[Land-and-Labor] Last fortnight's activities

[Lev Lafayette]

In the past fortnight nearly every single state and federal Labor MP has
been individually contacted regarding the Land and Labor League. A copy
of the email is at the end of this message [1]. 

I am in the process of drafting a similar letter to Labor Party local
councillors concerning the relative efficiency of site-value rating
versus capital-improved.

The last three sessions of Federal Question time have been dominated by
the Resources Super Profits Tax (great principle, terrible name).

Ross Garnaut has come out strongly in favour of the tax. 
http://www.theage.com.au/national/garnaut-blasts-doomsday-claims-on-resource-tax-20100520-vow7.html
http://www.abc.net.au/7.30/content/2010/s2905309.htm

GetUp! is assisting as well: http://keepaustraliastrong.com.au/

Perhaps not surprisingly the superannuation industry agrees with it:
http://www.theaustralian.com.au/business/some-super-benefits-if-we-drop-hysterics-and-get-it-sorted-out/story-e6frg8zx-1225872734209

As do some senior individuals in the mining industy:
http://www.abc.net.au/news/stories/2010/05/07/2893468.htm

And some senior economists have pointed out that the tax is actually a
good thing:

http://www.smh.com.au/business/economists-back-mining-tax-20100526-wbfq.html
http://www.theage.com.au/opinion/politics/lets-mine-bright-ideas-and-stop-being-shrinking-violets-20100525-waw1.html?autostart=1

Their letter is also available here:
http://isocracy.org/files/RSPTletter.pdf

After this announcement, Robb claimed that they weren't opposed to the
tax in principle, but rather the quantity.

http://www.abc.net.au/news/stories/2010/05/26/2909822.htm

This was a fascinating admission of ignorance in economics. Dr. Ken
Henry took the opportunity to give a gentle reminder that this tax is
about economic rent, and the amount could be even higher. Norway, for
example, has an equivalent tax of 95% - without any loss in
productivity.

http://www.theage.com.au/business/henry-cuts-deep-in-mining-critique-20100527-whob.html
http://www.theage.com.au/business/henry-fends-off-most-of-his-critics-20100527-whoj.html

There has been an interesting debate of the relative quantity of tax
paid by mining companies:

http://www.couriermail.com.au/news/treasurer-wayne-swan-comes-out-swinging-against-rio-tinto-and-bhp-billiton-on-super-profits-tax-after-henry-review/story-e6freon6-1225870160575
http://www.theaustralian.com.au/news/miners-arent-pulling-their-weight-gillard/story-e6frg6n6-1225870138175

There is a good article from Andrew Leigh, Labor candidate for the
Federal seat of Fraser here:

http://alp.org.au/20-economists-support-resource-rent-tax

Finally, check out the image from the Henry Report on the efficiency of
various taxes. See the deadweight loss of the one at the top? That's the
current method. See the really efficient one at the bottom? That's the
proposed method. There is no good economic argument against this tax.

http://taxreview.treasury.gov.au/content/html/publications/papers/Final_Report_Part_1/image/01_Part_1-6.gif


We're winning this campaign people! Keep up the good work,



Lev





[1] Land and Labor Invitation


The land and all its resources are the collective property of the
people. This was a founding principle of the Labor Party, employed by
Andrew Fisher with the establishment of the Commonwealth Land Tax in
1910, and embodied in Labor's Platform for sixty years until it was
erroneously omitted in the 1961 conference (or possibly, according to
Clyde Cameron, by stealth). 

Economists have not forgotten how a country can increase productivity,
reduce poverty, protect the environment and provide a fair and efficient
source of public revenue; by drawing rents from the resources we use,
rather than taxing the goods and services working people provide.

This wisdom is found in the Henry Review on taxation. The proposal of a
special resource rent on excessive profits by mining companies is a
reminder to those companies that the minerals beneath the soil are ours.
Those companies have been granted the privilege and opportunity to
extract them and retain some - but not all - of their value as reward
for their investment. 

It is imperative that Labor stands firm against these would-be
monopolists. 

The Henry Review also called for the abolition of State stamp duties and
their replacement by a Federal land tax. Stamp duties increase the cost
of housing to families, and reduce demand in housing sales. Whilst part
of what would be the consumer and producer surplus is converted into
government revenue, there is also deadweight loss in addition to
whatever administration is required.

A Federal land tax however would attract no deadweight loss.
Administrative costs are minimal. The desire to hold land for
speculative purposes would be reduced. Home ownership would be cheaper,
and housing would be of a higher quality.

When the Menzies government abolished the Commonwealth Land Tax, federal
opposition leader Calwell, swore that it would be returned.

"We of the Australian Labor Party have always believed that the land is
the patrimony of the people and that nobody has a complete and absolute
title to it. ...The land belongs to the people ... We have always
believed in the land tax, and when happy days come again we shall
restore the measure imposing the tax to the statute book of this
country."

Labor should also support the re-establishment of a Commonwealth Land
Tax. It was part of our Platform for over sixty years. It was the public
revenue policy of Fisher, of Calwell, of Cameron. And now the Secretary
of the Department of Treasury is providing us the opportunity to
re-implement this noble policy - but the Federal government is dragging
its feet.

What can be done about the Labor government's refusal to implement a
Federal land tax? Firstly, an organisation called Prosper Australia has
established a petition calling for a review on the effect of land prices
on home ownership and the ability and effects of the establishment of a
Federal Land tax - even if you don't agree with the proposal to
establish such a public finance policy, surely a review is worthwhile.
Secondly a mailing list and lobby group entitled "Land and Labor" has
been established with the express purpose to reintroduce the Party's old
commitment for the socialisation of land values for the public benefit
and to defend the Labor government against the campaign of the mining
companies which will come.

I urge you to sign the petition and join "Land and Labor"

The petition is here:

http://petition.prosper.org.au/

Land and Labor mailing list is here:

http://isocracy.org/mailman/listinfo/land-and-labor_isocracy.org

Yours sincerely,



Lev Lafayette