IT’S that time of year again, when all the wailing and gnashing of teeth keeps us all in a miserable state.
Yes, that’s right, its budget time.
This year, again, on the State Budget front, most of the complaints come from the property industry, where stamp duty has been increased again, ensuring that Western Australians pay the most in the country at up to 6.3 per cent at the top rate (above $500,000).
After a nasty shock early in this term of government, Eric Ripper has made sure the rise is more evenly spread than just those with Dalkeith mansions, but with a sliding scale and percentage-based formula it still means the rich pay more for the luxury of buying a home.
While WA might have the highest rates it is not unique in its moves to raise them.
So does the property industry have a right to bleat about this?
Firstly, if you think we are over-taxed as I do, then yes, it is worth complaining about.
The problem is finding someone who will listen.
At a State level Mr Ripper has few choices if he wants to raise more money to pay for things such as the Mandurah Rail line. That project is so visionary Labor could hardly be accused to pandering to the electorate because there probably won’t be enough users to justify the line’s existence for at least 20 years.
The States have been beholden to the Federal Government since they did a deal to remove a raft of taxes in return for payments from the GST.
Of course, the Federal Government has not been all that accommodating, preferring to allocate the money where it feels fit, and WA appears to lose out when it comes to the Commonwealth’s largesse.
So we’ve had a new tax, the GST, replaced some old taxes but increased the tax hike by more than the tax cuts we got at the same time. Now we get another tax increase to cover the gap, and so it goes on.
It all sounds pretty bad, but I keep wondering if this isn’t a Federal Government issue. Canberra has tightened the screws so badly on taxes and what it pays the States that it leaves the States little option. Yet Canberra keeps telling the States that health is their problem.
There is another factor in play on this issue: the heat in the property market.
While real estate agents might not like it, the Reserve Bank, among others, has been concerned about the bubble in property prices. So much so that there has been speculation the RBA could raise interest rates.
One way to avoid that is to cool the property market with other means, and stamp duty is one such weapon, even if that was not the intention of those implementing it. It certainly impacts at the acquisition end, rather than committing those with an existing mortgage to higher fees – so it puts the pain barrier at the right place.
The problem with this, of course, is that the barrier will remain long after it’s needed and, of concern to the property industry, may impact on an already cooling market which, overheated or not, is still an economic engine in WA. And, of course, the State Government needs to make sure it is not discouraging business through this tax, including the attraction of newcomers to WA – all of who will want to buy a house.
A wanton use of initials
WE received a wonderful response from our special lift-out last week, the Legal Elite.
Apparently we had tongues wagging, as is always the case when you try to pick winners in any field. Thanks must go to all those who participated in our poll and helped us put together a credible result.
There is one small erratum I need to address.
Among the runners up to Malcolm McCusker QC in the barristers’ category we accidently gave the title of Queen’s Counsel to Antoni Lucev, Paul Mendelow and Leslie Stein. We also named Matthew Zilko as a QC when, in fact, he is a Senior Counsel, the title conferred since Labor took office in WA.
We always knew we had to be careful of such slips when dealing with the legal profession but weren’t prepared for the sensitivity of one barrister, who failed to make the list and threatened to complain to the Press Council about the aforementioned errors.
I am not sure that mistakes made in the production process warrant such action or what the actual complaint might have been (wanton use of initials?), but we thought it might almost be worth it for the publicity.
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