Higher GST ignores housing, inequity
The Abbott government must rebuild State relationships by assisting in the educative process of tax reform.
“The outsourcing of deficit pressures by Treasurer Joe Hockey has accelerated the need for state revenue reforms” stated Prosper Australia spokesman Karl Fitzgerald.
“State governments should not fall into line with the push for a higher GST. A fairer and more efficient revenue base sits under their feet. Land Taxes are the necessary tool to harmonise housing affordability with raising revenue.”
“Countless reports have advocated the move away from volatile Stamp Duties and towards a broad based Land Tax. If the states are to do the dirty work of tax reform, there needs to be some a supporting role from Canberra, in the form of a public education program.”
“A honeypot is offered for state privatisations, why not for deep seated housing reform?”
“Treasurer Hockey’s mantra that we ‘control your own destiny’ is thwarted by our young peoples’ inability to buy a home. If the Treasurer is unwilling to ‘leave our children behind’, he must begin to challenge those rent-seekers enjoying record capital gains in housing.”
“There is no free market in housing. The extensive tax breaks to property investors ensure that. A reformed Land Tax would help redress those enormous advantages. ”
“If politicians genuinely want to re-direct business activity into innovative areas, the crowding out of first home owners by investors must be wound back. Investors tower over first home owners at nearly 40% of all loans, up from 12% in the mid 80’s.”
“A Land Tax at just 0.7% on Victoria’s land values of $952bn would replace both the revenue Treasurer Hockey has removed from the states AND the current Stamp Duties and Land Taxes.”
“A reformed Land Tax would see a flat percentage charge replacing the current progressive brackets. All Victorian’s would contribute equally, according to the value of land they hold.”
“This would cost the average family home (and commercial property owner) $2,300 per annum. However, Stamp Duty’s $25,000 cost of moving would be removed. Citizens could shift closer to their work without penalty, proactively addressing the twin infrastructure and budget deficit pressures.”
“Rural landowners could be exempted and pensioners rebated.”
“The Napthine government has already shown they can engage in rent-seeking reform, with their taxi licensing amendments.”
“The challenge now is for Treasurer Hockey to rebuild bridges by advocating for the much more effective Land Tax over the regressive GST as the funding shortfall tool of choice.”