Newspaper article The Daily Mercury (Mackay, Australia)

Dump Stamp Duties

Newspaper article The Daily Mercury (Mackay, Australia)

Dump Stamp Duties

Article excerpt

THE Treasury boss Dr Martin Parkinson has backed a move to wind back or abolish real estate stamp duties, saying they made it hard for workers to move west and north to take advantage of the mining boom.

Asked at an Australian Industry Group forum which taxes were the biggest drag on productivity, he nominated state taxes on housing that he said inhibited economic adjustments, awhether they be individual workers moving from the Illawarra to Queensland or Western Australia to work in the mining sector, or whether a firm is trying to restructure its businessa.

aWe need to encourage change, not to stand in its way. That's why I make specific reference to state governments,a he said.

New South Wales made $3.9billion from real estate stamp duties in the year to June, about one third of the national total.

Abolishing it could be paid for by increasing the GST by a quarter, from its current rate of 10% to 12.5%.

The Henry tax review reported aideally there is no place for stamp duty in a modern tax systema.

It found these discouraged property turnover and penalised property improvements.

aThe only positive feature of stamp duty a its relative simplicity a has long since ceased to justify its continued use in the face of the costs it imposes on Australian society,a the review said, recommending they be replaced by a broad land tax.

Professor Neil Warren, who reviewed state taxes for the Independent Pricing and Regulatory Tribunal in 2008, said it was acknowledged by the states that stamp duties should go but the transition was difficult.

aWhat about someone who has just bought a house? Does she have to also pay the replacement tax? If so, she is taxed twice,a he said. …

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