The Australian Council of Social Service today released a policy brief highlighting the economic benefits of a switch from stamp duties to land tax.
The case for tax reform: Stamp Duties and Land Tax calls on the Commonwealth to support the states to design and implement the change, including by putting some revenue on the table to help with transition arrangements.
“If the goal of tax reform is economic growth, then the best reform option is a switch from stamp duties to efficient land taxes,” said ACOSS CEO Dr Cassandra Goldie.
“This necessary reform should be implemented before consideration of further tax cuts to individuals or companies, at a time when governments have a serious revenue problem.
“The case for personal income tax cuts in the current environment is weak. The combined effect of eight successive tax cuts over the past decade is that people are now paying lower tax rates than they would have been before the cuts, and that will remain the case until about 2020.
“We understand that this will be a politically difficult reform, but it is a fundamental one that will require leadership. We also recognise that low-income earners and those who are asset-rich and income-poor, such as farmers and retirees, would be impacted and might need to be compensated. For instance, owner-occupiers who had recently paid large stamp duties could be given credits to make the system fair in the interim.
“The federal government cannot abrogate its responsibility here. If the Prime Minister is serious about a growth friendly Budget he needs to allocate some funds to support the states and territories to steer the path towards a broad based land tax in the interests of economic growth,” Dr Goldie said.
Media Contact: Fernando de Freitas – 0419 626 155
ACOSS POLICY BRIEFING: The case for tax reform – Stamp Duties and Land Tax.