Page 3587 - Week 12 - Thursday, 19 September 1991
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The reality is that, given six or eight months, things will settle down again to the supply and demand situation. That is what dictates rental costs. It is what people are prepared to pay because of where they can get into and what they can get into. In the long term - although perhaps I should call it the medium term, because I would give it about six months - the effect will not be the passing on of this taxation down to the tenants; it simply does not work that way, except perhaps in the short term. Therefore, I have made it quite clear, from the time that this announcement was made, that I am prepared to support this tax.
I am prepared to support it for another reason, and that is that it is really an extension of a tax on speculation rather than a tax on productivity. When I use the word "speculation", I use it in a very broad sense, because I know that there are lots of people - and Mr Humphries has identified himself as one - who have saved up carefully and bought a property which they are using, in effect, as a superannuation system. I certainly have been in that boat on a previous occasion myself, and decided, for a range of reasons, to sell out. So, I have been in the landlord role as well, although I am not now.
I understand that there are lots of people around in Canberra, in particular, who actually have their rental property as a nest egg to look after themselves, and to be additional to their superannuation. Good on them. That is a very positive way to do things. But, at the same time, I think that, if, in the long term, we can extend this sort of taxation towards land and look at ways of reducing our taxes on productivity, we will, in fact, be able to make a major contribution to our community.
That is what the goal should be in initially setting up this taxation and in going through the anguish of bringing in what is perceived as a new tax, and what I believe is a new tax, even though I hear Ms Follett's argument that it is an extension of an existing tax to a different sector of the community. I certainly understand why she puts it that way, but I think it is not perceived that way. It is definitely perceived as taxing a new section of the community in a different way. I think that is why there has been an outcry about this. Whenever we find a new way to tax different people, they, of course, will feel that that is an unfair burden on them.
However, a number of people have described this tax to me as a wealth tax. I think that in some cases that might be true, but largely it is not true. Largely, the tax falls on people who are trying their best to look after their own situation for when they retire. We are aware of that; but, at the same time, it is a minimal tax and it has come at a time when interest rates have just fallen and, in fact, when landlords, even with this tax, are going to be far better off than they were some eight or nine months ago. I
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