Land use rules erode freedom

Environmental regulations threaten constitutional rights dating back to Magna Carta, Wolfgang Kasper argues.

Unease over the security of private property rights is spreading throughout Australia. Rural landowners in particular are being subjected to proliferating new environmental regulations which take important traditional property rights away.

In WA, thousands of landowners have received letters informing them of new environmental regulations and inviting them to comment.

They fear that the productive and the market value of their properties will be reduced. However, most farmers do not really know how to deal with the complicated procedures and the legalese of the authorities.

They may have to incur new costs, for example for fencing off wetlands. Vague definitions confuse and draconian penalties intimidate them.

They feel helpless in the face of relentless erosion of their freedom and have to contemplate the prospect of shrinking values of their land, which is often their only superannuation and collateral for loans.

It is becoming clear that rampant environmentalism undermines the traditional legal foundations on which Australia’s prosperity is built and which we trusted.

It is ironic that –– a decade after the demise of global socialism –– new assaults on the institution of private property proliferate in the Labor-ruled States.

Traditionally, property owners do not have to prove anything when they wish to exercise their rights.

Private property is not the mere possession of an asset, whether it is a block of land, a mineral deposit, a machine or a skill.

Rather it is an open-ended bundle of rights to exclude others from one’s property, to use, benefit from and dispose of some or all property rights as one sees fit.

Frequently, one cannot even know what specific rights a property confers. New rights are discovered all the time, for example the right to develop land for the enjoyment of paying tourists. Such discoveries are part of what maintains property values.

Property rights are not absolute.

The exercise of ownership must not unduly harm others.

Centuries of creative judicial endeavour have established rules when and how harm can be proven in court. Under Anglo-Saxon law, a list of legitimate objections to property uses has been recognised.

Objectors of course have to incur the burden of proof.

Mere fear of harm or precaution is not a valid ground for undermining property rights, and the evidence must be well founded. Vague allegations will not do.

In recent decades, prominent economists and lawyers have been concerned about the abuses of self-seeking politicians and officials in making public choices that interfere with private property rights.

This research has inspired demands to reassert property rights by always asking:

Therefore they try to please lobbies on the cheap, curtailing private rights by surreptitious regulatory activism. It can only be contained by an obligation to compensate fully, which forces policy makers to set priorities.

Compensation on just terms normally means ‘at market value before the intervention was announced’. Socialisers often erode property rights to cut the cost of compensation.

When Mao had prohibited virtually all private uses of capital after 1949, China’s government could ‘compensate’ the expropriated millionaires for a pittance. Such Maoist tactics are now spreading in Australia.

This must be resisted, not only because it is a gross injustice to selected fellow citizens, but also because it undermines everyone’s prosperity and freedom.

It will also produce a regrettable backlash against nature conservation.

Some Green lobbyists and State officials want to do away altogether with this cumbersome protection of individual rights.

When environmental harm is feared, alleged or proved, regulate and confiscate, all in one elegant neo-socialist leap.

Some want to brush aside the constitutional traditions that go back to Magna Carta. They assert that governments grant freehold and can take it back. This concept from the feudal era is a sure-fire way of undermining the foundation of our wealth and confidence.

It offers a shortcut back to the Dark Ages.

Economic history invariably shows that disrespect for private property rights and the rule of law destroys people’s confidence to risk and produce.

Arbitrary confiscation impoverishes all. The abysmal failures of Soviet and third-world socialism are based on the slogan that “property is theft”.

By contrast, the economic rise of East Asia was preceded by gradual improvements in economic freedom.

Likewise, Reagan’s, Thatcher’s and Hawke’s economic reforms during the 1980s and 1990s, by improving our freedom ratings, underpin a robust economy and an optimistic can-do spirit.

Unchecked environmental activism and the re-growth of regulations are now diluting these achievements.

The costs of property rights violations rise as globalisation progresses.

Let’s never forget that foreign investors are watching us closely.

Ministers now compete with their overseas counterparts in the business of providing confidence-inspiring institutions.

This does not mean that State governments should not pursue nature conservation. But it must not be at the expense of property rights.

If voters want to retain native vegetation and wetlands, political leaders must raise taxes to fund full compensation.

It is not honourable for departments to deny that their regulations confiscate private rights or to send out confiscation notices without offering compensation.

Professor Wolfgang Kasper is an economist and a senior fellow of the Centre for Independent Studies, a public policy think-tank in Sydney.