30 April 2009

Professor Davidson addresses Commonwealth Treasury on land tax

Since sharing his views on land tax in The Age recently, Professor Sinclair Davidson, of the School of Economics, Finance and Marketing was invited to present his paper to the Commonwealth Treasury on 23 April.

His visit to Canberra forms part of the Treasury’s secretariat support for the Henry Review of Australia’s tax system which was announced on 13 May 2008.

‘The review will look at the current tax system and make recommendations to position Australia to deal with the demographic, social, economic and environmental challenges of the 21st century.’

Professor Davidson’s paper, ‘A Critique of the Geo-Rent’ was presented to a challenging Treasury audience of around 40 people, coincidentally falling on the same day as Australia’s Tax Freedom Day.

‘There has long been the idea in economics that land is a free gift of nature and that the owners of the land have monopoly access to that free gift. If this is true, it might be possible for government to tax land with none of the usual adverse consequences associated with taxation.

In technical terms land tax has no deadweight costs. Despite these theoretical advantages, land tax isn’t used much in public finance. From time to time the advocates of land tax propose a greater role for the land tax,’ he argues.

As well as having published numerous academic papers in institutional economics and property rights, Professor Davidson is recognised by Treasury as an expert in taxation.

Professor Sinclair Davidson works as a Professor in Institutional Economics in the School of Economics, Finance and Marketing at RMIT University.

Visit the Australia’s future tax system website for additional information.

View The Age article.