Former federal and state politician John Brumby had a piece in THE AGE on Tuesday “Australia needs to start making its own luck” warning of ‘dog days’ and Australia heading down ‘the Greek road’. Although Brumby clearly followed the neo-liberal economic textbook, both sides of politics should be prepared to openly address our precarious economic situation – because Australia once did lead the world in political initiative. We should revisit this history in order to help respond to current socio-economic challenges: most particularly, the Progressive Era, 1890 – 1920. [*]
Australia had experienced the 1890s depression generated by the bursting of the 1880s bubble in land prices, and seeking to preclude any repetition, all sides of politics began to see merit in the ideas of the American Henry George who had toured in 1890, addressing large crowds in the eastern states and South Australia. George’s arguments in favour of the ‘single tax’ on land were very fresh in peoples’ minds at federation – and the Commonwealth government introduced a federal land tax in 1910.
Nor were property speculators welcome in Canberra, where a greenfield site was chosen for the new capital in 1908. Its land was to be leasehold only, and the ongoing site rents would help sustain the city.
State and local governments meanwhile continued to construct dams, bridges, highways and streets out of part of the uplift in land values these capital works delivered to all title holders.
But the days when Australia had the best standard of living in the world have long gone. Nothing must now interfere with our speculative real estate proclivities. As our freeways become tollways, we cast about, wondering how we can possibly expand the rail network.
There are extremely good reasons Australia should review its past. Not all old ideas are bad ideas.
[*] The period was notable for its drive against corruption, and supporters of the ideas of Henry George loomed large. Lloyd George’s “Peoples’ Budget” of 1909, which incorporated a land tax, exemplified the times in Britain. Strong mayors in the USA, the likes of Al Smith, Tom L Johnson, Brand Whitlock, Daniel Hoan, Edward Robeson Taylor, “Sunny Jim” Rolph and Hazen Pingree instituted land tax measures to encourage capital works that would resurrect their cities.