The land supply equation in Australia – flashing red danger signals for years – has finally come to the attention of federal Treasurer Scott Morrison, who is charged with the task of advancing national prosperity. He may even be prompted into action.
Notoriously well-connected Alan Mitchell is out today in the AFR with the latest Turnbull-Morrison government thought bubble: use tied payments to the states to increase the effective supply of urban land.
The federal government’s agenda is likely the removal of state-based ‘socialistic planner red tape’ alleged to be the sole cause of stifled supply and mind-boggling land prices in a country blessed by an abundance of space.
Fortunately, Mitchell sees the answer lies elsewhere. He suggests Morrison bribe the states to remove conveyancing Stamp Duty and pay for it by ending the myriad exemptions from State Land Tax.
Morrison is often described as the Treasurer for the Property Council of Australia, having served as their National Policy and Research Manager 1989-95. This is both unkind and accurate. The Abbott then Turnbull governments have consistently put the interests of the wealthiest landholders ahead of those excluded from home ownership and modest homebuyers who must commit their lifetime earnings to buy themselves shelter.
Stamp Duty is a vile impost that traps people in and out of housing and imposes staggering deadweight costs.
The re-election of the Barr ALP government in the ACT disproves the oft-repeated claim reform to property taxes will provoke such fury that any reforming party will be swept from government.
Treasurer Morrison can drive good public policy – if he is so inclined. The state governments are fully aware Stamp Duty causes real hardship – they have been told this repeatedly and in many inventive ways by their Treasury officials. A nudge from Canberra might be all it takes to tip them into action.