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Without revenue reform this is a pointless election

By Bryan Kavanagh - posted Wednesday, 7 August 2013

So September 14 has become September 7? Would it be too churlish to think that's about the biggest political change we can expect "going forward" as they say?

Oh sure, the Lib/Labs will screw us over in different ways, but it's tantamount to each of the political parties deciding which of the Titanic's chairs they will re-arrange for us as they direct us towards the inevitable iceberg.

If I don't agree with him on guns, I'm certainly with former Minnesota governor Jesse (the body) Ventura that political parties are proving to be a blight on western society because they've slowly but surely become corrupted.


Now wait a minute! I'm not simply being negative. I've thought this through from a long way out and it sends my blood pressure racing to watch Australia relentlessly following my script into a depression, a script that says without the necessary political action we're about to put many Australians and their businesses onto the scrap heap, signifying the period of Nikolai Kondratieff's fourth long wave since 1790.

Economists don't believe the K-wave exists. They can't, because it demonstrates their supreme impotency which came about after they threw out the classical handbook and began to conflate land with man-made capital. Almost to a man they now hold that the future is unknowable, and, as if to underline the point, Treasury has just announced a revenue write-down of $33 billion in a matter of months. And it aint going to get any better, guys! You can forget about that proposed surplus for financial year 2017!

How do I know this? How do I know any better?

Well, I understand how an economy works because I am both a Henry Georgist and a real estate valuer. I know Australia has to generate real wealth, not just blow up asset bubbles which only provide the pretense of wealth.

I know the tax regime has increasingly given a green light to rent-seeking and a red light to labour and capital since 1972; such that average real wages are now less than they were in 1972, and; such that the current level of household debt can no longer be repaid.

Most importantly, I know the difference between land values and land prices. I know what constitutes a bubble. And that bubbles burst.


However, it aint just me, anybody with an open mind knows something has to give, and in a big way, unless we act immediately to change our tax system to support all Australians, not just the privileged few.

A revolutionary change along the lines of Ken Henry's excellent recommendations which will capture much more of our publicly-generated natural resource rents will certainly help us resist catastrophe. (Remember the original mining tax? Remember the all-in land tax?)

But governments, ignorant of the overarching picture I'm able to paint because they believe their economic advisors, will most likely continue supporting the "big end of town"--banks and other rent-seekers-- in a futile attempt to keep land price bubbles inflated, instead of properly managing their deflation.

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About the Author

Bryan Kavanagh is a real estate valuer and associate of the Land Values Research Group.

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