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Transcript
Have we been
here before?
Bryan Kavanagh
Land Values Research Group
Total Real Estate Sale Prices:
Five Major Australian States
80
New South
Wales
60
Queensland
Victoria
billion dollars
40
Western
Australia
20
South
Australia
0
1986 87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04 2005
Source: State government departments
Total Real Estate Sale Prices:
Tasmania, NT and the ACT
4
ACT
Tas
3
billion dollars
2
NT
1
0
1986 87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04 2005
Source: State & Territories
Total Australian real estate sale
prices (at current prices)
2004
$245.04 bn
bn
250
200
150
Increased 3 times
since 1996
1989
$87.7 bn
100
1981
$26.90 bn
1973
$10.65 bn
50
1996
$75.52 bn
0
72
74
76
78
80
82
84
86
88
90
92
94
96
98
'00
'02
'05
Total Australian real estate sale
prices (in 2005$ bn)
2004
$251.1
1989
$140.6
1973
$77.501
72
74
76
78
80
82
84
86
88
90
92
94
96
98
'00
'02
'05
Total number of Australian
real estate sales
2003
766934
thousands
750
1988
694106
1973
651588
650
1976
501997
550
1981
556352
1983
483399
450
1974
406643
74
76
1986
508473
1990
486812
long increase
from 1996
interrupted
only in 2004
1996
475898
1978
382808
350
1972
1994
579678
1984
579145
78
80
82
84
86
88
90
92
94
96
98
'00
'02
'04
The Economy’s Barometer
total real estate sales prices divided by GDP
%
30
25
20
15
10
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
30
25
1973
comm/ind
peak
20
15
10
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
30
25
1973
comm/ind
peak
20
15
10
1974-'75
recession.
Whitlam
government
dismissed
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
30
25
1973
comm/ind
peak
1981
residential
peak
20
15
10
1974-'75
recession.
Whitlam
government
dismissed
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
30
25
1973
comm/ind
peak
1981
residential
peak
20
15
10
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
1988/89
comm/ind
peak
30
25
1973
comm/ind
peak
1981
residential
peak
20
15
10
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
1988/89
comm/ind
peak
30
25
1973
comm/ind
peak
1981
residential
peak
20
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
1988/89
comm/ind
peak
30
25
1973
comm/ind
peak
Queensland boom,
and end of distress
sales from late 1980s
boom in other States
1981
residential
peak
20
*
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
1988/89
comm/ind
peak
30
25
1973
comm/ind
peak
Queensland boom,
and end of distress
sales from late 1980s
boom in other States
1981
residential
peak
20
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
Keating federal
& Goss Q’land
governments
defeated in 1996.
Queensland
recession only
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
1988/89
comm/ind
peak
30
25
2004
residential
peak
1973
comm/ind
peak
Queensland boom,
and end of distress
sales from late 1980s
boom in other States
1981
residential
peak
20
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
Keating federal
& Goss Q’land
governments
defeated in 1996.
Queensland
recession only
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
1988/89
comm/ind
peak
30
25
2004
residential
peak
1973
comm/ind
peak
Queensland boom,
and end of distress
sales from late 1980s
boom in other States
1981
residential
peak
20
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
Keating federal
& Goss Q’land
governments
defeated in 1996.
Queensland
recession only
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
Let’s define a bubble ...
%
1988/89
comm/ind
peak
30
25
2004
residential
peak
1973
comm/ind
peak
Queensland boom,
and end of distress
sales from late 1980s
boom in other States
1981
residential
peak
20
19%
'bubble' line
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
Keating federal
& Goss Q’land
governments
defeated in 1996.
Queensland
recession only
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
1988/89
comm/ind
peak
30
25
2004
residential
peak
1973
comm/ind
peak
Queensland boom,
and end of distress
sales from late 1980s
boom in other States
1981
residential
peak
20
19%
'bubble' line
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
Keating federal
& Goss Q’land
governments
defeated in 1996.
Queensland
recession only
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
1988/89
comm/ind
peak
30
25
2004
residential
peak
1973
comm/ind
peak
Queensland boom,
and end of distress
sales from late 1980s
boom in other States
1981
residential
peak
20
19%
'bubble' line
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
Keating federal
& Goss Q’land
governments
defeated in 1996.
Queensland
recession only
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
The Economy’s Barometer
total real estate sales prices divided by GDP
%
1988/89
comm/ind
peak
30
25
2004
residential
peak
1973
comm/ind
peak
Queensland boom,
and end of distress
sales from late 1980s
boom in other States
1981
residential
peak
20
19%
'bubble' line
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
Keating federal
& Goss Q’land
governments
defeated in 1996.
Queensland
recession only
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
Stock markets don’t drive economies ....
GDP 1.25
ASX
2
1.20
1.8
1.6
1.15
ASX growth
1.4
1.10
1.2
1
1.05
GDP growth
0.8
0.6
1.00
86
88
90
92
94
96
98
'00
'02
'04
... real estate markets do
1.25
1.7
real estate sales
growth
1.5
1.20
1.3
1.15
1.1
1.10
0.9
1.05
GDP growth
0.7
1.00
1972
74
76
78
80
82
84
86
88
90
92
94
96
98
'00
'02
'04
The economy’s barometer
%
GDP growth
%
30
25
25
20
20
15
15
10
10
5
5
0
1972
0
1982
1992
2002
The economy’s barometer
%
GDP growth
%
30
25
25
20
20
15
15
10
10
5
5
0
1972
0
1982
1992
2002
Land value/GDP: Australia
2.5
2
Australia’s population increased 1.36 times
(from 15.0 million to 20.4 million) over the period 1984 to 2004
Real GDP increased 1.86 times
Real land values increased 3.2 times
1.5
1
0.5
0
1911
1924
1932
1944
1953
1972 1976
1989
2004
From Terry Dwyer’s The Taxable Capacity of Australian Land and Resources
Australian Tax Forum, Vol 18 No. 1, 2003
The charter of the Reserve Bank
of Australia is to ensure ...
 (a) ... the stability of the Australian currency;
 (b) ...the maintenance of full employment in Australia; and
 (c) ...the economic prosperity and welfare of Australians
 It breaches its charter each time it permits a bubble, such
as the recent housing bubble, to develop
At a recent RBA meeting ...
So our barometer
is indicating that
“Mr Housing
Bubble” is
about to mock
the RBA once
again
If cartoonists can joke about it ....
If cartoonists can joke about it ....
... Can’t the RBA or APRA fix it?
If cartoonists can joke about it ....
... Can’t the RBA or APRA fix it?
APPARENTLY NOT!
Modern economists have been reduced to
playing a placatory role ....
Neo-classical economics a scandal?
Neo-classical economics a scandal?
Neo-classical economics a scandal?
 "Land-based revenue systems are inappropriate because we
are no longer agricultural economies”
 There is a general ignorance of the dynamics between the
annual value of land and the economy - and the amount of
economic rent is usually grossly understated, eg. ...
 “Henry George’s ...theory still has it adherents, likeable and
mainly older people who overlook the fact that land rent
forms such a small percentage of national income: that 2% is
nothing compared to the present tax percentages, which are
around 30.” - Jan Pen (Groningen Uni) in Income Distribution
The heartening story of growth of
publicly-created resource rents ....
100%
9%
Resource rents
31%
80%
60%
40%
32%
85%
20%
Based upon Dr Terry Dwyer,The Taxable Capacity of Australian Land and Resources
in Australian Tax Forum, Vol 18 No. 1, 2003
0%
1911
1924
1934
1944
1954
1964
1974
1984
1994
2004
... degenerated into the privatisation of rents
and the levying of taxes to such an extent ...
100%
9%
Resource rents
6%
31%
80%
taxes
60%
40%
31%
85%
20%
Based upon Dr Terry Dwyer,The Taxable Capacity of Australian Land and Resources
in Australian Tax Forum, Vol 18 No. 1, 2003
0%
1911
1924
1934
1944
1954
1964
1974
1984
1994
2004
... that the legacy is a sad tale of declining
after-tax incomes
100%
9%
Resource rents
6%
31%
80%
taxes
60%
40%
31%
85%
NET Incomes OF
Labour & Capital
20%
38%
Based upon Dr Terry Dwyer,The Taxable Capacity of Australian Land and Resources
in Australian Tax Forum, Vol 18 No. 1, 2003
0%
1911
1924
1934
1944
1954
1964
1974
1984
1994
2004
How we distribute the GDP ‘pie’ now
 Less than $30 billion (12%) of Australia's publicly-created $245 billion in
resource rents was collected to the public purse in 2004
 99.9% of those in BRW’s “Richest 200” list are rentiers
 As rentiers and homeowners were allowed to privatise $215 billion in
publicly-created resource rents, it was necessary to tax incomes and goods
and services to that extent
 Consequently, household debt has risen from $289bn in 1996 to $818bn in
2004 ($41,000 for every man woman and child)
 The bottom line is that as a proportion of GDP since 1972:
 net incomes have declined by 40%
 taxes have grown by 28%
 annual land values (resource rents) have grown by 150%!
Land-based revenues cannot be
passed on in prices?
“Pure rent is in the nature of a ‘surplus’ which can be taxed
without affecting production incentives”
- Samuelson Hancock and Wallace, Economics, 2nd Australian ed., p. 623
Land-based revenues cannot be
passed on in prices
 The case of the Poor Widow is always trotted out when
increased land value charges are proposed
 Even when she’s a pensioner, the “Poor Widow” pays for
food, clothing and shelter, much of the price of which is
the accumulation of cascading taxes
 She would be greatly advantaged by substantially cheaper
prices under a land value charge, provided other taxes are
reduced accordingly
 Any landholders with real payment problems, can defer the
charge against their estate
“As is”
Tax
31.0
%
Rent
31.0%
Net incomes (L&C)
38.0%
If we captured land values
Rent
31.0%
Net incomes (L&C)
69.0%
The Australian GDP pie since 1972....
100%
12%
Resource rents
31%
$250 bn
80%
25%
taxes
60%
31%
$250 bn
40%
63%
38%
of $811 bn
or
$308 bn
NET Incomes OF
Labour & Capital
20%
0%
1974
1984
1994
2004
.... could have looked like this had we taken more
resource rents to eliminate real estate bubbles
100%
12%
80%
12.5%
$250 bn
Resource rents
12.5%
$250 bn
15%
taxes
60%
40%
75%
of $2000 bn
or
$1500 bn
NET Incomes OF
Labour & Capital
73%
20%
0%
1974
1984
1994
2004
Australia’s actual and ‘repaired’ GDP
$2005 million
2500
$2050
2000
Effect of doubling charges on land in the early 1970s
and then graduating land value
capture up to 50% in 2004
1500
1000
$830
actual
500
$302
$302
0
1972
1982
1992
2002
GDP growth (current prices): Australia
%
25
1975
20
15
growth off
low base
10
5
0
1952
1962
1972
1982
1992
2002
GDP growth (current prices): Australia
%
25
1975
20
15
“Property taxes are
out of control !”
growth off
low base
10
5
0
1952
1962
1972
1982
1992
2002
GDP growth (current prices): Australia
%
25
1975
20
15
growth off
low base
10
5
0
1952
1962
1972
1982
1992
2002
GDP growth (current prices): Australia
%
25
1975
20
15
growth off
low base
10
5
0
1952
1962
1972
1982
1992
2002
GDP growth (current prices): USA
%
16
14
growth off
low base
1978
12
10
8
6
4
2
0
1952
1962
1972
1982
1992
2002
GDP growth (current prices): USA
%
16
14
growth off
low base
“Property taxes are
out of control !”
1978
12
10
8
6
4
2
0
1952
1962
1972
1982
1992
2002
GDP growth (current prices): USA
%
16
14
growth off
low base
1978
12
10
8
6
4
2
0
1952
1962
1972
1982
1992
2002
GDP growth (current prices): USA
%
16
14
growth off
low base
1978
12
10
8
6
4
2
0
1952
1962
1972
1982
1992
2002
GDP growth (current prices): UK
%
30
1975
25
20
15
growth off
low base
10
5
0
1952
1962
1972
1982
1992
2000
GDP growth (current prices): UK
%
30
“Property taxes are
out of control !”
1975
25
20
15
growth off
low base
10
5
0
1952
1962
1972
1982
1992
2000
GDP growth (current prices): UK
%
30
1975
25
20
15
growth off
low base
10
5
0
1952
1962
1972
1982
1992
2000
GDP growth (current prices): UK
%
30
1975
25
20
15
growth off
low base
10
5
0
1952
1962
1972
1982
1992
2000
State of the Market:
have we been here before?
%
1988/89
comm/ind
peak
30
25
2004
residential
peak
1973
comm/ind
peak
Queensland boom,
and end of distress
sales from late 1980s
boom in other States
1981
residential
peak
20
19%
'bubble' line
15
10
'91-92 recession.
Hewson-led
opposition loses
'unloseable'
1993 election
1982-'83
recession.
Fraser
government
defeated
1974-'75
recession.
Whitlam
government
dismissed
Keating federal
& Goss Q’land
governments
defeated in 1996.
Queensland
recession only
5
0
1972
75
77
79
81
83
85
87
89
91
93
95
97
99
'01
'03
'05
Have we shattered some shibboleths?
Have we shattered some shibboleths?
Repetitive cycles of boom and bust are NOT natural
Land values DO constitute an adequate revenue base
High taxation and land prices are NOT inevitable
A revenue switch to resource rents WILL create
sustainable economic growth
 The poor widow will NOT lose out if we capture land values
 There IS a natural growth fund we can tap for the provision
of quality public education, health and infrastructure
 Untaxing labour and its products and capturing more land value
FREES labour and CONSERVES the environment




State of the
Market
Have we been
here before?
Bryan Kavanagh
Land Values Research Group
State of the
Market
Have we been
here before?
Bryan Kavanagh
Land Values Research Group
State of the
Market
Have we been
here before?
Bryan Kavanagh
Land Values Research Group
In the 1845 parliamentary Corn Law debates,
Richard Cobden (1804-1865) noted how the people
had been “cheated, robbed and bamboozled”:
“ or a period of 150 years after the conquest, the whole of the revenue of the
F
country was derived from the land. During the next 150 years it yielded 19/20ths of
the revenue. For the next century, down to the reign of Richard III it was 9/10ths.
During the next 70 years to the time of Mary it fell to about 3/4ths. From this
time, to the end of the Commonwealth, land appeared to have yielded one half the
revenue. Down to the reign of Anne it was 1/4th. In her reign it was 1/6th. For the
first 30 years of the reign of George III the land yielded 1/7th of the revenue.
From 1793 to 1816 (during the period of the land tax) land contributed 1/9th. From
which time to the present 1/25th only of the revenue had been derived directly from
the land.“
In the 1845 parliamentary Corn Law debates,
Richard Cobden (1804-1865) noted how the people
had been “cheated, robbed and bamboozled”:
“ or a period of 150 years after the conquest, the whole of the revenue of the
F
country was derived from the land. During the next 150 years it yielded 19/20ths of
the revenue. For the next century, down to the reign of Richard III it was 9/10ths.
During the next 70 years to the time of Mary it fell to about 3/4ths. From this
time, to the end of the Commonwealth, land appeared to have yielded one half the
revenue. Down to the reign of Anne it was 1/4th. In her reign it was 1/6th. For the
first 30 years of the reign of George III the land yielded 1/7th of the revenue.
From 1793 to 1816 (during the period of the land tax) land contributed 1/9th. From
which time to the present 1/25th only of the revenue had been derived directly from
the land.
Thus the land, which anciently paid the whole of taxation, paid now only a fraction ...
notwithstanding the immense increase that had taken place in the value of rentals.
The people had fared better under despotic monarchs than when the power of the
State had fallen into the hands of a landed oligarchy, who had first exempted
themselves from taxation, and next claimed compensation for themselves by a Corn
Law for their heavy and peculiar burdens.”
UK revenue base over six centuries
%
100
Revenue & Cost of Living = 100
80
60
LAND REVENUES
TAXES
40
20
Derived from Richard Cobden’s
parliamentary Corn Laws debate (1845)
0
1290
1215 Magna Carta
1390
1490
1590
1690
1790
Land Values Research Group 2005
1890
Thorold Rogers (1823-1890): wages decline
people are denied cheap access to land
when
“The 15th century and the first quarter of the 16th were the
golden age of the English labourer, if we are to interpret the
wages which he earned by the cost of the necessaries of life.
At no time were wages, relatively speaking, so high, and at no
time was food so cheap ....
It is possible that as the distribution of land became more
general, and the tenancy for a term of years became habitual,
the phenomenon which has often been noticed of peasant
proprietorship, a high rate of wages paid to the free labourer,
may have been exhibited in the period”
James Edwin Thorold Rogers, “Six Centuries of Work and Wages”, 11th edition, 1912, p.326
Disposable income of English Labourer
(family of five)
%
300
Revenue & Cost of Living = 100
280%
'Merrie
England'
250
HIGH
DISPOSABLE
INCOMES
200
Chart by Rev WDP Bliss, based on Thorold Rogers
150
LOW DISPOSABLE INCOMES
cost of living line
100
50
0
1290
1390
1490
1590
1690
1790
1890
Disposable income of English Carpenter
(family of five)
%
400
Revenue & Cost of Living = 100
'Merrie
England'
380%
HIGH
DISPOSABLE
INCOMES
300
Chart by Rev WDP Bliss, based on Thorold Rogers’
“Six Centuries of Work andWages”
LOWER DISPOSABLE INCOMES
200
cost of living line
100
0
1290
1390
1490
1590
1690
1790
1890
Disposable income of English Labourer
and Carpenter (families of five)
%
400
Revenue & Cost of Living = 100
'Merrie
England'
380%
HIGH
DISPOSABLE
INCOMES
300
Chart by Rev WDP Bliss, based on Thorold Rogers’
“Six Centuries of Work andWages”
LOWER DISPOSABLE INCOMES
200
cost of living line
100
0
1290
1390
1490
1590
1690
1790
1890
Labourer’s disposable income
against revenue base
%
300
Revenue & Cost of Living = 100
'Merrie
England'
250
280%
Chart by Rev WDP Bliss, based on Thorold Rogers’
“Six Centuries of Work andWages”
HIGH
DISPOSABLE
INCOMES
200
150
LOWER DISPOSABLE INCOMES
100
cost of living line
50
land rents
taxes
0
1290
1390
1490
1590
1690
1790
1890
Disposable income of English Labourer
(family of five)
%
300
Revenue & Cost of Living = 100
280%
'Merrie
England'
250
HIGH
DISPOSABLE
INCOMES
200
Chart by Rev WDP Bliss, based on Thorold Rogers
150
LOW DISPOSABLE INCOMES
100
cost of living line
50
land rents
taxes
Chart based on Richard Cobden 1845
0
1290
1390
1490
1590
1690
1790
1890
Carpenter’s disposable income
against revenue base
%
400
Revenue & Cost of Living = 100
'Merrie
England'
380%
HIGH
DISPOSABLE
INCOMES
300
Chart by Rev WDP Bliss, based on Thorold Rogers’
“Six Centuries of Work andWages”
LOWER DISPOSABLE INCOMES
200
cost of living line
100
land rents
taxes
0
1290
1390
1490
1590
1690
1790
1890
Homer Hoyt: the bursting of land price
bubbles precede financial collapse including Wall Street’s in 1929
Real estate peak 1925
1929 stock market collapse
We remember that the OPEC
oil crisis in October 1973
created worldwide recession?
We remember that the OPEC
oil crisis in October 1973
created worldwide recession?
Do we?
We remember that the OPEC
oil crisis in October 1973
created worldwide recession?
Do we?
Can we remember the land boom
that preceded the OPEC crisis?
We remember that the OPEC
oil crisis in October 1973
created worldwide recession?
Do we?
Can we remember the land boom
that preceded the OPEC crisis?
Usually not. As with the 1925
land boom, it’s almost as though
it has been written out of history
We remember that the OPEC
oil crisis in October 1973
created worldwide recession?
Do we?
Who remembers the land boom
that preceded the OPEC crisis?
Usually not. As with the 1925
land boom, it’s almost as though
it has been written out of history
Sir William Petty
(1623-1687)
 The first thing Oliver Cromwell did after he conquered Ireland (16491652) was to have it valued
 William Petty won the contract using cheap labour
 Physician, inventor, economist .... duellist
 Completed his ‘Down Survey’ in an amazing 13 months
 Understood theory of rent before Ricardo: in 1661 he said Ireland
was “worth but 7 years’ purchase”(of its rents), or a yield of 14.3%!
John Locke
apostle of freedom
1632-1704
I“t is in vain in a country whose great fund is land to hope to lay the public
charge on anything else; there at last it will terminate. The merchant (do
what you can) will not bear it, the laborer cannot, and therefore the
landholder must: and whether he were best to do it by laying it directly
where it will at last settle ... let him consider.”
-Some Considerations of the Lowering of Interest
In the beginning ...
- “Put to the vote: as many are of the opinion that a public tax upon the
land ought to be raised to defray the public charge say ‘yea’. “
- “Yea! “
- “Carried in the affirmative - none dissenting. ”
[Philadelphia's first tax law 30 January 1693]
Average Weekly Wages: USA
workers on non-farm payrolls
350
Constant 1982 $ per week
$315.44
(1972)
-13.8%
300
$271.96
-19.2%
250
$254.87
(1993)
First half of Kondratieff Wave
Second half of Kondratieff Wave
200
$196.47
150
1947 1950
1960
Source: US Bureau of Labor Statistics
1970
1980
1990
2000
Average Weekly Wages: Australia
350
Constant 1983 $ per week
$318.40
2004
$312.60
1983
300
$285 .00
1991
250
First half of Kondratieff Wave
Second half of Kondratieff Wave
200
150
1947 1950
1960
Source: Australian Bureau of Statistics
1970
1980
1990
2000
Kondratieff Long Wave Cycles
Nikolai Kondratieff
1892-1938
1814
1873
First Wave
1789
1920
Third Wave
Second Wave
1849
Smoothed - Diagrammatic only
1896
Kondratieff Long Wave Cycles
- the seasons
Nikolai Kondratieff
1892-1938
Kondratieff Long Wave Cycles
- the seasons
Nikolai Kondratieff
1892-1938
Kondratieff Long Wave Cycles
- the seasons
Nikolai Kondratieff
1892-1938
Kondratieff Long Wave Cycles
Nikolai Kondratieff
1892-1938
An impending Kondratieff ‘winter’
could be allayed by switching the
revenue emphasis:
 ....from tax imposts upon people and businesses who are
doing productive work ...
 ....to revenues based upon the value of privately held lands
THE
RICHES
OF OZ
The Economic
Consequences
of Bubbles
Australia: A Case Study
Burst
bubbles and rising unemployment
%
35
total real estate sale
prices divided by GDP
30
25
20
?
?
15
10
5
unemployment
0
1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
Australian Land Price Indices
Five major States
3
WA
Q'ld
2.5
Vic
NSW
2
SA
1.5
1
1984
1985
1986
1987
Commonwealth Grants Commission
1988
1989
1990
1991
1992
1993
Sir George
Edward Gibbon
Grey
v. Wakefield
1812-1898






1796-1862
Characterise both sides of the battle to privatise rent
Grey: soldier, explorer of WA, public administrator
Wakefield: brat, sociopath, devised ‘Wakefield Plan’
Wakefield: England, Canada, New Zealand
Grey: Ireland, South Australia, New Zealand, Cape Town
Grey won the battle but Wakefield has won the war because we have come to accept high land prices and
taxation as the natural order of things