OK, great, Wayne Swan and Co., the March quarter GDP increase of 1.3% gives us a surprisingly good 4.3% annualised growth rate.

But much of the 0.8% increase in private investment was predictably in mining, and you’d have to admit the 0.9% growth in household consumption, largely on food and transport, isn’t all that jolly?

I’m still hearing that one-third of over 50s can’t afford to repair their homes.

I’m still hearing building construction continues its decline.

I’m still hearing jobs are also being lost in other trades, manufacturing and service areas.

I’m still hearing retailers are doing it hard.

I’m still hearing people are struggling to pay the mortgage, because the banks gouged them by refusing to drop their lending margins during the residential property bubble.

I’m still hearing we tax labour and capital for daring to earn an income.

I’m still hearing we continue to reward people with negative gearing for speculating in real estate (even as property prices begin to decline!)

I’m still hearing–with the exception of a watered-down mining tax–you’re still refusing to implement the recommendations of The Henry Tax Review to reinvigorate economy.

And I know we still have to face and deal with the $805 billion in our real estate bubble.

Me, unfortunately I remain one of your “doomsayers”, Mr Swan!

A most insightful piece from Philip Soos in The Conversation.

Reformed land taxes along the lines recommended by The Henry Tax Review would address this stealing of our public land rent quite nicely.

TV regularly exposes the crooked scams worked on Centrelink welfare payments. Being taxpayers, most people are happy to see the perpetrators brought to justice.

I was happy then to have been asked to speak at Sharon Firebrace’s novelly named “War On Corporate Welfare” at the Darebin Intercultural Centre yesterday.

Why hasn’t the theft of $500 billion in publicly-generated land and resource rents—some 40% of Australia’s GDP (certainly not the 1% claimed in economics’ textbooks!)—ever rated a mention on TV, I wondered? After all, it’s the issue that’s currently brought the financial world to its knees.

I suggested to the audience that if economists understood The Theory of Valuation—amongst other things, that the value of land is the capitalisation of its privatised rent—they’d know a vacant parcel with a net annual value of $16,000, when yields are showing 4% net, will sell on the market for $400,000 (i.e. $16,000 pa x 100/4).

On the other hand, if the government were to abolish the 125 damaging taxes recommended by the Henry Tax Review and capture back half the $16,000 rental value community and local infrastructure and services contribute, the same piece of land would sell for only $200,000 – all other things being equal. (i.e. $8,000 pa x 100/4).

Yes, supply and demand and zoning are relevant, but very secondary, considerations to the extent of privatised rent a site yields.  Why do we allow this public rent to be privatised?

We’ve obviously ignored, at a great cost to society, that the rental value of land and resources is owed back, equally, to all of us, I suggested. There’s a vast fraud involved here.

In the early days, we used to capture our rents. Not now. There’s only part of municipal revenue and some state land taxes left. The rent-seekers have done well for themselves gradually removing land-based revenues by making the exception the rule: “What about the poor widow?”  [Her payments can be deferred til she dies; alternatively, she can pay her land rent out of her universal basic income!]

Society has gone backwards by choosing to ignore the truism that the rent of land and natural resources is sufficient to replace all taxation in Australia and still deliver a universal basic income to every citizen.

So now, we are taxed on our earnings and our productivity, and, as economies grind to a halt, the big corporate fraudsters, property speculators, mining magnates and banks continue to steal and grow fat upon our publicly-generated land rents: I repeat, $500 billion annually. Most of the big corporates get a big slice of this rent.  Once we used to own our natural rent-bearing monopolies, our power, gas, telephony, highways, airports, etc.  Not now.  We’ve sold them off, handing this largesse to private companies.

Incredibly, 3AW’s Neil Mitchell, the IPA, the Liberal Party and The Daily Reckoning can’t see anything at all wrong with Gina Rinehart and Clive Palmer keeping these ‘super profits’ that are our rents.

Belatedly, the Labor Party is now beginning to.

And so can I – it’s called theft, guys, and it amounts to a crime against humanity!

THE AGE today has a nice obit to friend, educator, noted jazz musician and former president of Prosper Australia, Maurie Fabrikant.

You must be mad!  Don’t you realise most people own their own homes these days?  That means they’d all have to pay the site rent on their land, too – along with all the big boys who have many valuable properties, and the mining billionaires, spectrum licensees, etc.

Nobody’s going to want to do that, even if not doing it did create financial collapse in the US and Europe – even if it is about to do the same in Australia.

It’s far better to have economic depression here than expect landowners to pay an all-in land tax as advocated by The Henry Tax Review – on top of their municipal rates, BTW!  …. even if the 100+ taxes Ken Henry wanted abolished were abolished.

What are you coming at?

Even if it could self-fund new infrastructure …. even if it was able to fund hospitals and education much better than damaging taxes do …. even if it could pay for a universal basic income for every Australian ….

It’s just not on.

Even if taxation does add to prices by cascading its deadweight right throughout the economy …. even if it did mean wage earners and businesses could keep all they earned …. even if it did mean we’d never experience another recession …. even if it is cheap and easy to collect because land can’t flee the country …. and even if a current site value has been put on every block of land in Australia…. even ….

Um …. Where do I sign up?

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HERE <–

NOTHING AT ALL TO DO WITH ALLOWING BILLIONAIRE MINERS TO CAPTURE THE PUBLIC’S RENTS, OF COURSE!   🙂

<–  UNLIKE THIS ONE!

Taxation develops land price bubbles.

Public capture of economic rent curbs land price bubbles.

Therefore, replace taxation with public capture of economic rent to curb land price bubbles.

____________

Taxation and bubble-inflated mortgages create unsustainable debt.

Public capture of economic rent does not create unsustainable debt.

Therefore, replace taxation with public capture of economic rent.

____________

Taxation is theft from the earned incomes of labour and capital.

Capture of publicly-generated economic rent is not theft from earned incomes.

Therefore, replace taxation with public capture of economic rent.

_____________

Taxation, land price bubbles and unsustainable debt have created this economic depression.

Public capture of land and resource rents can abolish taxation, land price bubbles and debt.

Therefore, public capture of land and resource rents can remedy this depression.

______________

Rentiers privatise publicly-generated economic rent.

Privatised economic rent is capitalised into land and resource price bubbles.

Therefore, do not permit publicly-generated economic rent to be privatised by rentiers.

______________

Rentiers are rich and powerful.

Politicians kowtow to the rich and powerful.

Therefore, politicians will not put an end to economic rent being privatised – nor to this economic depression.

______________

If you jump off the top of a tall building, you’ll go splat at the bottom: that’s simple physics.

We are told economic laws are not as certain as those of physics, but this isn’t so.

It’s not coincidental that none of those heterodox people who forecast the world financial collapse treat land simply as another form of capital, as does today’s orthodox economist.

Many of them understood that land price is a pathology. Others, such as Robert Shiller and Joseph Stiglitz, knew that when land prices are permitted to develop into a bubble this is certainly a most unhealthy phenomenon.

Not so witless orthodox economists.

They still believe land price is simply a function of supply and demand, and don’t regard the private capture of more and more land rent as socially devastating.

They don’t see banks as privatisers of capitalised land rents.

Therefore orthodox-trained RBA, APRA and ASIC and Productivity Commission economists were not to be found amongst those who foresaw the financial bust.

You might say they failed their appointed task.

Why, then, are these people putting their hands out for a pay packet, let alone still being permitted to oversee finance and productivity?

They’ve failed us.

Speaking of Earthsharing Canada’s Frank de Jong, as we were in the last post, here Frank introduces the concept of ‘economic rent’ to Hugh Reilly and Erin Ademoglu on That Channel’s “Liquid Lunch” program.

You’re a pretty decent pedagogue, Frank!

And, as Macrobusiness suggests today, it’s so much easier to leech off economic rents than to create extra real wealth.