I didn’t really expect this letter to be published in THE AGE last week. It receives most of its advertising revenue from the real estate industry – and investors and the banks wouldn’t be too happy with this observation, either. Oh, well ….

Dear Letters Editor,

On last Wednesday’s 3AW breakfast program with Ross and Russel, an unexpected truth about Australia’s skyrocketing property prices managed to slip through. When Ross Stevenson pointed out that Victoria was the only state with declining real estate prices, it was agreed that Victoria’s higher land tax was the cause. A frustrated landlord called in to confirm this impact of Victoria’s higher land tax.

Australia’s tax system clearly favours property investment over productive activity, heavily taxing sales and earned income while allowing rent-seekers to extract publicly generated land and resource rents with minimal taxation. Perhaps it is time to revisit the Henry Tax Review’s proposal for an all-in land tax (together with the abolition of more than 100 other taxes) if housing is to become more affordable?

Sincerely,

Bryan Kavanagh