Gluing economies with economic rent

But all is not lost for Australia. We have two advantages going for us: time, and the recommendations made for Australia's Future Tax System by Ken Henry's panel of review.

We find ourselves later in the cycle than most other countries, so, in respect of the first advantage, we would be foolish not to learn from their mistakes as they've bailed out banks, printed too many dollars and imposed impossible austerity measures upon their citizenry. There's a far better response than these.

That relates to the second item in our favour: if Australia has the gumption to put the Henry Review's far-sighted recommendations for the capture of land and natural resource rents into practical application and to abolish arbitrary imposts on labour and capital, we may even now be able to work our way out of arriving at Ireland's sorry state, a plight for which we are otherwise destined when our real estate bubble bursts shortly.

The world got where it is by allowing the public's rent to be privatised by a few. It can reverse the process by freeing up labour and capital and capturing land rent to the public coffers.