Page 3893 - Week 12 - Thursday, 29 October 2015
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governments and replacing them in a revenue-neutral way with the most efficient and fairest form of tax available to this level of government, and that is a broad-based land tax in the form of municipal general rates.
This was, of course, the position recommended by the Henry tax review and the Quinlan tax review, and indeed by everyone who has looked at this issue of the relative efficiency of taxes in this country, probably for the past five decades but most particularly for the past three.
Mr Wall: Every one?
MR BARR: Yes, every report on this has reached the same conclusion as to which are efficient taxes and which are inefficient. The need for reform of state and territory taxes is well known. Every reputable economist in this country understands it and there have been countless inquiries, countless public forums and countless policy seminars hosted by our major media outlets. Most recently the Australian Financial Review and the Australian newspapers have again reached the same conclusion that has been reached time and time again. Treasurers around the country understand this. It would appear that the only people in Australia who do not understand the imperative of moving to a fairer, simpler and a more efficient tax system are the Canberra Liberals.
Why do we need to move to a fairer, simpler and more efficient tax system? Because stamp duties and insurance taxes are bad taxes. The ACT government has taken the lead in being the first jurisdiction in Australia to implement meaningful tax reform. There has been a lot of talk about this, over countless seminars, reviews and policy discussions, for some time, but the ACT, now joined by South Australia and, to a certain extent on some elements of reform, by New South Wales, is actually getting on with tax reform.
The government is cutting three taxes: stamp duty, insurance taxes and payroll tax, and we are replacing them by increasing gradually the most efficient form of taxation available to us. So three of the worst taxes that we levy are being cut and the most efficient tax we levy is being increased to compensate.
This government has cut stamp duty in every budget since 2012, and we will continue to do so. As stamp duty falls, it becomes less and less of a barrier to buying a home. This facilitates a fairer and better allocation of our city’s housing stock. It ensures that there is churn in our housing market and that government taxes are not a barrier to people moving to more appropriate housing, whether that is downsizing after your family has grown up and left home or increasing the size of your housing as your family grows.
In the ACT, at this stage of tax reform, the buyer of a $500,000 property in this city is now saving nearly $6,000 in stamp duty compared to before tax reform started. Those who are purchasing a $750,000 home are saving nearly $8,000 in stamp duty.
Turning now to insurance duty, under the ACT government’s tax reforms, duties on general and life insurance are being abolished completely. The duty on general
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