Page 3454 - Week 08 - Thursday, 23 August 2012
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government’s reform package can be questioned in relation to equity. The budget shows that instead of conveyancing duty being phased out, revenue from this tax increases through the outyears. There are also equity questions in relation to people and organisations who in recent times have undertaken transactions involving paying stamp duty and will now be required to pay increased amounts for general rates and possibly for conveyancing.
If you look at the Quinlan report—prepared by the former ACT Treasurer who said so famously in March 2005, “The government will squeeze investors till they bleed, but not until they die”—you can see where this government is coming from. A critical aspect of any tax reform is to consult with the community. The Treasurer offered consultation in his response to the Quinlan report; then he went ahead and introduced his reforms in any event. It was another failure of the government to consult with the community. So much for more openness and more accountability!
I note that other Labor jurisdictions have rejected the move from stamp duties to broader based land taxes. These views were summed up by the then Treasurer of South Australia when the Henry tax review was released in May 2012:
A broad-based land tax would be a punitive tax on families and households and won’t be supported by this government …
On balance the tax reform package is subject to question. Will it favour one group over another? Yes, it will favour people in organisations dealing with low-value properties. Will it disadvantage anyone or any group? Yes, it will disadvantage all those with residential properties valued over the land tax threshold, all those who deal with properties valued at more than $1.3 million, and people who want to downsize from properties which have a high value. Indeed, the reform package was so badly developed by this Treasurer that within 12 hours of the budget being presented he had to agree that two commercial transactions could proceed which otherwise would have been abandoned because of the imposition of increased stamp duty impost. While there are merits in reducing the reliance on transaction taxes, changes such as this should be implemented in a way that is fair and equitable across the community.
We have just had Mr Seselja speaking about the land use charge, the lease variation charge, more appropriately the land use tax. This government has had a major focus on putting in place the land use tax. This policy has been described as the change of use charge and the lease variation charge. In reality, it is a tax—nothing more, nothing less. Expectations were that this tax would raise substantial quantums of funds year on year, but the latest financial report, which sets out the preliminary results for 2011-12, shows that this tax was estimated to raise nearly $22 million, and then in coming years continually go up to become $23 million, $24 million, $26 million and $28 million. But did it raise nearly $22 million in its first year of operation? No, it did not; it only raised $8.7 million, a shortfall of nearly $14 million.
And that is not the worst outcome. When we look at the latest quarterly reports, there is a wonderful paragraph which says:
Taxation revenue, largely relating to housing market activity, was around $35 million lower than anticipated, reflecting a greater than expected softening of housing market activity, and the timing of the lease variation charge …
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