CCIWA has today released a nationally significant report making a powerful case to reform one of the most economically damaging taxes — ‘Stamping out stamp duty’.
Underpinned by modelling conducted by the Australian National University’s Centre for Social Research and Methods, the report clarifies a highly practical option for economic reform.
For the first time, this report establishes that reform would improve not just economic efficiency, but also fairness. Lower-income households are punished the most by the tax on property transfers and so would benefit the most from reform.
The ANU’s model shows the lowest-income households allocate nearly double the proportion of their income to property taxes (5.5 per cent) compared with top-earners (roughly 2 per cent).
Making up 20 percent of the upfront cost of moving, stamp duty is an unfair barrier to Australians finding their most suitable and affordable home. Reform would ease the unfairly distributed costs, reduce commute times and strain upon infrastructure, and improve affordability and choice for the workforce. It would also support the efforts of regional communities to attract workers.
Critically, our report presents comprehensive options to resolve political and financial barriers to reform, including a staged opt-in approach. Reform is unlikely to be achieved without Federal Government support.
As world economies emerge from COVID-19, Australia faces ever-fiercer competition for global skills and investment. Reform will improve labour mobility, competitiveness and facilitate the regeneration of town centres and cities.
‘Stamping out stamp duty’ builds upon widespread expert support, by the Henry Tax Review, ACOSS, St Vincent de Paul, UDIA, the OECD, the IMF and the Productivity Commission.
With State and Federal treasurers meeting tomorrow (Friday, July 22), they have in front of them a compelling case to reform an unfair, inefficient and regressive tax that holds back Australia’s economy, community and businesses.
Of course there are short- to mid-term impacts that make the change difficult, but the long term dividends are compelling. All major reform has its challenges and this is the right step forward for our nation.
For the latest economic reports see CCIWA’s Economic Insight page.