ANZ Bank CEO Phil Chronican recently raised concerns about the media’s “irrational obsession” with property investment and wants to see a debate about taxes that increase house prices instead.
Mr Chonican’s comments came just days after Prime Minister Tony Abbott called for debate about federalism and the GST.
Mr Chronican told the Australian Financial Review that he couldn’t understand why the Reserve Bank of Australia was looking at imposing new restrictions on lending to property investors.
He said the nation would benefit from a debate about the favourable tax treatment for investing in property and a better understanding of the risks involved.
“I do worry that some people behave as if housing is always a one-way bet. I think there is a bit of an irrational obsession with housing as an investment class. I agree with that. For many investors, they would be better off in assets other than housing.”
REINSW has pushed for a tax debate for several months and is excited by the suggestion that Mr Abbott is ready to conduct a review of the GST, which should lead to an evaluation of the onerous taxes on property.
“We would be supportive of an increase in the GST rate if stamp duty, land tax and other narrow based, inefficient and inequitable state taxes were removed. We also believe that payroll tax is an inhibitor to employment and should be abolished,” REINSW Deputy President John Cunningham said.
“The Independent Pricing and Regulatory Tribunal has described them [land tax and stamp duty] as inefficient, and REINSW believes it should be abolished in a modern tax system.
“If there is such a thing as a good tax system, it is broad based so as to provide government with its revenue but not impede or deter investment.
“Now is the time review the GST. But state tax system is inhibiting our economic growth and must be overhauled,” Mr Cunningham said.