Page 2244 - Week 06 - Wednesday, 9 May 2012
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I was very pleased to hear that the ACT Property Council supports the changes—amongst others. The current regime suppresses activity, creates bubbles and distorts the market. It prevents the efficient allocation of our housing resources and does not fairly spread the taxation burden across the community. Removing the current stamp duty will help people find a house most suitable for their needs without having to pay at times prohibitive transaction costs.
The most efficient allocation of housing within the ACT will be very important if we are to become a more sustainable city. We do not want to have in place things like disincentives to downsizing for people who have had their children leave home and who would like to downsize. When we look at housing across the city, we have enough bedrooms; we just do not have the right allocation of stock. Whatever we can do to assist people to match with housing that better meets their needs is good.
There is significant evidence that the proposed change can increase levels of investment, both private and public. It is often said that we need to better value our major asset, which is, of course, land. The Greens support this sentiment and are looking forward to working cooperatively to ensure that this is realised. Tax reform is a different issue, but the proposed changes do make economic sense.
The difficulty in the change is the transitional arrangements that need to be there to implement such a change. As I said, this reform is significant. The way we balance the interests of those who have recently paid stamp duty, for instance, and the implementation of the new scheme will be challenging. The Greens are comfortable that the proposed 10-year implementation time frame is reasonable and a good starting point for a community discussion on how best to implement any new scheme. I would also say that the Greens are very keen to hear community views on this and assure the community that we will be very carefully considering any proposed changes to land taxes.
One further point in this area that I would very much like to stress is that we are concerned to ensure that there are appropriate concessions available to ensure we do not leave anyone who is genuinely unable to pay in those circumstances; we must make sure that we design any new scheme and transitional arrangements carefully to support those who may not be able to pay a higher tax bill. The review has gone to some lengths to consider the impact of the existing and proposed changes on those less well off in our community.
Just briefly on the question of residential land tax and the proposal to remove it, given the broader changes, the Greens agree that this makes sense in the circumstances, but we are very conscious that this will effectively mean some revenue leakage to the commonwealth. Also we are concerned that incentives for investment in property do come at the expense of homeownership and do have the potential to increase house prices. This has a flow-on effect to those less well off who are struggling to pay for housing. We should be looking at mechanisms to assist low income renters. This is one area that the Greens are very keen to follow up on, to ensure that any changes do not disadvantage this group.
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