greater good, letter-writers?

We’ll continue to look after you in your homes, grandma and grandpa. You deserve it!

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GREAT STUFF, JOE STIGLITZ!

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SOOS/DAVID’S NEW ENTITY PROVIDES STATS

http://www.macrobusiness.com.au/2015/04/oz-housing-affordability-measured/

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INCOME TAX DOESN’T–AND CAN NEVER–WORK ….

income tax

 

…. as witnessed by the Australian Senate inquiry into corporate tax avoidance –> http://www.theage.com.au/business/the-economy/apple-google-microsoft-cop-tax-audit-20150408-1mgsma.html

And you think preaching at them, or seeking international tax agreements, can really fix this, Senators?  C’mon!  Get real!

Ah, but you do realise, don’t you guys, the big boys–no one–can avoid an all-in land tax, plus a full-on electro-magnetic spectrum rental?

Natural resource-based revenues can’t flee the country.

 

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