There’s profit in ACT’s example
Cameron Murray and Paul Frijters, in their 2017 book Game of Mates: How Favours Bleed the Nation, estimated that the WA Government could have collected $1.6 billion in revenue in 2015 if it had had the same system of selling property rights as the Australian Capital Territory.
Their same calculation, applied Australia-wide, suggested government revenue could have been increased by $11 billion in 2014-2015.
The ACT is the only state or territory with a fair and sensible flow of land value to the Government and thus to the public, including windfall gains from rezoning approvals.
Land in the ACT can only be leased, but this makes no difference in terms of levying a betterment tax on rezoning land.
The ACT Government charges leaseholders a 75% betterment tax for change of land use, which means much of the value of that improvement goes to the Government, estimated at $20million in 2015.
Furthermore, the ACT Government acquires 100% of the increased value of converting rural land to urban, not the property developer, estimated at $163 million net in 2014-2015.
The ACT system inhibits land speculation and land banking, which helps to keep land prices under control.
The 1890 recession in Australia generated a wave of reforms that led to a more equal distribution of wealth.
The impending COVID-led recession presents an appropriate time to reform the flow of value from WA property development land, because under the current system property developers are enriched at the expense of government revenue and the public interest.
– Sandra Boulter, Millers Court, Cottesloe
Cambridge Post, Perth, June 27, 2020, page 12