Property sector welcomes state taxes debate

Property sector welcomes state taxes debateThe peak body for Australia’s $680 billion property industry has today welcomed Federal Treasurer Joe Hockey’s call for a proper debate on state taxes. The Property Council of Australia said the Treasurer’s speech comes just days after it released polling highlighting widespread public acceptance of future GST changes. “Treasurer Joe Hockey’s acceptance that stamp duty is a harmful, distortive tax which needs to be abolished is welcome news for this state’s property sector,” said SA Executive Director Daniel Gannon. “But in order to completely abolish stamp duty, broader tax reform is required – and that means changes to the GST. “Abolishing stamp duty and replacing it with a more efficient revenue base would address housing affordability, boost South Australia’s economy, be supported by the community, and bolster our State Budget. “Obviously the abolition of stamp duty needs to occur in conjunction with a broader series of tax changes so that the State Government has the revenue it needs to deliver services, and it is essential that GST reform is part of this discussion.” A report from Newgate Research Community attitudes towards tax reform, commissioned by the Property Council, found that nine out of ten Australians surveyed supported tax reform which made the system simpler and fairer. “Far from being political poison, South Australians view the GST as our fairest tax,” said Mr Gannon. “Our research shows that a reformed GST would pass the fairness test set by our political leaders. “Some 65 per cent of respondents believed the GST to be fair or very fair, and only 35 per cent as unfair, with most citing its benefit as a tax that cannot be dodged. “The research also shows that people think it is inevitable that the GST will go up. When asked what they believed would happen over the next decade, almost three quarters (72 per cent) said the GST will increase. “Strikingly, only two per cent believed it would definitely not go up and just six per cent that it would probably not go up. For the public, this is almost a done deal. “The State Government in last month’s Budget set the standard for the rest of the country through its announcement to phase out stamp duty on non-residential property transfers. But the property sector continues to advocate for residential stamp duty abolition. “Treasury’s own modeling shows that Australia’s economic welfare is reduced by 73 cents for every dollar of stamp duty raised, which is per cent worse than company tax and three and a half times worse than income tax or the GST. “Changes to the GST is a practical solution to enable stamp duties to be retired to boost our state’s economy in a way that is fair.”