The Financial Relations Agreement Bill, which is currently before the WA Lower House, proposes to include stamp duties in GST calculations.
This legislation, which levies stamp duty on top of a GST, amounts to a double tax for every single property transaction.
Attempts by the WA government to justify this additional tax imposition on the property industry by arguing that wholesale sales taxes will be removed might make sense for the purchase of a car, but their is no justification when levied against property transactions where wholesale sales taxes do not apply.
The claim by the government that similar taxes were levied in New Zealand when the GST was introduced there are totally misleading as stamp duties on property transactions were abolished when the GST was introduced there.
There is no doubt that the WA government is attempting to gain a direct financial advantage from the new tax system at the expense of business and the general community by introducing this new legislation. Thousands of small businesses that rent commercial property will be hit with rent increases when the increased taxation burden begins to bite.
I believe this new legislation breaches ACCC price exploitation guidelines as well as contravening the GST deal between the Federal government and the States. The government cynically believes it is immune from the ACCC’s strict guidelines which say the full effect of any tax cuts should be passed through lower prices.
The Property Council has asked the ACCC to investigate and, if the Commission does not have the power to act against a monopoly like a government, then its clout must be increased.
• Joe Lenzo is executive director of the WA Branch of the Property Council of Australia.
