Henry George And Land Values Taxation In Britain And Australia
By Cr. MT WILLIAMS, BA Hons, B.Comm, AASA
The Commemoration Address given by the late Cr. Morris Williams at The Victoria Hotel Melbourne on Monday 9 October 1967, to celebrate the 128th anniversary of the birthday of Henry George.
Cr. Williams was the President of the General Council for Rating Reform and leader of the successful campaign for adoption of site value rating in the Shire of Doncaster and Templestowe. He was Shire President in 1966 and was to become the State government member for Doncaster (March 1976 to August 1988).
HENRY GEORGE AND LAND VALUES TAXATION
IN BRITAIN AND AUSTRALIA
I am honoured to have been invited to deliver this address. As a Liberal I am proud to speak to a gathering which is far more true to liberal principles than some masquerading under the name Liberal. Land values taxation has a long history among Liberals: John Stuart Mill; Cobden; Bright; Joseph Chamberlain; Gladstone; John Morley; Asquith; Campbell‑Bannerman; Lloyd George; Churchill, in Britain. Griffiths; Carruthers; Deakin; Watt; Robinson, in Australia.
To the eternal shame of present day Australian Liberals, our party has been swamped by conservatives just as opposed to land values taxation as their big land-owning forefathers. No Liberal Party leader today is a convinced land taxer. Sir Robert Menzies, as you know, was responsible for the Commonwealth vacating the land tax field in 1952 — ostensibly to make way for the States to increase their land taxes.
Sir Henry Bolte has many good qualities and this State owes much to his vision and drive. But he too is another rural conservative obviously hostile to land tax. For how else can one explain that land tax raises only 4% of Victoria’s revenues?
I am firmly convinced as I know you all are that Victoria needs a Development Tax, and what better and fairer tax than a tax on land values, to finance the development of this great State. Melbourne’s underground, roads, schools, hospitals, libraries, cultural centres, all cry out for funds. No genuine Liberal could possibly stomach the present policy of making the lower income earners pay for development through Tatts, proportionate (as opposed to progressive) income taxes and the like. Meanwhile big city land owners, many of whom are wealthy overseas investors and speculators, reap colossal unearned profits from a continuous rise in community created land values.
Of the land tax revenue of $22 million in 1967/68, 1000 companies will pay two-thirds and 200,000 individuals the rest, but there are 11 million rateable properties in Victoria. The proposed stamp duty of 0.1 cents in the dollar on earnings to raise $30 million could achieve the same result financially by (1) a land tax of $10 a year on one million property owners now exempt; (2) double land tax on 200,000 with properties valued between $3,500 and $10,000 would raise about $5 million. (3) Double land tax on the remaining 15,000 to raise $15 million. The top 500 companies would still not exceed $50,000 on average.
But if Liberals have a lot to answer for, what about Labour, who originally climbed to power in New South Wales and in the Commonwealth on the backs of the land tax movement. Labour leaders like Hughes, Holman, Fisher, O’Malley, Brennan, Blackburn were all Single Taxers and later Land Taxers?
Unimproved capital value rating remains a plank in Labour’s platform to this day. But such is the sorry state of Labour’s ideals that Labour councillors are all too frequently hostile opponents of UCV. You will recall the terrible drubbing site value rating supporters in Northcote received from the local Labour machine.
At the time Henry George wrote his great work, “Progress and Poverty” 1879 — 300 men owned two-thirds of Scotland, 1,900 men owned two-thirds of Ireland and 10,000 men owned two-thirds of England. You can thus imagine the impact of his views on English radicals striving to bring about land reform in Scotland and Ireland where the great mass of the people were down-trodden tenant farmers on the verge of starvation.
Despite industrialisation, the lot of the average Englishman wasn’t much better. Henry George was invited on a lecture tour of the British Isles within a year of the publication of Progress and Poverty. As in his book, George’s speeches bristled with indignation at the existence of such abject poverty in Britain and the sheer cold-blooded barbarity of the landed aristocracy sitting on idle estates while people starved.
George’s influence was slow to catch on at first —Liberals were suspicious that he was a land nationaliser like the Socialists. Their doubts were resolved by George’s new book “The Condition of Labour” in 1891 in which he said:
“Socialism assumes that the natural result of competition is to grind down the workers and seeks to abolish competition by restrictions, prohibitions and extensions of government power. Thus mistaking effects for causes and childishly blaming the stone for hitting it; are futile . . . . socialism deludes itself that power over people can be used for the benefit of the people, that there may be devised machinery that through human agencies will secure for the management of individual affairs more wisdom and more virtue than the people themselves possess”.
Not a Socialist
This work made it clear George was no apostle of plunder and confiscation, Liberals flocked to his banner. Following the publication of George’s Condition of Labour he was made an honorary member of the Liberal Party and land values taxation was written into party policy. Gladstone, hostile, now disciple of George in his Newcastle programme.
After George’s death in 1897, the burden of agitating for land tax in Britain mainly fell on the English and Scottish Land Restoration Leagues — later to be merged as the United Committee for the Taxation of Land Values. Hopes rose high with the election of a Liberal Government in 1906. But it took four years to pass the necessary bill, then came war, depression, another war and even enthusiasts have now grown weary of ever seeing the golden dawn when at last there will be land values taxation in Britain.
The Taxation of Land Values (Scotland) Bill introduced in 1906 provided for a land valuation in Scotland at a rate not exceeding two shillings in the pound on site values and taxation of undeveloped land. The Bill was denounced by a Tory named Cox as being based on the delusive arguments put forward by Mr Henry George.
However, despite Conservative opposition, it was strongly supported by Liberal and Labour members and was referred to a Select Committee. But, ala,s it couldn’t get past the House of Lords. In an endeavour to overcome the impasse, Lloyd George, Chancellor of the Exchequer, decided to include land tax as part of his 1909 Budget — for 250 years the House of Lords had never challenged a Budget. But as soon as Lloyd George introduced the measure, sparks flew in and out of Parliament.
As the Prime Minister Asquith said, “it was the land taxes and perhaps still more the proposed valuation of land which set the heather on fire.” To hear the Tories one would have thought that confiscation and plunder had become a reality. To the contrary, the new tax was mild. Lloyd George proposed a tax of 20% on unearned increment derived from the sale of land, this unearned increment to be roughly the difference between the established valuation in 1909 and the price for which the land was sold. There was to be another levy of one halfpenny in the pound of the capital value of undeveloped land, but agricultural land was to be exempt. A national valuation of land was to be undertaken immediately.
The party struggle precipitated by Lloyd George’s budget extended over two years. The contest included the Lord’s rejection of a money bill, two general elections and a Liberal threat to create enough new Peers to secure the passage of the Bill. In Asquith’s words the Budget began a ringing debate between wealth and poverty. The Liberals, led by Lloyd George and Churchill, argued that the Conservatives who opposed the Budget were angry rich men trying to dodge their fair share of national responsibility.
The Conservatives in turn argued that the Liberals had encouraged Georgian doctrines and were bent on transforming Great Britain into a socialist State. One Conservative went as far as saying that Liberal leaders were dragooned into supporting land taxes because a growing number of their followers were members of the Henry George League, and another asserted that with the passage of the Budget, the Patron Saint of England would become Saint Henry George.
The Liberal defence was mainly an attack on landlords who were held up as enemies of the people. Principal speakers for the Liberals were Lloyd George and Churchill. I quote extracts from their speeches at length:
“The growth in the value, more especially of urban sites, is due to no expenditure of capital or thought on the part of the ground owner, but is entirely due to that cause and where it is due to any expenditure by the urban owner himself, full credit ought to be given to him and full credit will be given to him in taxation. I am dealing with cases which are due to the growth of the community and not to anything done by urban proprietors. It is undoubtedly one of the worst evils of our present system of land tenure, that instead of reaping the full benefit of the common endeavour of its citizens, a community has always to pay a heavy penalty to its ground landlords for putting up the value of their land.
The cause of poverty is not thriftlessness, idleness, drunkenness — it is simply keeping land (the sources of all wealth and the field of all employment) out of use. Among the many contrasts which a rich country like ours present between the conditions of rich and poor, there is none more striking than the profligate extravagance with which land by the square mile is thrown away on stags and pheasants and partridges, as compared with the greed with which it is doled out for the habitations of men. women and children. They measure the former by the square mile, the latter by the yard and even by the foot. My counsel is simply that the holders of land shall pay their taxes according to the privilege they enjoy holding land. That is the only thing that will put an end to involuntary unemployment and poverty.
Churchill: (Speech in Kings Theatre, Edinburgh).
“Land monopoly is not the only monopoly that exists, but is by far the greatest of monopolies. Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams glide swiftly to and fro, water is brought from reservoirs a hundred miles oil in the mountains — and all the while the landlord sits still.
“Everyone of these improvements is effected by the labour and cost of other people. Many of the most important are effected at the cost of the municipality and of the ratepayers. To not one of those improvements does the land monopolist, as a monopolist, contribute, and yet by everyone of them his land is sensibly enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing even to the process from which his own enrichment is derived.
“See how this evil process strikes at every form of industrial activity. The municipality wishing for broader streets, better houses, more healthy, decent, scientific planned towns, is made to pay and is made to pay in exact proportion, as it has exerted itself in the past to make improvements. The more it has improved the town, the more it will have to pay for any land it may wish to acquire.
Sixty years ago our system of national taxation was effectively reformed and immense and undisputed advantages accrued therefrom to all classes, the richest as well as the poorest. The system of local taxation today is just as vicious and wasteful, just as great an impediment to enterprise and progress, just as harsh a burden upon the poor, as the thousand taxes and Corn Law sliding scale of the hungry forties.
“We are met in an hour of tremendous opportunity. ‘You who shall liberate the land,’ said Mr. Cobden, ‘will do more for your country than we have done in the liberation of its commerce’.”
I might add Churchill never went back on his land reform views, even as a Conservative. On April 9th, 1946, Dalton, then Labour Chancellor of the Exchequer said “In 1909, 37 years ago David Lloyd George introduced a famous Budget. Liberals in those days sang the Land Song ‘God gave the land to the People.’ I think the Rt. Hon. Member for Woodford (Mr. Churchill) used to sing that song.”
Mr. Churchill: “I shall sing it again.”
The 1909 Bill Passed
When the 1909 Budget at last received the Royal assent in 1910, land taxers were jubilant. But there was to be an inordinate delay in getting valuations completed and indeed they were still not complete at the outbreak of the War in August, 1914. The February 1916 issue of “Land Values” reluctantly admitted that the 1909 Budget was a dead letter as far as it concerned valuation and the collection of land values duties.
With Lloyd George as captive of the Conservative majority in the War-time coalition, the final coup de grace to land values taxation was delivered on July 14th, 1920; “as from the Commencement of this Act Land Values Duties shall cease to be chargeable and the obligations of the Commissioners of Inland Revenue to cause a valuation of all land in the United Kingdom shall cease.”
Labour Party Takes The Torch
The Liberal Party had been destroyed as a political force at the 1918 Coupon election and progressive leadership passed to the Labour Party. Many Labourites including Ramsay McDonald and Philip Snowden remembered the influence of “Progress and Poverty.”
Moreover, trade unionists and Fabian socialists had supported the taxation of land values from the time it became a political issue. As soon as he became Chancellor of the Exchequer in the first Labour Government in 1924, Snowden promised to introduce land tax. But the Government was swept away as you know by the infamous Zinovieff forgery, trumped up by the Tories.
Late in 1929, Labour again won power and George’s land tax principles once more enjoyed a brief moment of political glory. True to his promises, Snowden stated in his April, 1931 Budget Speech “there shall be charged for the financial year ended 31st March 1934 and every subsequent financial year a tax at the rate of 1d. for each pound on the land value of every unit of land in Great Britain.” A special resolution was also introduced to authorize the valuation of land. I quote from Snowden at length.
“As long ago as 1891, Gladstone approved of land values taxation in his Newcastle programme. This programme has been the programme of the Liberal Party for forty years and of the Labour Party since its inception. The underlying principle of land tax has often found support. Measures embodying it in a Conservative Parliament have, on six occasions, passed a second reading. six hundred municipalities, mainly Conservative, have petitioned Parliament to deal with the matter, and conferences of local authorities are regularly held in order to impress upon Parliament its importance.
“Land differs from all other commodities in several respects. The land was given by the Creator not for the use of dukes but for the equal use of His people. A restriction in the freedom to use land is a restriction on human liberty and freedom. To restrict the use of land by arbitrary will of its owner enhances prices, raises rents. hampers industry and prevents municipal development and the promotion of social amenities. Every increase in population, every expansion of industry, every scientific development, every improvement in transport, all expenditure of public money, indeed every child born, adds to the value of land.
The revenue from the taxation of land values is not by any means the only advantage we hope to attain. There is, in my opinion. a more important advantage. It will cheapen land, it will throw open land for use. The scandal of the private appropriation of land values created by the enterprise and industry of the people and by the expenditure of public money has been tolerated for far too long. In asserting the right of the community to a share in what has been created by the community, we are taking a step which will be approved not only by the Liberal and Labour Parties, which have long advocated this reform, but also by a large number of Conservatives whose sense of justice is outraged by glaring examples of the exploitation of the public by private land monopolists. The present system stands in the way of social and economic progress, inflicts crushing burdens on industry and hinders municipal development.”
The comments of two Conservatives are of interest.
“I contemplate with a great deal of apprehension the new machinery for the purpose of land valuation.”
“If we get back into power that tax wilt never see daylight.” And, of course, Baldwin’s prophecy came true.
For the next four months history repeated itself. The Bill’s supporters quoted George, with or without acknowledgement, at great length and opponents anathematised it as Henry Georgean. The Lords passed the Bill eventually, but McDonald and Snowden, like Lloyd George before them, sold out to the Tories to keep office during the 1931 Crisis and land, values taxation was again the sacrificial victim. The valuation staff were suspended as part of an economy drive and the legislation was finally repealed in 1934. Thereafter no serious attempts were ever made to revive a national tax on land values it Britain. Instead, land taxers concentrated their efforts on promoting schemes for the rating of land values.
London County Council Bill
In February, 1939, Herbert Morrison, uncrowned King of London County Council and leading Labour MP, sponsored the London Rating Site Value Bill but was refused leave to introduce it as a private bill on a 229 to 135 vote.
What happened after 1945 to Labour support for site value rating? The answer is not that the Labour Party entirely lost its interest in land reform, but it decided to secure it by other means. This method was embodied in the Town and Country Planning Act 1947. Georgists condemned the Act because it established State control of the use and development of land. The main arguments for the taxation of land values had been that it would appropriate for the community, the land values created by the community. The Town and Country Planning Act purported to accomplish this appropriation of community created land values by means of a development charge, therefore land taxers were deprived of their main argument. But before the measure could be put to much practical effect, it was repealed by the Conservatives on November 16th, 1952.
Land Commission Act
The Labour Government in the United Kingdom has recently enacted the Land Commission Act of 1967, which provides for an initial 40 per cent betterment levy with the intention that, in due course, this will rise to 50 per cent. There is to be no compensation. Thus, if land be worth $2,000 for market gardening purposes and $10,000 for subdivision for which purpose it is already ripe, the development levy will be assessed as under:
Highest and best use value for subdivision …. …. …. $10,000
Less existing use value for market garden ….. …. …. $ 2,000
Development value …… ….. …. …. …. …. …. …. …. …. $ 8,000
Development levy 40 per cent ….. …. …. ….. ….. ….. $ 3,200
This, indeed, is confiscation. It has yet to be discovered whether the legislation will function or whether owners will hold land off the market, in the hope that other days will see a change of government and a repeal or revision of the legislation, and the present government will have to resume land to (yet it into circulation. Latest information is that extensive resumption will occur.
Site Value Rating
The Site Values Rating Association is still working away valiantly. I remember reviewing its Whitstable survey for the February, 1964, issue of “Progress.” This showed that the great majority of homeowners in this Kentish town would have rates cut by 40 per cent, flat owners by 60 per cent and owners of factories, garages and workshops by 50 per cent, and owners of offices by 20 per cent. On the other hand, rates on caravan sites, golf courses, holiday camps and agricultural land would rise by 30 per cent. The future is not altogether without hope. The next quinquennial property valuation comes up in Britain next year. This could raise such an outcry from householders that the Government and municipal councils could be pressed into adopting site value rating.
THE AUSTRALIAN STORY
Two events in 1890 were to have a great influence on Australian history — the maritime strike and the arrival of Henry George. George’s Progress and Poverty had reached Australia soon after its publication in 1879, and played a large part in the ferment of ideas in the 1880s.
The social fervour of Progress and Poverty, its ready-made application to Australian conditions, evoked a strong appeal from Australian radicals. George’s remedy for the ills of society, the resumption for the common benefit of the fruits of land monopoly by imposing tax on the unimproved capital value of land were just what Australia needed.
Only a century had passed since the colonisation of Australia had begun, yet in that time there had been an almost unbelievable alienation of Crown lands. Land policies were always to the forefront of Government programmes and the subject of bitter debate. But as, yet little had been done to implement George’s theories. Only South Australia had acted in 1884 to implement land values taxation. In our Victoria, everybody was too busy making money.
The Land Boom
I hope you have all read Michael Cannon’s book, “The Land Boomers”? The election of Berry’s Government in Victoria in 1875 marked the commencement of an era of political intrigue, Parliamentary degradation and shameless self-seeking. Made rich by gold and populous with migrants who had sought it, Victoria was expanding rapidly, with no apparent limits to rewards from land speculation. In the 1880s, the land boom reached incredible heights of optimism, planning for developments which even now, after three generations, have not been achieved. In my own municipality, we are still dealing with some of these old subdivisions.
The depression which started in 1892 was catastrophic. Leading stock-brokers, auctioneers (including the great WL Baillieu), solicitors, (Theodore Fink, owner of the Herald and author of the device of secret compositions with creditors), bank inspectors, doctors, hotel keepers .… all went through — paying as little as 1/4d. in the pound — manoeuvres, evasions and manipulations by men who were the very pillars of Melbourne society. Their family names and institutions they founded continue to be important in the Australian scene to this day.
Collapse Of The Land Boom
With the collapse of the mad land boom which reduced Victoria to penury, putting the State back several decades, it was our turn to listen to George. Contrary to the classical economists, especially Malthus, George stated that increasing population should provide plenty, instead of causing want. He attributed recurring depression to the tendency of increasing land values to beget land speculation. His solution was to tax land values, exclusive of improvement, and abolish taxes falling upon industry and thrift.
It struck a receptive chord in the young Australian colonies, struggling to develop their immense resources with a pitifully small population. Free trade New South Wales was a particularly fertile field for Georgist followers, who began forming Single Tax Leagues in city and country areas. At the same time Socialists were establishing Land Nationalisation Leagues, and there was a great deal of cross fertilisation between the two. Billy Hughes was typical of a number of Labour leaders who leant heavily on Henry George. Hughes was, for a time, President of the Balmain Single Tax League, and sold a great deal of Georgist literature in his book shop.
Henry George’s Visit Of 1890
A leading Georgist of the period was John Farrel — a brilliant and imaginative journalist with a colourful career behind him, including at one time ownership of a brewery at Albury. His pen made the NSW Single Tax League a major force in politics. Farrel had developed a keen interest in the tenets of Henry George as soon as he read Progress and Poverty. He eventually came to Sydney in 1889 to edit The Standard, a Georgist paper, for which he did most of the writing.
Farrel began a series of articles on George’s theories for the Sydney Daily Telegraph, eventually joined its staff and was Editor for a short time. Farrel was leader of the group which invited Henry George to Australia and accompanied him on his tour of New South Wales. On his arrival — March 6, 1890 — George was feted at a banquet in the Sydney Town Hall by the Lord Mayor, Alderman Burdikan, a wealthy property owner. During the following fortnight, George delivered a series of very well attended lectures in Sydney before going on a tour of the country and other States. Three months, later, on June 1, he delivered his farewell address to Australia, with the famous George Reid in the chair, on the theme: “Protection a fallacy, free trade a necessity.”
George was not long on the Australian scene before his doctrine saw fruit. The adoption of the Queensland Valuation and Rating Bill, 1890, was materially assisted by the opportune visit of Henry George. Although Sir Samuel Griffiths, a keen disciple of Henry George, is generally credited with being responsible for the principles being actually introduced into the Act, its real author was William Stevens, MLA, and also Mayor for South Brisbane. Stevens was not in any way a radical in politics, but he had experienced the evils of rating upon improvements first hand and had been greatly influenced by George’s views.
When urging in the Queensland Legislative Assembly the adoption of the principle of rating land values only and exempting improvements he used the phrase “single tax,” thus showing its origins in George’s teachings. NSW imposed a 1d. in the pound land tax in 1895, and in 1907 municipal and shire site value rating (with the exception of Sydney) was substituted for the State tax.
Land Value Taxation Extends
By the turn of the century, all States except Victoria —Liberal opinion was under the malign spell of David Syme — had introduced site value taxation in some form or other. Once the land boom collapsed, the movement for land values taxation in Victoria soon gained impetus.
A meeting held in the Athenaeum Hall on July 21, 1893, was addressed by the great Alfred Deakin, Samuel Mauger and other leading Liberals of the day. Two young men, AC Nicholls, Secretary of the Single Tax League, and Arthur Robinson, a leading light in the ANA. and a rising lawyer, were elected joint secretaries of a Committee which organised a monster petition for presentation to Parliament — 80 feet long and containing 6,300 signatures — it was presented in the Legislative Assembly by Deakin on August 29.
Deakin said: “A tax on unimproved land values would, I feel sure, be accepted by this community in preference to income tax (being advocated by Syme as a way out of the State’s severe financial troubles because — due to the depression — the revenue from import duties had fallen sharply). In the first place it is deducted from the rent of land and cannot be added to it. Land cannot be concealed, it gives no opportunity for fraud, it is not inquisitorial. It does not take from the earnings of labour or from expenditure upon labour. On the contrary, its tendency is to discourage the holding of unimproved land, to give employment to labour and to lead to the subdivision of idle properties. Taking all these things into consideration, taking into account that it presses lightly on the farmer and the cottager, and falls with greatest severity on the fortunate proprietor of rich city property — is there a tax which could be imposed more in consonance with the demands of justice?”
The Premier, Sir George Turner, brought in a Bill to impose a land tax, but it was killed in the Upper House in February, 1895 — mainly at the urging of David Syme. There were sporadic attempts to revive the issue but without concrete results until 1910, when Watt’s Land Value Taxation Bill passed both Houses.
You will be interested in at least two extracts from the debates.
Watt: “Taking first principles, you cannot possibly justify an exemption on unimproved values.”
Prendergast (Labour leader): “I have no hesitation in saying that no man can consider his economic education complete unless he has read Henry George.”
Nor was interest in land values taxation restricted to the States. It became a major issue at Federal elections from the very start of Federation.
Land Tax A Commonwealth Issue
The Fusion Government of 1909 was decisively defeated by Labour which fought the election over land tax. Stimulated by the 1909 Budget in Britain, Hughes proclaimed land tax the issue of the times. “Upon the land question, defence and immigration are absolutely dependent. Without land, talk of immigration is mere babble, without land we cannot expect a sufficient population and we ought not to advertise resources which, however splendid, are monopolised by an unpatriotic and selfish few.”
The Hughes Land Tax Bill proposed a land tax of 1d. in the pound on estates over 5,000 punds in value, ranging to 4d. on estates over 50,000 pound. There was an immediate outcry from vested interests. The influence of the banks and landed proprietors was tremendous.
They had the support of all the big financial and commercial institutions. A threat to one was a threat to all. Hughes savagely attacked these Behemoths — “the men with the big estates, the men of Big Business, who knocked out the little fellows and swallowed them up — the Rockefellers and the sharks of the kind whose capacious maw gathered in all the fine things of life and left the poor little fish as best they could in a cruel and callous world.”
Labour’s Land Tax Bill became law in November, 1910, and none of the ill effects that had been prophesied ensued.
Land tax did not fall, yet more land changed hands than ever before. The revenue benefited by more than l million pound in the first year and more immigrants were attracted in 1910-11 than the, preceding five years. Tax rates were considerably increased in 1914. But after the War, pressure from wealthy graziers in the Country Party led to the emasculation of Land Tax and it barely averaged a return of 2 million pound a year over the inter-war years. It was finally abandoned by the Menzies Government in 1952, when it was netting a miserable £6 million a year — less than in 1910 when the depreciation of money over the period is taken into consideration.
Georgist Principles In Canberra
Georgist principles were applied in the Australian Capital Territory from its inception. Burley Griffin, Canberra’s architect, was a Georgist, and various Ministers for Home Affairs, including Hugh Mahon and King O’Malley, were also strongly under George’s influence.
Land embracing the Capital Territory is for ever held in trust for the people and available for use only on 99 year leases, at a rental of five per cent of the unimproved capital value. Rentals are reassessed at 20-year intervals. Rating in Canberra is also on unimproved capital values.
The latest annual report of the National Capital Development Commission says that within 20 years Canberra will have a population of 350,000. That is not a bad effort in 60 years. Think of the fortune the land developers missed. The Commission’s point that returns from land rent and premiums are expected to grow at a rate which will ensure that Commonwealth investment in Canberra will be profitable must surely be the understatement of the year.
Land Value Rating In Victoria
Finally, a word about the introduction of municipal rating on site values in Victoria. The matter was first raised in the 1901 Legislative Assembly by Arthur Robinson, by now the Member for Dundas, but frustrated by the Upper House opposition. Resurrected three times over the next twelve years, a bill giving municipalities the option of site value rating was finally passed in the Upper House in November, 1913, by a sixteen to six vote.
A few extracts from the debate are worth quoting:
Mr. Hagelthorn, Minister for Public Works: “This proposal is widely supported by the ANA, the Chamber of Manufactures and the Rating Reform League.”
William Anglis: “My firm will lose more than it will gain from this Bill, because it is compelled to keep vacant land on which to run stock; but I am voting for it in the interests of the people of Victoria.”
WS Manifold: “This is probably the most important bill relating to land that has been introduced into this Parliament. Some years ago the Premier in introducing a similar bill supported it with a good many arguments that were closely allied to Single Tax theories. There was no doubt that this measure was on all fours with Single Tax.”
In researching for this paper, I made an interesting discovery that a leading lawyer in the Upper House had obtained an amendment to the original Bill extending its provisions for land value rating to apply to the Melbourne Metropolitan Board of Works, but the drafting was at fault, and the amendment was later discovered to have the reverse effect and it was dropped.
The Act finally received Royal assent on February 3, 1914, but was not to come into operation until proclaimed by the Governor-in-Council. However, this could not be done until land values were assessed over the whole State. A Bill was then passed in December providing for gazettal for individual municipalities. But, alas, due to the War, no valuations were ever completed.
In 1919, Mr EL Kiernan, a leading supporter of UCV rating in the Upper House, persuaded his colleagues to pass an Act empowering municipalities to adopt their own valuations.
Following this, Coburg, Caulfield, Dandenong, Essendon, Portland and Newtown-Chilwell went over to the UCV basis in 1920 — Brunswick and Camberwell in 1922, and the list grew and grew until now 58 municipalities out of 209 in Victoria (this included 30 of the 46 Melbourne metropolitan councils, whilst 68 per cent of all rateable properties in the metropolitan area are rated on UCV) have made the change. Of the total, 44 have taken
the step since the war. The struggle to implement Georgist principles is still going on.
Aggressive Liberal radicalism is not dead. Take heart, for the best years, could be ahead.
Sooner or later some politician is going to realise that taxation of soaring land values could be an election winner again, as it was to the pre-World War I Labour Government.