State Treasury’s brief to the incoming Baillieu Government, the Blue Book, urges tax reform to drive Victoria’s competitiveness. The Blue Book has apparently been leaked to The Age. It strongly recommends lowering the burden of state taxes, particularly business charges and Stamp Duty.
“The Liberal-National Coalition should seize this opportunity for reform with both hands,” Prosper Australia Campaign Manager David Collyer said today.
“Don’t just reduce these taxes, Mr Premier. Remove them!
“There is a great appetite for the economic efficiency available from completely removing hard-to-collect and behaviour–distorting taxes in favour of proven measures we know are free of these disadvantages.
“Ending taxes that distort activity would give us a tremendous advantage vis-à-vis the other states. Victoria would be a magnet for economic activity.
Access Economics in its excellent paper Analysis of State Tax Reform prepared for the Financial Industry Council of Australia, particularly dislikes Motor Vehicle Taxes, Insurance Duties, Stamp Duty and Payroll Tax. It endorses the sheer efficiency of Land Value Tax, as does Treasury.
“Were Victoria to end Stamp Duty and pay for this by removing the owner-occupier exemption to Land Tax, it would drive the velocity of property sales and provide a useful spur to the owners of underused and undeveloped land.
“Stamp Duty is a vile impost that devastates homeowners who must sell due to unemployment, divorce or job transfer.
The Australian Housing and Urban Research Institute has just modelled the impact of a shift from Stamp Duty to Land Tax on Melbourne, using the parameters of the Henry Review recommendations. It commends the change on equity, efficiency and affordability grounds.
“With Land Tax, Government can turn the attention of entrepreneurs from the dark side – the over-investment in residential property and empty beggar-thy-tenant rituals of rent-seeking – to creating businesses, jobs and opportunities for all.
“Premier Baillieu has a resounding majority and three years until the next election,” Collyer said. “Reform undertaken NOW will have percolated through the state economy and be providing genuine and visible benefits, benefits this government could proudly and honestly claim as its own.”
“Carpe Diem! Mr Baillieu!”
Media comment: David Collyer david.collyer@prosper.org.au
