Tax reform is essential for growth

Home Media Releases Tax reform is essential for growth

Tax reform is essential for growthWhile stamp duty reform is a good move, the ACT Government must also stick to its promise to maintain revenue neutrality as part of its tax reform program if it is to encourage growth in the capital, says the Property Council of Australia.”The Property Council supports taxation reform in the ACT, provided this reform leads to greater efficiency and fairness and does not further burden the property sector, which is already over-taxed,” says the Property Council’s ACT Executive Director, Catherine Carter.”Ongoing increases in general rates on commercial properties – increases that are much greater than the reduction in stamp duty and insurances – will stifle building and growth in Canberra. The increase to date in general rates on the non-residential sector has been much greater than the increase in rates on the residential sector.The Property Council says the annual cost of general rates on the non-residential sector are already driving businesses out of the commercial and industrial areas of Canberra.Under the current regime, a block in Fyshwick with an unimproved capital value of $7,000 now pays around $35,000 a year in general rates. In comparison, an industrial block in Queanbeyan of similar value now pays around $6,000 in general rates per annum. “It is becoming more expensive to operate a small business in Canberra than it is in Queanbeyan, which is why some businesses are relocating across the border,” Ms Carter says.”Sharp increases in general rates on the non-residential property sector cast doubts on the credibility of the ACT’s 20 year tax reform program. Equity needs to be at the centre of genuine tax reform. Excessive taxation on non-residential property owners and business operators will limit private investment, particularly in property. Hence, a balanced and prudent approach to taxation is necessary.”The Property Council strongly supports the ACT Government’s commitment to urban renewal, and we would like to see a new vision for Canberra achieved. The Government’s commitment will only be realised through private sector vision and investment. A partnership approach is essential – something that will not occur if escalating general rates stymie investment and opportunity,” Ms Carter concludes.Media contact: Catherine Carter |M 0412 330 079|P 02 6248 6602