Deeper tax reform can lead to deeper job creation
The peak body for the state’s biggest industry has seized on the latest unemployment data to renew calls to fast-track the abolition of stamp duty on commercial property transfers.
The latest seasonally adjusted employment data reveals that 20,200 more South Australians are employed today than in July 2015, when a decision was made to abolish non-residential stamp duty.
Stamp duty on commercial property transactions will be phased out over a three-year period (initially commencing in December 2015) until its complete abolition on 1 July 2018.
SA Executive Director of the Property Council Daniel Gannon said that more jobs could be created if a deeper tax reform agenda was embraced.
“The abolition of stamp duty on non-residential property transactions should be accelerated as a top policy priority,” said Mr Gannon.
“Our state’s policy-makers need to create every possible competitive advantage to ensure that South Australia is the country’s most attractive investment destination. If we fail to create this environment, then we risk our state’s future economic prosperity.
“In the period between July 2015 and January 2017, there has been an uplift in total persons employed in South Australia and this comes on the back of a decision to reform our tax system.
“Fewer taxes mean greater prospects of job creation and economic stimulation, but without further structural changes to our tax system, we run the risk of failing to continue to innovate.
“The acceleration of this deadweight tax is a green light for investment and a positive platform for investment hunting.”
Mr Gannon said the stamp duty saving on a $1 million commercial property purchase equates to $48,830, while on a $5 million investment it presents a $268,830 saving. A $10 million transaction after 1 July 2018 will see a saving of $543,830.
Property is South Australia’s largest private sector employer and biggest industry, accounting for 10.8% of the state’s economic activity (or $10.5 billion).
It builds prosperity by paying $4.4 billion in wages and salaries – one in six people draw their wage directly or indirectly from property – and one million South Australians have a stake in property through their super funds.
Property is the largest single industry contributor paying 56.6% of state taxes, local government rates, fees and charges.
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