The new Malcolm Turnbull-led government has been flooded with suggestions in recent weeks on what changes should be made to the tax system, with negative gearing and stamp duty proving to be popular topics of conversation.
The Urban Development Institute of Australia (UDIA) is the most recent body to enter the discussion, advocating for something to be done in the area of stamp duty.
“Inefficient taxes and charges are dragging on economic growth and productivity, holding back jobs, and worsening Australia’s housing affordability crisis,” UDIA national president Cameron Shephard said.
“For example, stamp duties are well known to be among the least efficient and most economically damaging taxes available to governments, and there is a strong and growing consensus across the community about the need for governments to replace them with something better,” Shephard said.
Shephard said stamp duty was having a detrimental effect on the supply and affordability of housing in Australia as the cost makes it prohibitive for people who would otherwise like to relocate.
“They reduce labour mobility and productivity by locking people into a certain location, and along with other high up front taxes and charges, reduce housing affordability and the supply of new housing,” he said.
“In contrast, the GST and taxes on the value of land are widely recognised as being much more efficient from an economic perspective, particularly when applied across a broad base.”
While the UDIA favours GST over stamp duty on houses, Shephard warned that any expansion should not come with an increase to its current 10% mark.
“Increasing the GST by just a few percent could result in tens of thousands of dollars in additional tax on new homes, which would push up prices further and reduce the supply of new dwellings.”
According to media reports last week, changes to negative gearing could be on the table following a meeting between the government, business groups, unions and welfare groups.
"There was a very, very strong agreement that [negative gearing] concessions needed to be looked at," Business Council of Australia chief executive Jennifer Westacott told the Sydney Morning Herald after the meeting.
Property Council of Australia chief executive Ken Morrison had previously called for the Turnbull-led Coalition to go after stamp duty.
“Getting rid of taxes that hinder growth and add to the cost of living, with stamp duty being one of the worst offenders, should be the end result government is aiming for,” Morrison said.
According to media reports last week, changes to negative gearing could be on the table following a meeting between the government, business groups, unions and welfare groups.
"There was a very, very strong agreement that [negative gearing] concessions needed to be looked at," Business Council of Australia chief executive Jennifer Westacott told the Sydney Morning Herald after the meeting.
