Support for a debate on Australia’s taxation system has gathered pace following outspoken comments by Treasury Secretary Martin Parkinson. REINSW has backed calls for a review of the entire taxation system in Australia.
In a speech to the Sydney Institute, Mr Parkinson suggested the Government consider lifting the GST.
Reserve Bank of Australia Governor Glenn Stevens later backed Mr Parkinson’s comments in his own speech to the American Chamber of Commerce (Qld) in Brisbane.
REINSW CEO Tim McKibbin said that REINSW has long been calling for a review of the taxation system in Australia.
“We’ve been saying for quite some time that property taxes are discriminatory and inefficient and affect purchasing decisions,” Mr McKibbin said.
He pointed to the Independent Pricing and Regulatory Tribunal (IPART) Review of State Taxation issued in October 2008. The review described purchaser transfer duty - which at the time of the review was ranked as the second biggest contributor to the State’s own source tax - as being “among the least efficient of the NSW taxes”. Land tax took fourth place.
“While it may be politically unpalatable to look at an increase in the GST as a substitute for the lost revenue for the abolition of the state taxes, we need common sense and commerciality to triumph over politics,” Mr McKibbin said.
“There are numerous bodies now calling for this debate and government cannot continue to ignore it.”
The Housing Industry Association (HIA) Chief Executive Industry Policy and Media Graham Wolfe also welcomed the news.
“In Sydney, more than 40 per cent of the cost of a new home is made up of direct, indirect and hidden taxes,” Mr Wolfe said.
“Incredibly, almost 11.5 per cent of the total combined local, state, territory and Commonwealth Government tax revenue is levied from housing. Around half of these taxes are inefficient, including stamp duty which is one of the most inefficient taxes in Australia.”