All posts by Bryan Kavanagh

I'm a real estate valuer who worked in the Australian Taxation Office (ATO) and Commonwealth Bank of Australia (CBA) before co-founding Westlink Consulting, a real estate valuation practice. I discovered, by leaving publicly-generated land rents to be privately capitalised by banks and individuals into escalating land price bubbles, this generates repetitive recessions and financial depressions. We need a tax-switch: from wages, profits and commodities onto economic rents/unearned incomes, if we are to create prosperity and minimise excessive private debt.

Guess where urgers and touts ended up?

Once upon a time, when Australians called a spade a spade, we’d call spivs on the racecourse ‘urgers’ and ‘touts’.

But dress them up these days in a suit and they’ve magically become ‘financial analysts’ to entrap people into the overdone real estate market as it trembles on the brink atop a 12 year-old bubble.

And, of course, an urger or tout labels anyone suggesting Australian real estate has been done to a crisp ‘a doomsayer’.  [SIGH!]

Case # 1: Christopher Joye

Case # 2: Michael Pascoe

There are many more such persons, of course, but please, no more urging and touting, guys.  This is serious!


I’ve mentioned before (including here and here) the cry “Overpopulation!” amounts to a diversion, fostered by the 1% and their unwitting pawns, a detour away from reforming a terribly flawed distributional system which channels the land and resource rents of the people to the uber wealthy.

David Brooks takes a look at the new Malthusians in this new PDF –  FE People-2012.

A chapter in Michael Hudson’s “Super Imperialism” also takes the World Bank’s neo-Malthusianism to task.

Zeepoppers are misguided.  Malthusianism is knee-jerk, and doesn’t the 1% love it? 😉



Well now, so the World Bank and IMF believe the financial crisis is going to get worse? OK, c’mon now, who let the cat out of the bag? I mean, those people aint the sharpest tools in the workshop–they didn’t even see this crash on the horizon–and couldn’t possibly have figured out things are going to get worse all by themselves.

Yes, World Bank and IMF, it is going to get much worse. And the only thing, the only thing, the ONLY thing that will ameliorate it is abolishing taxes and governments capturing economic rents instead.

You are reading the situation several years too late, World Bank, IMF – get with the (economic rent) program, or you’ll be partly responsible for it getting worse! Have you noticed even Italy appears to have discovered the annual value of its electromagnetic spectra, guys?

I enjoyed this ABC interview between Tony Eastly and Michael Janda about the IMF now reducing its forecasts.



On this day, a federal holiday in the United States honoring the Reverend Martin Luther King, Jr., Democracy Now! presents two powerful speeches of Dr. King:

His “Beyond Vietnam” speech, which he delivered at New York’s Riverside Church on April 4, 1967, as well as his last speech, “I Have Been to the Mountain Top,” that he gave on April 3, 1968, the night before he was assassinated.  Watch/Listen/Read here.

Some quotes:

“We are on the wrong side, of the wealthy and the secure, not the poor.”

“These are the times for real choices, and not false ones.”

“Our nation is on the wrong side of a world revolution.”

And the JFK quote from five years before Dr. King gave his Beyond Vietnam speech:

“Those who make peaceful revolution impossible will make violent revolution inevitable.”

I highly recommend you watch, listen, read the transcript of Dr. King’s speeches.

King’s words resonate as strongly with us now as they did those several decades ago. As economic inequality increases in our country and throughout the world, we still seek to install that deeper justice that King stood for. Here are two of his quotes from our Land Rights course website. I strongly urge you to complete the course at because it is a program detailing deep economics of peace and justice.

More quotes from King:

“I am sure that each of you would want to go beyond the superficial social analyst who looks merely at effects and does not grapple with underlying causes. True compassion is more than flinging a coin to a beggar; it understands that an edifice which produces beggars needs restructuring.” – Letter from Birmingham City Jail

“An intelligent approach to the problems of poverty and racism will cause us to see the words of the Psalmist – The earth is the Lord’s and the fullness thereof – are still a judgment upon our use and abuse of the wealth and resources with which we have been endowed.” – A Testament of
Hope: The Essential Speeches and Writings of Martin Luther King Jr.PP 629-630.

Lastly, this relevant article from the New York Times, January 15, 2012

By Paul Krugman

“I have a dream,” declared Martin Luther King, in a speech that has lost none of its power to inspire. And some of that dream has come true.
When King spoke in the summer of 1963, America was a nation that denied basic rights to millions of its citizens, simply because their skin was the wrong color. Today racism is no longer embedded in law. And while it has by no means been banished from the hearts of men, its grip is far weaker than once it was.

To say the obvious: to look at a photo of President Obama with his cabinet is to see a degree of racial openness — and openness to women, too — that would have seemed almost inconceivable in 1963. When we observe Martin Luther King’s Birthday, we have something very real to celebrate: the civil rights movement was one of America’s finest hours, and it made us a nation truer to its own ideals.

Yet if King could see America now, I believe that he would be disappointed, and feel that his work was nowhere near done. He dreamed of a nation in which his children “will not be judged by the color of their skin but by the content of their character.” But what we actually became is a nation that judges people not by the color of their skin — or at least not as much as in the past — but by the size of their paychecks.
And in America, more than in most other wealthy nations, the size of your paycheck is strongly correlated with the size of your father’s paycheck.

Goodbye Jim Crow, hello class system.

Economic inequality isn’t inherently a racial issue, and rising inequality would be disturbing even if there weren’t a racial dimension.
But American society being what it is, there are racial implications to the way our incomes have been pulling apart. And in any case, King — who was campaigning for higher wages when he was assassinated — would surely have considered soaring inequality an evil to be opposed.

So, about that racial dimension: In the 1960s it was widely assumed that ending overt discrimination would improve the economic as well as legal status of minority groups. And at first this seemed to be happening. Over the course of the 1960s and 1970s substantial numbers of black families moved into the middle class, and even into the upper middle class; the percentage of black households in the top 20 percent of the income distribution nearly doubled.

But around 1980 the relative economic position of blacks in America stopped improving. Why? An important part of the answer, surely, is that circa 1980 income disparities in the United States began to widen dramatically, turning us into a society more unequal than at any time since the 1920s.

Think of the income distribution as a ladder, with different people on different rungs. Starting around 1980, the rungs began moving ever farther apart, adversely affecting black economic progress in two ways. First, because many blacks were still on the lower rungs, they were left behind as income at the top of the ladder soared while income near the bottom stagnated. Second, as the rungs moved farther apart, the ladder became harder to climb.

The Times recently reported on a well-established finding that still surprises many Americans when they hear about it: although we still see ourselves as the land of opportunity, we actually have less intergenerational economic mobility than other advanced nations. That is, the chances that someone born into a low-income family will end up with high income, or vice versa, are significantly lower here than in Canada or Europe.

And there’s every reason to believe that our low economic mobility has a lot to do with our high level of income inequality.

Last week Alan Krueger, chairman of the president’s Council of Economic Advisers, gave an important speech about income inequality, presenting a relationship he dubbed the “Great Gatsby Curve.” Highly unequal countries, he showed, have low mobility: the more unequal a society is, the greater the extent to which an individual’s economic status is determined by his or her parents’ status. And as Mr. Krueger pointed out, this relationship suggests that America in the year 2035 will have even less mobility than it has now, that it will be a place in which the economic prospects of children largely reflect the class into which they were born.

That is not a development we should meekly accept.

Mitt Romney says that we should discuss income inequality, if at all, only in “quiet rooms.” There was a time when people said the same thing about racial inequality. Luckily, however, there were people like Martin Luther King who refused to stay quiet. And we should follow their example today. For the fact is that rising inequality threatens to make America a different and worse place — and we need to reverse that trend to preserve both our values and our dreams.


Financial Times (UK)

February 20 2004


By Martin Wolf

Roads are made, streets are made, services are improved, electriclight turns night into day, water is brought from reservoirs a  hundred miles off in the mountains – and all the while the landlord sits still….To not one of those improvements does the land monopolist, as a land monopolist, contribute…. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.”

Thus did Winston Churchill explain, in 1909, the morality and the efficiency of taxing land (or pure location), rather than development.

It is moral because owners, as owners (rather than managers or developers), contribute nothing to land’s value. It is efficient, because taxing land distorts nobody’s choices. On the contrary, a tax on site values encourages owners to use what they own more efficiently.

Always desirable, a land value tax is now an idea whose time has come.

As John Muellbauer of the University of Oxford notes, a tax on site values has the following hugely desirable features in contemporary Britain: it offers a tax base that cannot run away, unlike capital or labour; it encourages desired development; it imposes the greatest cost of holding undeveloped land where prices, and so values in alternative uses, are highest; it captures for the public purse a part of the benefits accruing to landowners from investments in infrastructure and other amenities by the public sector; and it makes user costs of ownership of land positive more often, improving the country’s allocation of resources.

The last of these points needs elaboration. If expected capital gains on land are large, because prices are forecast to continue to rise at a rapid rate, the user cost of holding the property becomes negative. The reverse is true where house prices are falling. This makes the cost of land (and so of the housing built on it) lower where prices rise faster and vice versa. This reinforces the movement of economic activity and people towards the most dynamic regions from the least dynamic ones. A national land tax would partially offset this perverse operation of the price mechanism.

Uniform site – or land – value taxation is a “no-brainer”. But what makes it particularly attractive today is its superiority to other taxes now imposed on property.

The council tax and the uniform business rate are imposed on land that is both occupied and developed. These taxes encourage dereliction and discourage development. Council tax has the additional disadvantage of being imposed at higher rates on the cheaper properties in poorer places, thereby reinforcing the perverse regional effects of differential user costs of housing. Again, stamp duty, now at the steep level of 4 per cent on properties worth more than £500,000, is a tax on transactions. But why would anyone wish to lower mobility and reduce liquidity in this way?

What the UK needs, then, is a national tax on the value of land holdings. As is pointed out in the interim report on housing supply by Kate Barker of the Bank of England’s monetary policy committee, discussed here a fortnight ago, Denmark does already imposes just such a tax.

If, as seems plausible, the country should move in this direction only cautiously, the obvious place to start is with the uniform business rate. Prof Muellbauer suggests we could reform the business rate by halving the rate and replacing the lost part with a land value element.

A floor value might be set at, say, £10,000 a hectare, which would exempt most farmland. He also suggests that a tax below 1 per cent a year would be sufficient.

What are the objections to such a modest reform? One would be that it is hard to value the land component in property values. But insurance valuations might be used to place a value on structures, in which case land value is simply total value less the value of the structures on it. Another objection is that such a tax would impose cash costs on people with no incomes. A possibility here, also applicable to current discussions of reform of council tax, is to roll up tax and recoup it when the asset is sold, developed or bequeathed.

In the long run, a national land value tax, at a uniform rate, seems at least a partial substitute for council tax as well. But that would reduce local autonomy and further weaken the incentive for local authorities to promote development. I intend to turn to these topics – local fiscal autonomy, planning and infrastructure provision – in a future column. For the moment, however, the big point is that the taxation of property is a mess. This is one reason the housing market and regional policy work so poorly.

National land-value taxation is a part of the solution. It is both fair and efficient. It should be adopted.