Total Resource Rents of Australia (Fitzgerald / Prosper Australia)

Summary

Total Resource Rents of Australia: Harnessing the Power of Monopoly (2013, second revision) is a report by Karl Fitzgerald, then Projects Director of Prosper Australia, the Melbourne-based Georgist research and advocacy organisation. It updates the late Tony O'Brien's Total Resource Rents of Australia (1999), and works line-by-line through Australian land, natural resources, and government-licensed monopolies to ask how much economic rent exists and how much government it could fund. [Verified against the primary PDF's title page, About, and Acknowledgements.]

Its headline findings, verified verbatim against the report:

• "Economic rents are a significant component of the Australian economy, comprising 23.6% of GDP." (Major Findings) — restated in Part II as: "Based on our annual GDP of $1.45 trillion, the economic rent herein calculated constitutes 23.6% of GDP... nearly one quarter of the economy is a 'free lunch' to owners of natural monopolies, delivering high rates of return for little effort or risk."
• "The Total Resource Rents of Australia report finds monopoly rents are capable of replacing taxation at all levels of government. […] The most efficient form of government revenue-raising, the taxation of economic rents, can raise 87% ($340.719 billion) of revenue needed." (Executive Summary, verbatim; the elided sentence states the 2011-12 requirement — local, state and federal governments needed $390.067 billion in operating revenue — and the passage closes by adding that including sin taxes and non-taxation revenue makes a fairer, more equitable tax base possible.) The full Table 1 schedule — rents plus retained sin taxes, licence revenues, a tripled carbon tax, and non-tax receipts — totals $386.905 billion, which the table itself labels a "$3,162 million deficit" against the $390.067 billion requirement.
• "Income, company and sales taxes, along with 122 present taxes could be scrapped" — i.e., most of what the report counts as Australia's 126 existing taxes.
• Land alone supplies 52.8% of government revenue (14.2% of GDP); natural monopolies 24.6% (6.6% of GDP); mining and petroleum resource rents 10.5% (2.8% of GDP); sin taxes 7.8%; non-tax receipts 2.6% (Table 2, verbatim). The report contrasts its 23.6%-of-GDP rent figure with neoclassical textbook claims (Krugman & Wells, Pen, Buchholz) that rent is 1–2% of national income, concluding "the influence of monopoly is 10 times greater than mainstream economists acknowledge."
• An efficiency dividend of $66.3 billion (analysis attributed to researcher Philip Soos) from removing deadweight taxes — 90% of existing taxation is classed as distortionary, "adding 23% to prices of goods and services." These gains are excluded from the revenue arithmetic above.

The report is the modern Georgist movement's most widely cited national rent inventory: it supplied the methodological template for Common Wealth Canada's Natural Common Wealth and Economic Rent in Canada (2023) and is quoted across this wiki's advocacy literature. It is an advocacy-organization estimate, not a peer-reviewed or official statistical one, and is carried here on that basis — see Limits and Honest Assessment.

What the Report Estimates

Table 1 ("monopoly rents have the capacity to finance government"), verified verbatim against the PDF, builds the $386.905 billion total from, among others:

(Smaller lines — satellite orbits $510m, domain names $300m, forestry $50m, patents $65m, parking $250m, public transport $2,400m, plus retained sin taxes, liquor licences, vehicle registration, and discounted non-tax receipts — complete the schedule.)

Illustrative micro-level arithmetic, verbatim from the report: "In 2012, the median Australian home in our capital cities was priced at $478,000. The land portion is estimated at 70%, meaning $334,600. A land tax of 5.5% on $334,600 equals $18,403" — offset, the report argues, by the removal of income tax (a $7,822 saving for the median earner, $16,426 per average 2.1-person household), falling land prices, and cheaper goods. The household land sector is expected to raise $168.218 billion across 8.65 million households, averaging $19,790 per household.

Methodology (as reported)

• Land (the 5.5% capitalization method). "The Australian System of National Accounts calculates land values at $3.68 trillion (2011–12). Land tax has been set at 5.5%, just below trend growth terms. The ABS calculated gross land rents at $153.3 billion (2011–12), which equates to our residential figures." (Verbatim, "Land rent calculations.") That is: annual land rent is proxied by applying a 5.5% rate to the ABS stock of land values — a rate calibrated to sit just under the trend growth rate of land prices — with the residential result cross-checked against the ABS gross-land-rent flow. Commercial land is set at 6.5% "to account for the higher annual yield in that sector."
• Mining. A reformed MRRT levying 40% on EBITDAX (earnings before interest, tax, depreciation, amortisation and exploration) of the big three miners — BHP, Rio, Xstrata, totalling $67.359 billion (2011-12) — plus $14.637 billion of shareholder dividends, yielding $32.8 billion. The report contrasts this with the actual first-year MRRT take of ~$200 million and the government's expected $1.5 billion from mining and petroleum in 2011-12.
• Oil and gas. 40% of industry EBITDAX (ABS 8155), yielding $8.092 billion; the report notes the existing PRRT's 40% statutory rate collapsed to "an effective 3.2% rate" for Woodside and Santos ($174m paid on $5.5bn EBITDAX). (Note: the body text states the EBITDAX base as "$22.229 billion (2010–11)" while Table 1 lists $20,229m; only the latter is consistent with the $8.092 billion figure — a minor internal discrepancy in the report itself.)
• Licensed and natural monopolies. Flow-based charges (generally 40% of EBITDA or of net surplus) on airports, gambling, and banking; stock-based charges (2–20%) on utilities, spectrum, internet infrastructure, water entitlements (Bob O'Brien's $50 billion market estimate), satellite orbits (2% of the global industry, Australia's GDP share), and a 2% "corporate commons fee" on ASX market capitalisation ($27.64 billion) for the legal privileges of personhood and limited liability. Taxi licences are costed from the Fels Inquiry's $25,000/year proposal across 14,402 licences.
• Stated assumptions (verbatim from the report's front matter): "This is a static analysis; transitional issues are not covered. Conservative assessments have been adopted. 2011-12 figures used where possible." The report also flags its own data problem — a "note on data sovereignty" listing seven asset classes (fishing, forestry, water licences, domains, patents, satellite orbits, utilities) with no public national valuations — and mixes stock and flow bases accordingly: "The available valuation data affected percentage rates charged depending on stocks or flows... In time we would like all resources to have a total asset valuation."

Limits and Honest Assessment

• Advocacy source, not peer review. Prosper Australia exists to advocate the capture of economic rents; the report was authored and published in-house, without academic peer review or replication by a statistical agency. As with Common Wealth Canada's report, this wiki carries its figures as the organisation's own attributed estimates, on the optimistic end of the contested revenue-capacity debate, not as settled findings.
• The 5.5% rate is a growth-rate proxy, and such proxies are contested. Setting the land charge "just below trend growth terms" anchors collectible rent to historical land-price appreciation rather than to observed rental yields — closely related to the price-growth method that Common Wealth Canada copied from this report in January 2023 and then abandoned in its July 2023 revision (switching to a 5.5% capitalization rate on land values and cutting its own land figure ~46%). TRRA's cross-check helps — its residential take of $153.7 billion approximately equals the ABS gross land rent flow of $153.3 billion — but ABS gross rent is not net economic rent (it includes returns to structures, maintenance, and management), and the report's total land take (~$206 billion across all classes) exceeds that ABS benchmark. Whether ~5.5% of land value is durably collectible each year without eroding the base is exactly the disputed question, since a substantial land tax capitalizes into lower land prices (the report itself cites AHURI modelling of a ~5% price decline under a much smaller broad-based land tax, and forecasts land prices would fall in many areas).
• "Rent" is drawn very broadly. Beyond land and subsoil minerals, the schedule includes a 2% levy on all ASX market capitalisation, 40% of bank cash profits plus dividends, 10% of utility and internet asset values, and a tripled carbon tax — categories where separating monopoly rent from normal returns to capital and risk is contestable, and which critics would class as capital or wealth taxation rather than rent capture. Several bases are explicitly rough (water at Bob O'Brien's $50 billion "estimate"; public transport extrapolated from Hong Kong's MTR; parking "based on MCC revenue"), and the report concedes the paucity of official valuations.
• Static, no general-equilibrium modelling. The report says so itself ("this is a static analysis; transitional issues are not covered"). Interactions are not modelled — e.g., the banking-licence rent is levied on profits that the report elsewhere argues its own land-tax reform would shrink; sector EBITDA bases would move under the proposed tax swap. The claimed offsetting effects (its $66.3 billion efficiency dividend, wage and price effects) are asserted from the deadweight-loss literature rather than modelled, though the report conservatively excludes them from its revenue totals.
• Minor internal inconsistencies exist at claim level — e.g., the oil-and-gas EBITDAX base is $20.229 billion in Table 1 but "$22.229 billion" in the text; Table 2's component percentages sum to 98.3% of revenue while Table 1's total implies 99.2%. None changes the order of magnitude, but they indicate the report's level of editorial polish.
• Relation to Dwyer. Terence Dwyer's "The Taxable Capacity of Australian Land and Resources" (2003) is the earlier, journal-published (Australian Tax Forum) national-accounts calculation that TRRA's conclusion echoes — that Australian land and resource rents are large enough to replace existing taxation. Dwyer's paper is the more-cited academic companion; TRRA is the broader advocacy inventory, extending the base from land and resources to licensed monopolies (spectrum, banking, gambling, taxis, domains). This wiki's Dwyer page is a stub whose headline magnitudes remain unverified, so the two estimates cannot yet be reconciled figure-for-figure here; the qualitative convergence of the two Australian exercises is what this wiki carries.
• No independent replication located. As with the Canadian successor report, no government, academic, or third-party critical assessment of TRRA's specific figures was located in this session; the estimates should be treated as contested pending such review.

Bears On

• Outcome: Land rent could fund a large share of government — TRRA is the Australian worked example on the optimistic ("advocate aggregation") side of that debate: rents at 23.6% of GDP, funding 87% of all-levels government operating revenue, versus mainstream measured-rent figures an order of magnitude lower. It belongs alongside — and predates — the Common Wealth Canada estimate already carried on that page.
• Objection: LVT can't raise enough revenue — the report is a direct country-level rebuttal attempt, though a contested one (see Limits).
• Concepts: Economic Rent · Resource Rents · Land Value Tax · ATCOR (the report's excluded $66.3B efficiency dividend and predicted commercial-land value rises are ATCOR-adjacent claims)
• People / organizations: Karl Fitzgerald · Prosper Australia — the report sits alongside Prosper's speculative vacancy research (cited within TRRA: 90,730 Melbourne residential vacancies, 2011) and Fitzgerald's documentary Real Estate 4 Ransom.

See Also

• Valuing Common Assets for Public Finance in Vermont — the 2008 US state-level predecessor inventory whose 5%-of-land-value rent benchmark this report cites
• Dwyer, The Taxable Capacity of Australian Land and Resources — the academic predecessor calculation for Australia
• Natural Common Wealth and Economic Rent in Canada — the Canadian report that adopted (then revised away from) TRRA's land method
• Land rent could fund a large share of government — the outcome this bears on
• Objection: LVT can't raise enough revenue — the steelmanned opposing view
• Gaffney, "The Hidden Taxable Capacity of Land" — the US-side optimistic argument

Sources

1. Karl Fitzgerald, Total Resource Rents of Australia: Harnessing the Power of Monopoly (Prosper Australia, 2013, second revision). PDF — the primary report, retrieved and read in full for this page. Used for all headline figures (23.6% of GDP; 87% / $340.719B of $390.067B; the Table 1 schedule and $386.905B total; Table 2 shares; the 5.5%/6.5% land method and $3.68 trillion ABS land-value base; the 40% EBITDAX mining/petroleum method; the $66.3B efficiency dividend and 90%/23% distortion claims; the $18,403 median-home worked example; and the stated assumptions), all verified verbatim.
2. Tony O'Brien, Total Resource Rents of Australia (1999) — the predecessor study this report updates, cited within the primary PDF (Acknowledgements and Part V); not independently retrieved this session.
3. Terence Dwyer, "The Taxable Capacity of Australian Land and Resources," Australian Tax Forum 18(1), 2003 — used for the comparison to the earlier academic Australian estimate (see the caveat in Limits; magnitudes unverified on this wiki). Wiki page
4. Common Wealth Canada, Natural Common Wealth and Economic Rent in Canada (2023, two versions) — used for the downstream adoption and subsequent revision of TRRA-style land-rent methods, as documented on this wiki's page (verified there against both primary PDFs).
5. This wiki, Land rent could fund a large share of government — used for the framing that national rent-capacity estimates are contested and method-sensitive.