Question

GEORGIST ECONOMIC THEORY Ownership of land leads to poverty Value of land is created by nature and society (supply and demand concept), not hard work of individual. Land tax could finance all government expenditure, prevent land speculation and concentration of ownership, end poverty. Land tax could be extended to include all value created by nature and society. Discussion: The Fiji Context Batt (2003) 10

1. Using the Edgeworth box show a simple relationship between John and Paul’s consumption of Buns and Bread.

2. Determine their pareto-efficient allocation point and explain what actually happens at this point.

Answer 1

The ownership and utilisation of natural resources can be complex matters in most situations giving rise to inter-alia questions about distribution of the wealth generated, impact on the environment, impact on neighbouring communities and sustainability.

Most land in Fiji is under indigenous communal ownership and unlike many is is very complex. The complexity is further exacerbated when land use is entrusted to a bureaucratic institution such as Fiji's Native Land Trust Board (NLTB) then, besides the interests of landowners and tenants, other institutional and individual bureaucrats' interests also affect tenure arrangements other countries the land problem in Fiji.

Of the total land area, Fijian landowning units hold 82.5 per cent, 7.5 per cent is held by the government and 10 per cent is freehold land. Approximately 25 per cent of the economically active population derive their income directly from the sugar industry and 40 per cent of the country's export earnings are obtained from this sector. The rise of a landless Indo-Fijian community adds another dimension to the country's existing social problems. . Socioeconomic and environmental problems in the urban centres further escalates if due to the influx of rural dwellers.

Fiji is feeling the impact of its ever-growing urban population, from 33.4 % of total population in 1966 to 53.6 % in 2010. Few of the solutions that can control the ownership and land value rise in Fiji can be summed up as:

Letting the land revert back and resettling the tenant farmers onto state, freehold, or native land which is not required by landowners; renewing leases for another term under Agricultural Landlords and Tenants Act (“ALTA”).

To seek land for leasing where this is available.

Property and Land Tax reforms require amendment to keep a check on ownership of land.

Freehold land can be taken under Government’s custody and let for activities to encourage tenancy than ownership.

Capital Gains tax of property and transfers should be optimized to discourage Transfers at higher prices.

Property Transfers should be monitored for undue capital appreciation.

Land and other Property transfers should be regulated, so that each transfer is registered for Ownership or possession.

Transactions related to Property sales, Rent and Lease should be recorded, tracked and monitored for source of money involved.

To work as agricultural labourers;

To seek non-agricultural livelihood as:

Self-employed persons or

As wage earners

To migrate abroad, an option for those who have immediate kin overseas and the means to do so.