All posts by Bryan Kavanagh

I'm a real estate valuer who worked in the Australian Taxation Office (ATO) and Commonwealth Bank of Australia (CBA) before co-founding a private valuation practice, Westlink Consulting. I discovered that we leave too much publicly-generated land rent to be privately capitalised by banks and individuals into land price bubbles. This generates repetitive recessions and depressions. These need to be avoided by capturing more revenue from land values to free up wages and household debt.


As all the superficial stuff has taken over the front page (Bronwyn’s helicopter flight, the romantic adventures of Barnaby, et al) Australians have fallen out of love with party politics. Although great reforms are clearly required in the socio-economic sphere, nothing of any moment  gets done. Atrophy has set in.

But were not Hawke, Keating and Howard great leaders in this respect? No, in the greater scheme of things–to employ an Australian colloquial term in connection with the leadership of each–they were pissants.

What amounts political leadership, then?

What’s the most damaging thing an Australian politician could do now for his or her party ‘reputation’? “Political suicide”? That’s right, mention that we have impossible levels of private debt, as John Hewson did on  ABC-TV’s “QandA” last Monday night. But Hewson’s no longer the leader of the Liberal Party, so he may speak truthfully, you see?

Or, maybe criticise our rampantly speculative real estate bubble and call for the reintroduction of the federal land tax as an effective response? That is, if we want to get Australia back to generating wealth instead of rent-seeking? Yes, that’d be good enough to have you labelled a political idiot, too.

So, how come Australia was able to introduce a federal land tax (1910), the Commonwealth Bank of Australia as a competitor to the private banks (1911), and then found the Australian Capital Territory on the basis of a leasehold land system (1913).

We did these things by having effective political leaders who were prepared to explain a need and then carry the case. We no longer have such people; we have political pissants.


This website has provided a plan for some ten years. When the financial crunch hits Australia, real estate prices will collapse. So the government of the day must keep them collapsed by slashing taxes on wages and profits and taxing away land rents/unearned incomes in order to get Australia working again instead of returning to rampant speculation.

It’s ‘The City’ and Wall Street, Stupid!


Ten years on, let’s revisit what went wrong in world economies in 2008.

A lack of confidence in the UK’s Northernrock Bank caused a run on the bank. It had irresolvable mortgage issues, and was nationalized in February 2008. (It has since become Virgin Money). Other banks were carefully managed because they were ‘too big to fail’. Too big to fail? Really? They may make fabulous profits at the public’s expense in the good times but, when the good times end, the public must bail them out? Is this not this sort of ‘win-win’ the very definition of ‘moral hazard’?

The outlier in the US was Bear Stearns, which collapsed under its ‘collateralized debt obligations’. After having won awards for its great service, and having traded at $172 a share, it was finally taken over by JP Morgan Chase for $10 per share in May 2008. Lehman Brothers then failed in September 2008. Mortgage backed securities were similarly at issue with Lehmans.

These and other financial collapses spawned banking mortgage bailouts and takeovers around the world:-

Of course, the failures were related to a period of rapidly-escalating land prices which came to an end, leaving excessive mortgages exposed to a deflated, more moderate, land market.

Has anything changed since 2008 to stop these events occurring again? Have not China, Canada and Australia built up towards Northernrock/Lehman Brothers-like calamities?

Flagrantly ignoring sound warnings from Adam Smith, David Ricardo, John Stuart Mill, Henry George and, more recently, Joseph Stiglitz regarding the socio-economic ills emanating from privatized land rent, tolerant tax regimes continue to encourage the banking industry to generate these inflated land price bubbles and accept them as ‘security’ for mortgages. By definition, bubbles burst.

It’s ‘The City’ and Wall Street, Stupid!