Hamilton Lamb

…. but Australia has its own national currency and doesn’t need to borrow our own money via bonds and treasuries, Alan. This has long been known to be a scam, so why do we continue to do it?

And inflation is not a matter of the federal government spending too much money, Alan. It’s a function of all the money we’ve pumped into land prices–more than $10 trillion!–but we can’t admit that, because it’s our national obsession! We can forget silly little CPI and, of course, taxes on our incomes and purchases don’t help inflation either.

For a healthy economy sans inflation, we sorely need bonds, land prices and taxes to disappear altogether and to capture the national dividend publicly.

Taxing natural resource rents instead of incomes and purchases would achieve this if we were to find the intestinal fortitude.

Henry George’s economic truths fail to find a home in either socialism or capitalism because his philosophy shatters the traditional left-right binary by treating land rent as a shared public resource while leaving labour and capital completely privatised.

While conventional capitalism and socialism treat land and capital as the same thing, George argued they’re fundamentally different. Land is finite and created by nature, whereas capital is man-made and created by human effort.

📊 Comparing the Three Paradigms

🔎 Why Capitalists Reject George

Right-leaning capitalist thinkers reject George because he challenges the absolute right to private land ownership.

• Elimination of Land Speculation: Capitalism permits individuals to buy land, leave it empty, and profit entirely from community growth. George’s proposed Land Rent, capturing 100% of all natural resource rents, makes real estate speculation impossible.
• Redefining Property Rights: Capitalists view property rights as indivisible. George argued that you only truly own what you produce with your hands and mind. Because no human created the earth, no human has the moral right to monopolize its annual value without compensating society.

💡 Why Socialists Reject George

Left-leaning socialist thinkers reject George because he is an ardent defender of free markets and private capital.

• Protection of Private Capital: Karl Marx famously dismissed Georgism as “capitalism’s last ditch,” because George strongly defended business owners’ rights to keep 100% of their profits. George believed that the returns to capital and private wages are completely justified, and landowners should not be permitted to siphon them away, as they do now.
• Opposition to Taxes: Socialists seek to collectivize the means of production and regulate markets. George wanted to abolish all income taxes, sales taxes, and tariffs, advocating for a radically free market once the land monopoly was dismantled.

📌 The Georgist Paradox

Henry George’s ideas are ultimately orphaned because they require both sides to compromise on core dogmas. He asks capitalists to give up the monopolistic rent of land, and asks socialists to give up the hatred of private profit.

The vast majority of people therefore suffer financially as a consequence of this solution being ignored.

(Anticipating the 1893-1897 depression)

“In the colonies I have been through, the curse of land monopoly and land speculation is over everything. I don’t know of any new country where more striking instances of the absurdity and injustice of our present treatment of land is to be seen.”

• Henry George, Adelaide Observer, 26 April 1890.

h/t John Pullen, The Legacy of Henry George: Henry George in Australia, American Journal of Economics and Sociology Vol 64 No. 2, April 2005.

Phil Day

ORIGINS

Georgist philosophy is undoubtedly evident and enduring in Australia. Not in the consistent and purposeful development of economic thought, but evident nevertheless both in fiscal practices and in land planning and administration. A difficulty, however, is that manifestations of Georgist influence have been essentially disjunctive, both in substance and temporal sequence.

European settlement in Australia in 1788 introduced conceptual issues of sovereignty and ownership, and practical questions of land administration. Tracing their subsequent evolution requires some spelling out of the early historical background to the extent that space permits. In 1770 Lieutenant (later Captain) James Cook claimed sovereignty over eastern Australia on behalf of King George III. The Admiralty’s 1768 instructions to Cook1 convey something of the generally high-principled attitude of the Imperial government towards the indigenous population, and in the course of administering a raw frontier settlement and its sometimes fractious non-indigenous population:

“You are likewise to observe the genius, temper, disposition
and number of the natives, if there be any, and endeavour by
all proper means to cultivate a friendship and alliance with them,
making them presents of such trifles as they may value, inviting them
to traffick, and shewing them every kind of civility and regard; taking
care however not to suffer yourself to be surprised by them, but to be
always on your guard against any accident. You are also with the
consent of the natives to take possession of convenient situations in the
country in the name of the King of Great Britain, or, if you find the
country uninhabited take possession for His Majesty by setting up
proper marks and inscriptions as first discoverers and possessors.“·

Sir Stephen Robert’s definitive History of Australian Land Settlement records the incremental expansion of Australian settlement following Captain Arthur Phillip’s arrival in Sydney Cove in 1788 with 700 convicts and 200 soldiers to establish a colony of felons at a cost assumed to be less than that of keeping them in hulks on the Thames. They were modest beginnings, preceding the flowering of empire in the Victorian era. “There was no notion of a colony as a colony. Pitt and Sydney, the responsible statesmen, merely wished to solve a troublesome problem in the cheapest manner … Accordingly, little provision was made for anything beyond the actual transportation … More regard was paid to markets than to seed-wheat, to military precedence than to food supplies. There was no land policy … ” 2 In 1788 Britain was disentangling its North American involvement and was about to become involved in the momentous struggle against Napoleon. India was still governed by the (British) East India Company, and while Phillip’s three immediate successors as governors of New South Wales were also naval captains, there seems little to support the surmise that Sydney was envisaged as a significant naval base and trading port.

EVOLUTION OF LAND LAW

Land tenure and land speculation were issues from the outset. The early decades of the 19th century were characterised by ad hoc gubernatorial land grants; by the institution for a time of attaching modest quit-rents to land grants, and the prohibition of selling within five years; by conflicts with the Colonial Office in Whitehall (six months away by sea); and later by the intense and protracted controversy over thephenomenon of “squatting” by pastoralists over huge areas of Crown lands at very low rentals which the Colonial Office viewed as impeding the general development of population and industry. The vociferous public exchanges between William Charles Wentworth, pastoralist, leader of the free settlers, and campaigner for self government, and Governor George Gipps are a matter of record. Gipps, arguably one of the ablest and most principled of the early governors (1833-46), frustrated Wentworth’s bizarre attempt to buy from Maori chiefs some 20 million acres of New Zealand (then a dependency ofN.S.W.) at the rate of one hundred acres per farthing.

Following Earl Grey’s memorable 1848 instruction, reservation clauses were written into colonial leases, but his sentiment that “the settlers in Australia have incurred a moral obligation of the most sacred kind” and his hope that the Imperial government had made every effort “to avert the destruction of the native race as a consequence of the occupation of the territory by British subjects” were imperfectly reflected in subsequent colonial (and post-federation) practice. 3 A century and a half later, landmark decisions of the Australian High Court in 1992 and 1996 refocused attention upon indigenous land tenure. The Mabo decision in 1992 4 disposed of the doctrine of terra nullius and established that, while sovereignty passed to the British Crown when Cook raised the union flag, indigenous ownership was not necessarily extinguished – a difficulty of course being that ownership as understood by Aboriginal Australians has always been conceived as communal rather than individual. The Wik decision in1996 5 held that Aboriginal ownership could co-exist with pastoral leases. Uncertainty about native title still prevails. The High Court decisions are not a reflection of any significant Georgist influence, but they underscore the difficulties inherent in any concept of absolute private ownership of land. Federal and state legislation has since provided mechanisms for establishing Aboriginal land claims – but not over land already alienated in freehold.

Clear evidence of the influence of Georgist philosophy emerged in the latter part of the 19th century. After the cessation of (convict) transportation and the influx of population following the gold discoveries in the 1850s, the 19th century saw profound changes in colonial society and in the character and emphases of political and
economic debate, along with considerable innovation in land administration.

In the absence of a comprehensive overview of the evolution of Australian land law and administration, Justice Rae Else-Mitchell’s lucid monograph Legacies of the Nineteenth Century Land Reformers from Melville to George (1974) goes a long way towards filling the gap and spelling out the chronology. Land speculation, leasehold tenure and land taxation were dominant themes. Else-Mitchell pays tribute to the remarkably high quality of intellectual activity in the late 19th century in what was still a relatively small society. He discusses the pervasive influence of Henry George and the rapturous reception accorded him during his visit to Australia in 1890 – his 1879 masterpiece Progress and Poverty “took on some of the qualities of a book of gospel”.

In Queensland the Lands Minister Charles Dutton, who introduced far-reaching and enduring reforms, was strongly influenced by Henry George. In Tasmania, however, Henry Melville’s book, in which he urged that the whole of the colony’s revenue should be chargeable upon the land, preceded Henry George by forty years.6 Another who preceded George was William Gresham, a friend of J.S. Mill, who established the Land Tenure Reform League in Victoria which urged “the gradual abolition of all indirect taxes whatsoever, the revenue of the state to be derived solely from the rental of land.”7 Notorious land speculation in Victoria in the 1880s associated with railway and tramway extensions 8 increased the pressures for reform.

Land reform (in the six separate self-governing colonies prior to federation) was not uniform or contemporaneous. Nevertheless, citing the extension of leasehold tenure and progressive experiments with it in the case of perpetual, homestead and conditional purchase leases, Else-Mitchell, respected lawyer and valuer, concludes his tribute to the 19th century reformers with a significant observation: their practical achievements “far exceeded anything which had been accomplished in the United States of America or the United Kingdom” – a judgment borne out by the fact that land reformers in the U.S. and U.K. have yet to achieve Georgist reforms in land valuation and municipal rating practice commonly accepted in Australia a century ago.9 (Rating on land only, i.e. excluding improvements, dates from about 1887.)

THE COMMITMENT TO LEASEHOLD IN CANBERRA

Henry George certainly influenced the leading protagonists of federation in 1901 and the decision to adopt leasehold tenure for the 900 square mile seat of the Commonwealth government, now the self-governing Australian Capital Territory. It was envisaged that leasehold tenure would fund the subsequent development of the national capital. But the early administrators made the fatal mistake of providing for reappraisement of land rentals in Canberra at twenty-year intervals. After a period of accelerated growth in the 1960s, a re-assessment of Canberra land values in 1970 led to such a dramatic increase in rentals that – prior to an election – the (Commonwealth) government abandoned leasehold as a fiscal instrument and bestowed upon existing leaseholders an absurdly munificent windfall gift of public revenue forgone. Instead of lease rentals it resorted to a dubiously founded system of rating, coupled with a betterment levy on land value increases attributable to any changes in the permitted use of leases. Thereafter leases for terms of years were sold virtually as freehold.10

Thus the incongruous outcome in Canberra reflects a diluted Georgist inheritance in that the residual leasehold system in the A.C.T acknowledges that land ownership is still vested in the Crown; and betterment, when it is levied, accords with Georgist philosophy. However, the practical significance of vesting ultimate land ownership in the Crown is debatable. Outside urban areas, most of Australia is held from the Statesunder various forms of Crown leasehold. The Crown is the acknowledged owner and lessor. Unoccupied land is referred to as Crown land. But whether the Crown really has any residual ownership rights in respect of land after it has been alienated in fee simple, i.e. in freehold title, is open to question. As early as 1834 the first Chief Justice of the NSW Supreme Court sought to dispel any doubts about whether the vesting of all land in the Crown had been translated to colonial Australia. 11 In the course of a judgment he referred to all lands in the colony being vested in the Crown “as the representative of the British Nation”. The legal fiction remains in the case of freehold, but as a pale shadow of feudal possession subject to communal obligations (although the term “resumption”, used to describe compulsory acquisition for public purposes, implies that the State is “resuming” its underlying ownership).

LAND TAXES

Whether current land taxes in Australia are indicative of Georgist influence is likewise debatable. In the latter part of the 19th century, land taxation in the colonies was aimed at both revenue raising and breaking up excessively large estates, particularly those held by absentees. After the turn of the century it seems Labor(State) governments were attracted by the prospect of taxing land into use, but the land tax introduced by the Commonwealth (federal) government in 1910 had no purposeful Georgist rationale. Georgist purists would, correctly, prefer to refer to land value taxation (and better still to resources rental). But the rationale of land taxes has never been explicitly Georgist. The Commonwealth discontinued land tax in 1952. Land taxes in Australia, now imposed by the State governments, are essentially an arbitrary wealth tax.

Frank Stilwell’s chapter reviews land tax and its presently confused and depressingly diverse implementation in federal Australia, while at the same time demonstrating the potential of land taxation as a revenue source which could permit the abandonment of irrational tax imposts like payroll and stamp duty taxes currently levied by State governments in pursuance of the arbitrary apportionment of fiscal responsibilities prevailing in Australia. Even (conservative) prime minister Howard, whose party has traditionally opposed the centralisation of government in Canberra, has conceded that dispensing with state-level government might better serve the national interest than retaining the compromise apportionment of powers and responsibilities negotiated by the framers of Australian federation in 1901. But an end to the present wasteful and fractious overlapping of jurisdiction is not imminent.

SAMUEL GRIFFITH’S NATURAL LAW BILL

Before pursuing the Georgist inheritance in the 20th century, a surprisingly little-known event occurred in 1890. It reflects the fertility of intellectual debate which then prevailed and at the same time ranks among the accidents of history which have frustrated the pursuit of land reform (like the curtailment of potential tax reform by the French Revolution, Henry George’s narrow failure to become mayor of New York, and the defeat of the reforms proposed by the Lloyd George and Snowden governments respectively in 1910-11 and 1931).

Some of the unfortunate consequences of the commodification of land might have been effectively negated in Australia at the end of the 19th century if a Bill introduced in 1890 by Sir Samuel Griffith, Premier of Queensland, had be come law. The Bill was for an Act to be cited as The Elementary Property Law of Queensland “to declare the Natural Law relating to the Acquisition and Ownership of Private Property”.

Seeking to ensure a “proper distribution of the products oflabour”, it enunciated “First Principles”, among them that “The right to take advantage of natural forces belong s equally to all members of the community”; that “Land, b y natural law, is the common property of the community”; and that “All property, other than land, is the product or result oflabour”.12 The text of this remarkable document is reproduced as Appendix “A”. One can only surmise about the evolution of land law and public and political perception of land as a resource if the Bill had proceeded. Alas, because of parliamentary instability and the looming financial crisis of the early 1890s, the Bill lapsed. (Griffith became Chief Justice of Queensland and went on to become the first Chief Justice of the High Court of Australia, but continued to espouse the principles of Natural Law after his retirement in 1919.)

TAX REFORM

Agitation for tax reform is an enduring legacy of Henry George (and his predecessors). In Australia it simmered throughout the 20th century and became a lively focus of debate in the 1980s and 1990s, the outcome of which, however, did not reflect any significant Georgist influence.

While a number of respected economics texts explicitly endorse the taxation of land,the Henry George Foundation-sponsored Association for Land Value Taxation was denied attendance at (Labor) prime minister Hawke’s much publicised and purportedly widely representative “National Tax Summit” in 1985. In 1996 a comprehensive analysis prepared by four well-qualified professionals on behalf of the Land Values Research Group suffered a similar fate. It was submitted to the “National Tax Reform Summit” jointly convened by the Australian Chamber of Commerce and Industry and the Australian Council of Social Service, but was ignored on the conference agenda and by the popular media. Arguments for and against a goods and services tax were the main focus of debate. Subsequently the H.G.F.A. sponsored a “Challenge”, offering a $25,000 prize for the most convincing refutation of the L.V.R.G. submission. The competition was widely advertised and attracted professional and academic attention, but little editorial attention in the media. In the event, it attracted only 17 entries of indifferent quality, none of which impressed the respected independent economists who evaluated them (Emeritus Professor Russell Mathews and Professor Rod Jensen).

Not echoed in Australia were the sentiments of the U.K. Conservative government’s committee which in 1995 reported in favour of “a gradual move away from taxes on labour, income, profits and capital towards taxes on pollution and the use of resources”. Billed as a once in a lifetime opportunity, the opportunity for real reform was squandered. By the time of the 1998 federal election, prime minister Howard’s “great adventure” had degenerated into a pro- and anti-goods and services tax debate, and a tawdry auction for votes in the course of speculation fostered by the popular media about the likely winners and losers of a few short-term dollars. The lure of lower taxes was more potent than the prospect of serious tax reform.

By common admission the Australian tax system is seen to be defective because of its absurd complexity, its high compliance costs and its vulnerability to avoidance and evasion. Yet the protracted reform debate of the 1990s was very narrowly based and the end result was an anti-climax. After a very close vote in the Senate, in 2000 the Howard government’s extravagantly publicised “new tax system” introduced a regressive thirty year-old value added approach to taxation which vastly increased its complexity, particularly for individual professionals and small businesses. There were no overt indications that the government or the Commonwealth Treasury ever considered the merits of land value taxation, or the wider concept of natural resources rental and taxes comprehensively argued by Clive Hamilton of the Canberra-based Australia Institute. In effect tax reform in Australia was still-born in 2000 – a testament to an entrenched mindset which instinctively rejects any reformist proposition which involves re-thinking the nature of land. In the new millennium it remains to be seen whether smouldering resentment generated by the Goods and Services Tax rekindles agitation for reform.

Nevertheless, while the actual outcome in 2000 was totally antithetical, there were concurrent indicators of the endurance of Henry George’s legacy. In mid-1997, for example, Georgist philosophy was re-visited by one of the nation’s most respected economic commentators. In feature articles headed “An idea for tax reform, by George” in both the Melbourne Age and the Sydney Morning Herald, Maximilian Walsh recalled the vociferous welcome accorded Henry George at his first hour-long meeting in Sydney in 1890, reportedly interrupted 46 times by cheers. Reviewing George’s influence on pre-federation Australia and on Sun Yat Sen’s land reforms in Asia, Walsh pointed out the surprising relevance of Georgist philosophy now to nation-states confronted with the erosion of their traditional tax revenue bases by globalisation and communications technology. The need was to shift taxes “to assets or activities anchored in the ‘domestic economy such as land and land usage taxes”.13 Also in 1997, P.P. McGuinness, another S.M.H. columnist, said that George preceded modem environmentalists in seeing land “as a common resource belonging to future generations as well as the present” and land taxation “as a means of opening it up, pushing unused or monopolised land into productive use”.14 And in his column in the Australian Financial Review, former (Labor) federal finance minister, Peter Walsh, seldom missed an opportunity to assert that taxing the unearned increment was the most rational and least economically distorting form of revenue raising.

Contemporary major reports, notably by H. Pender of the Australian National University and M.T. Young of CSIRO (the Commonwealth Scientific & Industrial Research Organisation), urged the capture of the unearned increment by broad-based land and resources taxes in the interests of both equity and sustainable development.

Earlier, in 1979, Edward Nash, the economics editor of the Adelaide Advertiser used the centenary of Progress and Poverty to review the legacy of Henry George, who had addressed three public meetings in Adelaide in 1890. “The survival of the American’s ideas to this day says something about their appeal … The philosophical base for George’s economic views was simply that a landholder had no more right to charge rent for land he did not create than he would have to monopolise the air and charge others for the right to breathe it”. Nash used the occasion to deplore the situation in South Australia where (unlike Queensland, N.S.W. and the A.C.T.) homeowners’ local government rates rose with the improvements they made to theirproperties. 15 (Stilwell refers to these differences in interstate practice).

THE GEORGIST MOVEMENT

One indicator of the endurance of the Georgist legacy in Australia (and its likely future endurance) is of course the influence and status of the Australian Georgist movement. Now distant in time from the heady days of the 1890s, the formal organization of the Georgist movement in Australia has had a somewhat chequered and less than inspirational history.

Early benefactors assured the establishment and continuance of the Henry George Foundation of Australia Incorporated, based in Melbourne with a board of trustees, and the establishment of the Henry George Foundation of N.S.W., an incorporated company located in Sydney. The latter has had a protracted litigious relationship with a factional offshoot, the Association for Good Government. The most active propagation of Georgist philosophy in recent years has been undertaken in Victoria by Prosper Australia (formerly Tax Reform Australia) with funding from the H.G.F.A. The journal Progress, in an attractive format, celebrated its centenary in May, 2004 amidst some evidence of a recent resurgence of interest and a less elderly membership. Small associated bodies with a mere handful of mostly ageing members exist in the other States. Some substantial research was undertaken in Victoria in earlier years16 and again more recently by the Land Values Research Group which has an interstate membership coordinated by respected valuer Bryan Kavanagh. The Group’s ecumenical patrons are a former federal Liberal (conservative) minister and a former federal Labor minister, The Honorable Sir Allen Fairhall, KBE, and The Honorable Clyde Cameron, AO.

There is, however, no one all-embracing nationally acknowledged Georgist body. The Georgist movement has been diminished by disputation about terminology; by the conviction of many disciples that the overnight conversion of the unenlightened requires only a reading of Progress and Poverty and reiteration of the “single tax” mantra; and by a corresponding reluctance to acknowledge that, in any society, there is a legitimate place for user charges, and for ecological penalties and sumptuary taxes on things like alcohol, tobacco and petrol (and even a place for tariffs if the economic rationalist pursuit of freer trade in a globalised economy has intolerable social consequences). There has been too little research into the real-world implications and administrative pre-conditions associated with implementing Georgist philosophy in practice (and, realistically, in stages): plus too little analysis of the fundamental enigma: society’s seemingly purblind resistance to what, to Georgists, is so logical and obvious. (One H.G.F.A. trustee, disenchanted with the movement’s otherworldliness, is known to have found the bi-annual meetings of the trustees evocative of Alice in Wonderland.)

In the 21st century the Georgist movement could identify – and consolidate Georgism’s contribution to economic policy in Australia. But not by simple regurgitation of late 19th century doctrine. Nor by extravagant assertions that the Georgist panacea would eliminate unemployment in a society whose adopted lifestyle is dependent upon labour-displacing technology. Or by unqualified assertions about
increasing housing affordability. Land rental could reduce to zero the capital price (but not the value) of land and thereby eliminate the initial capital cost of the land component from the house and land package. Housing would be relatively less expensive. But in expanding metropolitan areas and in other premium locations of high demand, land values will continue to rise and low income affordability will remain a social problem warranting public policy intervention.

Paradoxically, there are factors present now which are insufficiently appreciated by the Georgist movement but which make the basic Georgist argument demonstrably more persuasive. Comprehensive land use planning schemes, for example, make it easier to demonstrate that, regardless of its natural attributes and access to services, the market value of any parcel of land is ultimately determined by the use to which the community, via its public planning agencies, allows it to be put, either as a permitted or conditionally permissible use. The inequity of allowing private landholders to appropriate increases in land value attributable to public land use decisions can thus be demonstrated more precisely than in George’s day. The status of land as a community resource is demonstrably more apparent than in 1879.

Secondly, the technical feasibility of annual (or more frequent) revaluations means that valuations to calculate annual rental can now be kept up to date and more accurately reflect changes (upwards or downwards) in market value attributable to economic circumstances or public decisions about land use and the provision of public infrastructure.

Thirdly, the proliferation of transnational industry and commerce and technological advances in communication have vastly increased the mobility of capital and widened the scope for both legitimate tax avoidance and money laundering. Thus, far more so than in 1879, contemporary economic circumstances highlight the merits of an
immobile revenue source for nations confronted with a shrinking traditional revenue base.

A fourth circumstance is the increasing recognition and endorsement of the notion of environmentally sustainable development, any meaningful pursuit of which must come to terms with the valuation and pricing of the planetary community’s natural resources, and eliminate development pressures primarily motivated by the prospect of unearned private profit from natural resource exploitation.

In other words, at least four factors render Georgist philosophy more relevant and more persuasive than in George’s time and administratively more capable of practical implementation. Thus the Georgist inheritance in Australia, however defined and by whatever name, seems more likely to wax than wane. Nevertheless its actual impact on future economic policy remains to be seen.

Within the Australian Georgist movement there has been some unproductive speculation about the interpretation of Progress and Poverty and George’s voluminous other writing, but in academic circles there has been nothing like the volume of discussion which Georgism continues to generate in America. In part of course this is a reflection of a smaller society. But it also reflects the fact that, in much of Australia (and New Zealand), municipal rating on unimproved land values has been taken for granted for more than a hundred years. Far from being a focus for Georgist activism, it is not explicitly recognised as reflecting Georgist doctrine, and this, paradoxically, doesn’t assist in logically urging the extension of Georgist philosophy into other areas of revenue raising. It is one of the factors which make identifying and quantifying the Georgist inheritance in Australia difficult.

In the terms in which it was conducted, Henry George’s memorable disputation with Malthus is not particularly relevant in 21st century Australia. His contention that more people could be fed if productive land were not held out of production by speculators and monopolists remains intrinsically valid, regardless of scientific (and fossil fuel dependent) advances in food production. A 21st century Malthus might be more disposed to argue that the planet’s capacity to employ people meaningfully and equitably may well be a more valid reason for curbing population growth.

The forcing of vacant or under-developed land into productive use was of course a cornerstone of George’s 1879 thesis. Whether it threatens or conflicts with the principles of ecological sustainability and the preservation of environmentally significant undeveloped land or other natural resources has been canvassed in some academic writing (for example, by Backhaus and Krabbe writing in the American Journal of Economics and Sociology in 1991). But in any well-conceived land use planning system this is a needlessly contrived non-issue. The natural environment can be protected by well-conceived land use controls. Whether they are adequate in any given circumstances will depend upon the public will and governmental competence in devising and enforcing them.

In Australia a more puzzling issue is the seeming tardiness of the environmental movement to appreciate the status of land and recognise that Georgist philosophy goes to the very core of environmental concerns. The unearned increment, if not captured for the community, renders all land vulnerable to private developmental pressures motivated by the prospect of windfall land value profits.

THE IMPACT OF TOWN PLANNING

Reflecting the difficulty of observing a chronological sequence which was foreshadowed at the outset, it is necessary to revert to the first half of the 20th century in order to trace the emergence of town planning as a significant responsibility of government (which in Australia means the six state and two territory governments and not the federal government to which the 1901 Constitution did not allocate any specific jurisdiction in respect of regional and town planning). Over time, land use planning has both widened the scope for public revenue raising and more overtly exposed the ravages of the unearned increment.

Town planning theory has a respectable Georgist congruence. Thus the 1932 English Town and Country Planning Act acknowledged the logic of capturing a percentage of the betterment conferred on landowners by public planning decisions which increased the value of their land, and conversely it envisaged compensating landowners who were disadvantaged and suffered detriment. The 1932 Act was the model for town planning legislation adopted in the Australian States following World War II. However, governments shied away from imposing betterment levies and sought to confine very narrowly landowners’ entitlements to compensation. Nevertheless a decision of the NSW Land and Valuation Court in a compensation case in 1954 17 acknowledged the concept of betterment. In assessing the compensation claimed, Judge Hardy held that it should be offset by the betterment conferred on other land held by the claimant. While acknowledging that planning restrictions such as those in respect of setbacks, building heights and minimum lot sizes restricted the rights of landowners, the Court held that these so-called “good neighbour” restrictions did not confer any entitlement to compensation. Thus in respect of compensation Bingham’s case established a restrictive precedent which has since prevailed in town planning law. As for betterment, the only examples of specific betterment levies are the levy which has operated in the A.C.T. since 1971, and the levy which the N.S.W. government imposed between 1971 and 1973 in respect of land controversially released from Sydney’s Green Belt.

In the absence of any means of capturing the windfall increase in land value conferred on private landowners by the decisions of public planning agencies, the town planning system is fundamentally flawed. As a State Planning Authority valuer and town planner stated in evidence before the N.S.W. Royal Commission of Inquiry into Rating, Valuation and Local Government Finance in 1967, “Before the introduction of prescribed town and country planning schemes the present system of council rating siphoned off some of the unearned increment … (but) once a town planning scheme is prescribed, rural land becomes residential, commercial or industrial in the time it takes a Minister to sign a document. Values increase threefold overnight. Lucky owners, participants in the land lottery, by selling immediately at the enhanced figures are able to pocket the unearned increment”. This evidence was a key factor in the Commission’s recommendation that some of the unearned increment or betterment be captured for community purposes, a recommendation which the N.S.W. government subsequently implemented in the case of the Green Belt release. But not thereafter. A solution compatible with Georgist philosophy (though not referred to as such) was not pursued.

In Land: The elusive quest for social justice, taxation reform and a sustainable planetary environment (Day, 1995), the economic and environmental ramifications of the “fatal flaw” in the planning system are reviewed at length, including their implications for national development. In 1993 a (Commonwealth) Economic Planning Advisory Council research paper alluded to the disposition of individual Australians “to direct their savings towards property rather than new business investment”.18 In 1996 the Land Values Research Group compiled statistics showing that, at the peak of the real estate boom in 1989, the land value component of property sales was approximately 70 percent.

PRAGMATIC RESPONSES

Meanwhile, in the absence of betterment levies, a pragmatic alternative had begun to evolve in the 1960s which exhibited an identifiable but similarly unstated Georgist influence. Confronted with a severe infrastructure backlog in the post-war period, hard-pressed local government councils resorted to imposing conditions upon
planning approval requiring a contribution of infrastructure from land developers. Modest and tentative at first, such contributions became increasingly substantial, resisted by the development industry and viewed ambivalently by State governments. In Queensland, for example, the government appointed a commission of inquiry into the allegedly arbitrary practices of the Brisbane City Council.

As the practice of extracting contributions evolved, the kinds of infrastructure which could legitimately be required (or a financial contribution in lieu) were – and remain a matter of legislative controversy. Practice has varied among the States. In Western
Australia a condition of approval of some major subdivisional developments was the provision of a percentage of lots for lower-income homeseekers. The N .S. W. Environmental Planning and Assessment Act of 1979 became the most sophisticated and comprehensive legislative statement, which, as amended, enables councils to require contributions to a wide range of community infrastructure (though not to as wide a range as that embraced by “planning gain” in the U.K.).

The evolution of development conditions was reviewed in Land Value Capture (Day, 1992). While the concept remains controversial and ill-defined, planning authorities and government ministers have long been fully cognisant of the fact that planning approvals can confer very large windfall profits on landholders. Nevertheless a problem in ascribing the practice of extracting development contributions to the endurance of Georgist philosophy in Australia is that their rationale has never been clearly spelt out, and the quantum of contribution in any given case is not explicitly related to the increase in land value attributable to development approval. While the practice is clearly compatible with Georgist philosophy, there has never been any overt attribution to Henry George or his predecessors.

There are no recent estimates of the windfall land value profits which are not off set by development contributions or capital gains tax. In 1993 an estimate by the National Capital Planning Authority quoted by the Commonwealth’s Industry Commission was that throughout Australia some $300 to $400 million of potential infrastructure investment funds was forgone every year.19 A comprehensive analysis of the enormous revenue potential of land value taxation in Australia will be found in Terry Dwyer’s chapter. As for the merits of land charges as a means of municipal revenue raising, in 1987 a broadly representative committee of inquiry into valuation and rating was appointed by the Lord Mayor of Brisbane, the nation’s largest local government authority, in response to widespread public concern at the assumed impact which the Valuer-General’s substantially increased city-wide valuations would have on council rates.

In the course of two and a half years’ research, the committee reviewed the philosophy and principles of taxation, compiling a matrix of all the desiderata against which revenue-raising alternatives could be tested in the pursuit of equity and efficiency. It concluded that, in seeking to recover the cost of the public works and services it provided, a revenue-raising authority should charge the beneficiaries or users of such works and services to the extent that such works and services and their beneficiaries could be identified. Where works and services could not be separately identified and charged for, their cost should be recovered by some form of basic general charge which should nevertheless as far as possible reflect the benefit principle. The committee then evaluated poll taxes, taxes on income and sales, taxes on land value and on improved property value, and licence fees (as well as the scope for local government trading enterprises and joint ventures). It came to the unanimous conclusion that rating on the unimproved value of land was the most efficient and equitable general revenue base for Brisbane, and, significantly, it expressed the view that, in principle, the unimproved value of land was a logical and appropriate basis for revenue raising irrespective of the level of government.

Henry George would have applauded, although the committee’s orientation was not avowedly Georgist. In the event, the committee’s two-volume report in 1989 did not attract a great deal of attention from media representatives indisposed and ill equipped to explore the intricacies of a seemingly arcane subject area. In effect, the
committee’s findings served to confirm and validate longstanding municipal practice in eastern Australia.

Some random occurrences contribute to the difficulty of systematically quantifying contemporary Georgist influence in Australia. For example, in 1976 Australia endorsed the recommendations of the United Nations (Habitat) Conference for National Action on Human Settlements, the so-called “Vancouver Plan for Action”. The recommendations on land emphasised its special quality: “Land, because of its unique nature and the crucial role it plays in human settlements, cannot be treated as an ordinary asset controlled by individuals and subject to the pressures and inefficiencies of the market … The unearned increment resulting from the rise in land values resulting from change in the use of land, from public investment or decision, or due to the general growth of the community must be subject to appropriate recapture by public bodies (the community) … “20 However, no practical consequences attributable to Australia’s endorsement of the Vancouver Plan are readily identifiable.

In 1990, a private consortium proposed to build a new line between Sydney and Melbourne via Canberra and run a “Very Fast Train” to cover the 800km journey in as little as three hours. It was to be funded in part by rezoning land along the route. Contemplating this form of public/ private partnership, using land value profits to provide public infrastructure to be operated for private profit (reminiscent of the 19th century North American railways) requires a degree of philosophical agility. For environmental and other reasons the V.F.T. project did not proceed. But in the U.K. the suggested recoupment of land value increases generated by the new Jubilee underground line in South London as a means of funding other transport infrastructure has attracted the attention of the Greater London Council and the U.K. Treasury, and endorsement in principle by the financial press and English Georgists. At the time of writing, the Australian government had not displayed any similar interest. It is interesting, however, to recall the remarks of Judge Foster in the Arbitration Court in 1947, when he observed that, far from being a morale-destroying proposition owing some 30 million Australian pounds, Australia’s railways would be in credit to the order of about 100 million pounds if the land value increases they had created were entered on the credit side of the ledger.21

BETTERMENT AND COMPENSATION

In 2004 interest in the related concepts of betterment and compensation resurfaced, promoted by the sensitive issue of vegetation clearing in response to the greenhouse gas emission targets proposed by the Kyoto Protocol and widespread environmental concern generally at the extent of clearing, particularly in Queensland. The Queensland government imposed new limits on clearing which evoked plausible demands for compensation from landholders who had purchased or leased land specifically for agricultural or pastoral purposes, demands which funding constraints and the traditionally narrow public policy concept of compensation established in Bingham’s case (supra) have induced governments to resist.

A recent report entitled “Encouraging Conservation through Valuation” prepared by the Queensland Department of Natural Resources, Mines and Energy canvassed the possibility that lower valuation of uncleared land would be reflected in lower municipal rates (or State land tax and leasehold rentals where applicable) and accordingly would operate as an incentive to preserve vegetation (and reinforce planning objectives in urban areas). The proposal accords with Georgist principles; but the incentive impact would regrettably not be significant because municipal rates on land are presently only a minuscule proportion of public revenue in federal Australia.

While often paired in common parlance, betterment and compensation have no functional relationship. However, a betterment levy on land value increases could certainly raise funds to help offset compensation claims. But a specific levy would be a politically unpalatable new tax. Moreover, while on the face of it betterment levies (and development contributions) have a persuasive logic, they have significant limitations.

In the case of land use planning decisions, for example, the land value increase derived from immediate before-and-after valuations for the purpose of a once-off betterment levy may understate the true increase since in many situations the change to a more intensive use will have been anticipated by the market months or even years in advance. Secondly, betterment levies or their development contributions surrogate cannot work in reverse and compensate detriment or “worsenment”. And thirdly, a once-off betterment levy cannot recoup the betterment conferred on landowners over time by the incremental extension of public infrastructure and community development. A small percentage of this benefit is currently recouped by municipal rates levied on annually re-assessed land values, whereas virtually all the benefit could be recouped if public revenue were to be wholly dependent on land value charges. Or, as some Georgist activists have put it, if national revenue were raised “by municipal rating writ large”. Betterment from whatever cause would be automatically recouped, and worsenment from whatever cause would be automatically compensated – an outcome completely in accord with Georgist doctrine. As alluded to earlier, however, enlarging the contribution of land value taxation to public revenue in Australia is frustrated by the arbitrary but currently accepted apportionment of revenue-raising responsibilities between federal, state and local government. Meanwhile controversy over land clearing awaits final resolution.

ATTEMPTING AN ASSESSMENT

Confronted with disparate threads, a moving target and unrelated events, any attempt to draw the threads together and conclusively evaluate Henry George’s continuing influence in Australia must unavoidably be subjective. Given the interest commonly expressed in many quarters in the scope for, and desirability of, raising an increased proportion of public revenue from expanded taxes on land, coupled with the widely acknowledged concern about the windfall profits accruing to land developers, a Georgist influence is certainly identifiable. In mid-2004, for example, the former lord mayor of Brisbane, addressing a planning conference, related infrastructure funding directly to betterment. The billion dollars spent by the State on upgrading the motorway between Brisbane and the Gold Coast had created a land boom for broadacre landholders along the route, “but the State had failed to capture for future generations any of the value it had created”.22

But the Georgist influence is nowhere explicit. Partly because a century after the widespread enthusiasm which Henry George’s visit and writings inspired, his name is virtually unknown, even among graduates in economics and commerce, let alone sociology. And partly because, to the extent to which it is known, Georgism has come to signify something which is unrealistic and unattainable – and academically not entirely respectable. A related difficulty in assessing the influence specifically of Henry George is that his impact cannot be asserted prior to 1879, whereas awareness of the basic ingredients of Georgist doctrine owes something to his predecessors like Ogilvie, Adam Smith and the Physiocrats and, indeed, to his predecessors in colonial Australia.

Another difficulty is that some policy decisions in Australia since 1788 have arguably been responses to circumstances and do not warrant specific doctrinal attribution. If so, it can of course be argued that, to this extent, Georgist doctrine is an expression of the logically obvious which ought to be pursued by whatever name. Indeed, given the ineffectual endeavours of the formal Georgist movement over the past century, preferably not in Henry George’s name.

Summing up, the trail is a convoluted one and the evidence is disjunctive and chronologically elusive. An identifiable Georgist inheritance is tangible and enduring. The Georgist legacy undoubtedly survives in Australian fiscal practice. But it is not the result of explicit pursuit of Georgist philosophy, or an obvious product of Georgist advocacy. The latter has been relatively unsuccessful for some of the reasons which have been alluded to, not least a single-minded preoccupation with tax reform, and a lack of appreciation of the land use planning process and the inter-related revenue and infrastructure funding issues which are of topical interest. Simple reiteration in the 21st century of the gospel according to George will not suffice. The fundamental illogic of taxing productive labour and capital does not need Georgist attribution. Nor does the fact that massive revenue is potentially available to finance public infrastructure and public housing. Or the demonstrable practicability, over time, of automatically capturing betterment and awarding compensation, and eliminating the threat to environmental sustainability and public morality posed by the insidious unearned increment.

To those who have “seen the cat” and believe that the logic of land and resources rental is irrefutable, debate about the extent of attribution specifically to Henry George is academic. His place in history is sufficiently assured. He shouldn’t become an over-worked standard-bearer. Tactically it may be counter-productive (and historically inaccurate) to describe the pursuit of resources rental as the
resurgence or resurrection of Georgism.

For reformers, the essential practical target is the pervasive mindset, inadequately confronted by the Georgist movement, which so obdurately resists implementation of the logically irrefutable.

Notwithstanding the enormous revenue potential, the scope for vastly simplified revenue-raising, and the prospect of automatic resolution of betterment and compensation, the mindset is sustained by cultural and political inertia compounded in part by misconceptions and terminological confusion and by assumed obstacles. The vital distinction between absolute ownership of man-made property and exclusive conditional possession of natural resources is not commonly understood. There is general public ignorance about valuation and rating and the difference between rates and taxes. And the history of State land taxes in Australia clouds the issue. At the forefront of popular resistance is apprehension that a land rental regime would eliminate the culturally ordained right to engage in speculative property investment – whereas land rental does not inhibit outright ownership of, and trading in, property on land. Nor, indeed, does it inhibit profiting by transferors from inducements paid by transferees to secure the transfer of land which has increased in value. 23 Assumed obstacles include the impact of universal land value taxation on the “asset-rich but income-poor” (discussed by John Pullen), and the possible differential impact on some industry sectors. For pensioners and other low income property owners living in inner urban areas where land values have escalated – as well as property owners confronted with illness or sudden hardship – land value tax can be deferred (like municipal rates, but preferably not remitted, since the liability properly runs with the land). Whatever concessions or relaxations needed initially are likely to be infinitely less complicated than those which currently litter the Income Tax Assessment Act and associated G.S.T. legislation. Yet it all seems too hard (although to some, incredibly, Georgist doctrine has seemed too simple).24 And a time lag is inevitable in democratic societies sustained by universal adult franchise, particularly, one is tempted to add, if voting, as in Australia is compulsory.

The target of reform needs to be clearly focused. It is not really the commodification of land. The fateful commodification of land in the later Middle Ages is almost certainly irreversible. And while the notion of commodifying air and water is repugnant, it is not in fact impossible, as evidenced, for example, by the strata titling of vertical development and commodification of the radio spectrum. One practical issue for Georgists is a concomitant fiscal outcome of commodification. Ironically its commodification should have made land a potential target for taxation like any other commodity. But the Middle Ages also bequeathed to Anglo-Australian society one of the elements of the pervasive enigma, namely the relative immunity of land from taxation and the persisting sanctity associated with land ownership. Both derive from the dominance of landowners, elected by landowners, in the parliaments of England until the extension of the franchise in the 19th century. As Richard Cobden graphically demonstrated in the House of Commons in 1845 in the course of a powerful denunciation of the notorious corn laws, the whole of the revenue of feudal England had been derived from the land of the realm for the first 150 years after the Conquest, but by 1845 the proportion had declined to a mere one-twentyfifth.

Australia can accommodate commodification, even if the concept is unintelligible to the indigenous population. Individual title and communal title can both subsist. The real evil – as Henry George so clearly perceived and consistently emphasised – is the unearned increment derived from the private exploitation of land and other natural resources (irrespective of tenure).

Private capture of the unearned increment has conferred the seal of approval on private profit-seeking – the satirised “greed is good” syndrome of the 1990s – which has become obsessive throughout western society – with the blessing of neo-classical economics. A powerful case can be argued that virtually all the symptoms of the
widespread malaise lamented by the social commentators – the erosion of communitarian values and institutions, the increasing disparities of wealth and influence, the structural unemployment, and the consequential alienation and despair in an increasingly violent, insecure and underemployed society – derive from cultural acceptance of the unearned private exploitation of the community’s natural resources in the ruthless pursuit of economic efficiency at the expense of social efficiency.25

The unearned increment is the instrument of creeping dollar darwinism. Its elimination would be an enduring tribute to Henry George and an ultimate reaffirmation of his legacy.

____________________________________

1 Quoted by Nettheim (1993), Essays on the Mabo Decision, Law Book Company of Australia, p. l 03.
2 p.3.
3 See Reynolds, Henry (1995), TheOther Side of the Frontier, Penguin Books, Victoria.
4 Mabo and Others v. Queensland (No.2) (1992), 175 C.L.R.
5 Wik Peoples v. Queensland; Thayorre People v. Queensland (1996), 141 A.L.R.
6 Else-Mitchell, pp.7-14.
7 Brennan, Frank (1971) Canberra in Crisis, Dalton Publishing, Canberra, p.11.
8 See Cannon, Michael (1967), The Land Boomers, Melbourne University Press.
9 Else-Mitchell, p.30.
10 Canberra in Crisis, op.cit.
11 Currey, C.H. ( 1968), Sir Francis Forbes, Angus & Robertson, Sydney, pp.464-5 and 480-2.
12 Queensland Parliamentary Debates, Legislative Assembly, 1890, Vol.61, pp.306 and 688, Vol.62, p.1329.
13 6.6.97.
14 11.12.97.
15 25.8.79.
16 Notably A.R. Hutchinson’s Natural Resources Rental Taxation in Australia (1979), Land Values
Research Group, Melbourne.
17 Bingham v. Cumberland County Council, 20 L.G.R.
18 Research Paper No.34, Income Tax and Asset Choice in Australia, A.G.P.S., Canberra.
19 Taxation and Financial Policy Impacts on Urban Settlement, Vol. I, A.G.P .S., Canberra.
20 Preamble and Preface.
21 In the Standard Hours case on 21 May, 1947, Proceedings, p.7480.
22 The Courier Mail, 12.6.04.
23 The amount of the premium would be reflected in the next revaluation.
24 e.g. Leonie Sandercock (1979), The Land Racket, Australian Association of Socialist Studies, Melbourne, p. 79.
25 Measuring Progress (1999), C.S.R.I.R.O., Collingwood, compares Gross National Product with wellbeing measured by “genuine progress indicators”.

The author is very grateful to Geoffrey Edwards of the Queensland Department of Natural Resources, Mines and Energy for his advice and encouragement.

APPENDIX “A”
SIR SAMUEL GRIFFITH’S 1890 NATURAL LAW BILL 1890
A BILL To declare the Natural Law relating to the Acquisition and Ownership of Private Property

Preamble
WHEREAS it is essential to the good order of every State and the welfare of the People, that all persons should have and enjoy the fruits of their own labour, and to this end it is expedient to declare the natural laws governing the acquisition of private property: BE IT DECLARED AND ENACTED by the Queen’s Most Excellent Majesty, by and with the advice and consent of the Legislative Council and Legislative Assembly of Queensland in Parliament assembled, and by the authority of the same, as follows:

“Land” definitions

1. The term “land” means land in its natural condition resulting from the operation of natural forces unaided and undirected by man, and does not include any improvements made upon it.
   “Value” of land
2. When the term “value” is used with reference to land, it signifies the extent of the difference between the advantage of having the use of the land in question and the advantage of having the use of the nearest other land the use of which can be obtained by mere occupation without making payment to any person for such use.
   “Rent”
3. The return or payment demanded by persons having, by positive law, the right to the exclusive possession of land, for the permission to use that land, is called “rent”. Rent is therefore a measure of the value of land.
   “Labour”
4. The term “labour” includes all modes of exercise of the human faculties, whether of mind or body. It therefore includes the function of supervision or organisation of other labour.
   “Wages”
5. The immediate remuneration of Labour is called “wages”.
   “Property”
6. The term “property” includes all forms of material things in the possession of man which have a value for the purpose of exchange or use. It also includes inventions and other material
   results of the exercise of the faculties of the mind.
   “Production”
7. The term “production” includes any act or series of acts by which labour is applied, either directly or indirectly, to property, and the result of which is new property, or property in an altered form, or in a different place. It also includes the exercise of the faculties of the mind or body, the result of which is property, although the exercise of those faculties was not applied to property.
   “Capital”
8. The term “capital” means and includes all fonns of property not being land which are in use for the purposes of production. It therefore includes as well property which is consumed or destroyed as property which is not consumed or destroyed in the process of production.
   “Interest”
9. The term “interest” is used to denote either the immediate return derived from the use of,capital for the purpose of production, or the payment received by the owner of capital from another person by way of return for the use of that capital. Interest is therefore a measure of the value of the use of capital.
   “Productive labour”
10. The term “productive labour” means labour applied for the purpose of producing some,property which is, or is intended to be, of greater value than the value of the property (if any) to which the labour is applied.
    “Net products”
11. The terms “net products of labour” and “net products” mean the net increase in property resulting from productive labour, after allowing for the cost of production.
    “Cost of production”
12. The cost of production may include all or any of the following elements:
    ( 1) The replacement of the property which is consumed, or destroyed, or altered in form, or changed in place, in the course of the process of production;
    (2) The wages of the labour engaged in the production;
    (3) Interest on the capital used in the production;
    (4) Rent of the land used for the purposes of the production;
    (5) Incidental expenses not falling under any of the foregoing heads.
    “Positive law”
13. The term “positive law” includes all written laws enacted by a competent legislative authority. It also includes all unwritten rules declared by any competent judicial authority to be the law of the State.
    First Principles
    Equal right of all persons to life and freedom of opportunity
14. All persons are, by natural law, equally entitled to the right of life, and to the right of freedom for the exercise of their faculties; and no person has, by natural law, any right superior to the right of any other person in this respect.
    Natural forces common property
15. The right to take advantage of natural forces belongs equally to all members of the community.
    Land common property
16. Land is, by natural law, the common property of the community.
    Positive law
17. Positive law is the creation of the State, and may be altered or abrogated by the State from time to time.
    Functions of positive law with respect to natural law
18. The application of the natural law of equality and freedom may be modified by positive law, so far as the common advantage of the community may require, but not further or otherwise.
    Private rights to land
19. The rights of individual persons with respect to land are created by, and their incidents depend upon, positive law.
    Property the result of labour
20. All property, other than land, is the product or result of labour.
    Measure of wages
21. The natural and proper measure of wages is such a sum as is a fair immediate recompense for the labour for which they are paid, having regard to its character and duration; but it can never be taken at a less sum than such as is sufficient to maintain the labourer and his family in a state of health and reasonable comfort.
    Ownership of net products
22. The net products of labour belong to the persons who are concerned in the production. If one person only is concerned in the production the whole net products belong to him. If more persons than one are concerned in the production, the net products belong to them, and are divisible amongst them, in proportion to the value of their respective contributions to the production.
    Application of labour to property
23. When labour is not applied directly or indirectly to property, the whole products belong to the labourer.
    When labour is applied directly or indirectly to property, the person who is lawfully entitled to the use of that property is deemed to be concerned in the production as well as the labourer.
    Rights of possessors of land receiving rent
24. When for the purposes of production the use of land is required, then the rent (if any) payable for that use is a part of the cost of production.
    The person who receives the rent is not, by reason only of his permission to use the land, concerned in the production, but may otherwise be concerned in it. He is therefore not entitled, by reason only of such permission, to any share of the net products.
    Rights of occupiers
25. For the purpose of ascertaining the net products of productive Jabour applied to land, and the persons entitled to share in those products, the land to which the labour is applied is to be considered as if it were capital, and were the property of the person who for the time being is entitled to the possession of it.
    The amount of that capital is to be taken to be equal to the value of the land burdened with a perpetual rent equal to the rent (if any) payable by him for the time being.
    Ownership of products
26. The share of net products coming to each person who contributes to the production from which they arise is the property of that person, and may, subject to any positive law, be disposed of by him at his pleasure during his lifetime or by will.
    Enforcement of rights to share of products
27. Any person entitled to a share of the net products of any productive labour may enforce that right by proceedings in a Court of competent jurisdiction.
    Duty of State
28. It is the duty of the State to make provision by positive law for securing the proper distribution of the net products of labour in accordance with the principles hereby declared.
    Short Title
29. This Act may be cited as “The Elementary Property Law of Queensland”.
    
    REFERENCES AND FURTHER READING
    Andelson, R.V. (ed)(1979), Critics of Hemy George, New Jersey and London: Associated University Presses.
    Archer, R.W. (1976), ‘The Sydney Betterment Levy, 1969-1973: An Experiment in Functional Funding of Metropolitan Development’, in Urban Issues, 13, pp.339-342.
    Brennan, Frank (1971), Canberra in Crisis, Canberra: Dalton Publishing.
    Brisbane City Council ( 1989), Report of the Committee of Inqui1y into Valuation and Rating, Brisbane.
    Cannon, Michael (1967), The Land Boomers, Melbourne: Melbourne University Press.
    Churchill, Winston ( 1970), The People’s Rights, London: Jonathon Cape.
    Commission of Inquiry into Land Tenures, First Report, (1973), Canberra: Australian Government Publishing Service.
    Day, P.D. (1992), Land Value Capture, Brisbane: Local Government Association of Queensland.
    Day, P.D. (1995), Land: The elusive quest for social justice, taxation reform and a sustainable planetary environment, Brisbane: Australian Academic Press.
    Eckersley, R. (ed)(l999), Measuring Progress, Collingwood: C.S.I.R.O.
    Else-Mitchell, Rae ( 1974 ), Legacies of the Nineteenth Centwy Land Reformers from Melville to George, Brisbane: University of Queensland Press.
    Hill, M. (1999), Churchill: His Radical Decade, London: Othila Press.
    Hutchinson, A.R. (1979), Natural Resources Rental Taxation in Australia, Melbourne: Land Values Research Group.
    Jupp, Kenneth (1997), Stealing Our Land, London: Othila Press
    Reynolds, Herny (1995), The Other Side of the Frontier, Victoria: Penguin Books.
    Roberts, S.H. (1968), History of Australian Land Settlement, Melbourne: Macmillan.
    Sandercock, L. (1975), Cities for Sale, Melbourne: Melbourne University Press.
    Stilwell, Frank (2000), Changing Track: A new political economic direction for Australia, Annandale: Pluto Press.

It has been.

The most famous and complete historical case of pure Georgist policy in action was the German Kiaochow Bay leasehold—modern-day Qingdao, China—from 1898 to 1914. Implemented by the naval administrator Dr. Wilhelm Schrameier, the colony enacted a 6% Land Value Tax (LVT) coupled with a 33% tax on the “unearned increment” (speculative profit) of land sales. Buildings and capital improvements were completely tax-exempt.

The policy achieved extraordinary results before being cut short by World War I (as was the land tax proposed in the 1909 ‘People’s Budget’ in the UK.): –

• Eliminated Speculation: It prevented the land speculation that plagued other colonial trade ports.
• Rapid Development: Private builders quickly constructed high-quality infrastructure because improvements weren’t penalized by taxes.
• Self-Funding State: The land tax fully funded the local government, creating a highly prosperous model city.
• Global Inspiration: The success of Qingdao directly inspired Sun Yat-sen, the founding father of modern China, to incorporate Georgist land-reform principles into his framework for building an independent nation.

Other Georgist” Success Stories

While Kiaochow was the most historically precise case, other economies have achieved significant success using the Georgist framework: –

Singapore: The government owns roughly 90% of the country’s land and leases it out, capturing the economic rent to fund public services and world-class housing initiatives.

Taiwan: Influenced by Sun Yat-sen, Taiwan implemented a dual-tax system in the mid-20th century that taxed land heavily while keeping building taxes low, driving its rapid post-war industrialization and equal wealth distribution.

Politicians are dangerously obsessed with national (public) debt while ignoring the catastrophic reality of escalating private debt. The fundamental differences and dynamics between the two lie in their origins and their impact on economic stability: –

The Core: Land Speculation vs. Public Spending

• Private Debt (The Real Threat): Skyrocketing private debt is not driven by productive investments, but by ever-inflating land prices and real estate speculation. Because Australia’s tax system taxes wages and capital heavily instead of capturing economic rents, money is systematically channelled into land bubbles, creating an unsustainable pyramid of private debt.

• National Debt (The Distraction): Political panic over public spending and the so-called ‘national debt’ from deficit budgets is a distraction. Public debt (borrowing) in a sovereign currency country like Australia is especially manageable once it’s understood to be completely unnecessary.

• Disproportionate Scale

• There’s a massive mismatch in scale between the two, anyway. While governments decry a “fiscal emergency” over public debt (historically at low percentages of GDP), they remain completely silent on the private debt-to-GDP ratios which exceed 150% to 170%, pushing Australia to some of the highest private debt levels in the world. [1]

• Economic Consequences and Systemic Risk

• Private Debt Generates Depressions: Grounded in the 18.6-year property cycle, private debt will eventually outstrip citizens’ productive capacity. When this bubble bursts, the collapse of private credit will trigger severe recessions or depressions. [1]

• National ‘Debt’ is a Symptom: So-called national debt surges after a private debt crisis occurs. When the real estate bubble bursts, the government is forced to step in to bail out failing financial institutions and rescue the collapsing economy.

The Common Sense (Georgist) Solution

Ultimately, if governments abolish taxes on productivity (income and corporate taxes, and taxes on purchases) and instead implement comprehensive taxes on economic rents (to reduce land prices and monopolies), this fosters productivity and curbs speculative activities. It then becomes impossible to reach these toxic levels of private debt and generates economic prosperity.

Such change obviously requires doing now.

We need vimmlbutt urgently!

__oooOooo__

Land value is a progressive and efficient property tax base.