mxx1's avatar

Rent

If you treat 1788 as the year an imaginary lease was signed for the non-treaty, non-national park fraction of Australia’s land, the ensuing maths depend entirely on what you call a fair rent.

Using a modest figure of £1 per hectare in 1788, well below the going rate for even poor English farmland at the time and reflecting the relatively poor standard of Australian land for agricultural purposes, and charging only for the 58 per cent of the continent outside native title or control and the national reserve system, the annual rent in 1788 would have been about £446 million.

Yes, native title and the parks came later, but most of the land was not used much of the time either, nor will it be.

Leaving the rent unpaid and applying a 2% real interest rate (taken from similar deals elsewhere) to the arrears from 1788 to 2025, and the total comes to ca .A$6.0 trillion. That is around 2.2 times Australia’s annual GDP, large enough to be economically impossible to pay in a lump sum.

If you drop the back-payment idea and just charge the rent going forward, the bill is far smaller. Inflation-adjusted rent works out to about A$6 billion a year. That is about 1 per cent of current tax revenue.

Under Australian law, all of the country is technically owned by the Crown (the King) with everyone else holding it only under various forms of lease or sub-title.

So, transferring the king’s crown title to the aboriginal peoples as a financially improved asset might cover back payments. And then we just pay rent going forward.

That’s small in budget terms, and if the rent went into a sovereign “future fund” on behalf of Aboriginal people, much of it would be reinvested in the domestic economy rather than withdrawn. Money (rent) into the fund would come directly from treasury.

Done properly, it wouldn’t just avoid a cost to the broader economy; it could increase national wealth while finally acknowledging the base asset on which it is built.

It’s worth noting that we already exempt a large category of land rent from tax: the “imputed rent” on owner-occupied housing. For eight years between 1915 and 1923, the Commonwealth did tax that notional rental income. We don’t anymore (I wonder why? Lol), but the precedent exists – the idea of taxing the rental value of land, even if no money changes hands, is not new.

It’s relevant because it shows that the idea of charging rent (or rent-equivalent) on land that people already “own” isn’t alien to Australian policy. By pointing to imputed rent on owner-occupied housing between 1915 and 1923, there is a precedent where the feds recognised the economic value of occupying land or property even without a cash rent being paid. That makes the proposed Aboriginal land rent scheme less of a radical leap and more of an extension of a principle we’ve already used.

A national rental scheme could be structured with two classes of beneficiaries in order to preserve its recognition purpose while broadening political support. Class A would consist of Aboriginal beneficiaries who would receive the majority share, for example 70 per cent, of the income stream. This reflects both original ownership and the scale of dispossession and would be managed through an Aboriginal controlled future fund with a mandate to reinvest domestically. Class B would include all Australian citizens who would share in the remaining 30 per cent.

All beneficiaries would benefit through direct dividends paid to the ATO to offset the individual’s income tax. If no income tax is payable then the individual would receive the benefit as a tax free dividend.

This split keeps the symbolic and practical link between the land and its first owners while giving the wider population a tangible stake in maintaining and growing the asset.

With the fund investing primarily in domestic projects and enterprises most of the rental value would remain within the Australian economy rather than being removed from it. The cost to government would be negligible and the arrangement would increase political acceptance by ensuring the scheme benefits every Australian while clearly recognising the land’s origins.

Lastly, this idea works because it underlines the true nature of mercantile Australia. The country’s wealth has always rested on control of land as the base asset, with everything else built on top of that foundation. Today, just about all excess wealth is invested in the land and improvements. Treating the land as a leased resource and recognising its original owners would not just address an historical debt, it would expose how much of the economy is still shaped by the same mercantile logic that began in 1788.