ARMED to the teeth with facts and figures to paint Western Australia’s rosy economic condition and future prospects, Premier Geoff Gallop faced a tough crowd at last week’s Property Council of WA luncheon.
The WA property sector has grown increasingly disgruntled with the Gallop Government’s penchant for increasing property taxes and the Property Council of WA has been an outspoken critic of Government, claiming that it is a big spending Government that views the property sector as a soft touch.
Since coming to power in 2001, the Gallop Government has increased its tax haul from both land tax and stamp duty on property, which it has lifted by 29 per cent in the past two years.
Recent Treasury figures show that the Government has earned $288 million in property taxes in the first two months of this financial year, 75 per cent higher than in the same period last year.
The bulk of Dr Gallop’s address dealt with WA’s economic highlights and its bright future, however, he finally turned to the hot topic of property tax.
While he acknowledged the property sector’s dissatisfaction with the level of taxation, Dr Gallop explained that the Government had limited avenues available to increase revenue to meet community demands on infrastructure and services and that Commonwealth grants fell short of keeping up with the State’s inflation and population growth.
“Many of you would argue – this is the State Government’s problem and you should not be penalised,” he said.
“I would argue that the unfair relationship between the Commonwealth and the State is a problem for the State as a whole.”
Throwing the spotlight back onto Federal taxation, Dr Gallop said stamp duty was just one part of the total cost of housing, highlighting that GST accounted to more than $23,000 on a new house and land package worth $235,000.
“This is nearly double the amount of all State taxes paid by WA home buyers and developers – $12,400 – on the same package.”
Dr Gallop said on the positive side the roll out of the State Government’s Business Tax Review over the next two years would benefit the property sector.
These benefits include various stamp duties being abolished, a land tax restructure, stamp duty relief for genuine wholesale unit trusts and the stamp duty treatment of syndicate and off-the-plan arrangements being amended.
