LAST October, the WA Government introduced the Financial Relations Agreement Bill which, among other things, introduced the levying of stamp duty on GST-inclusive property transactions.
In effect, a tax on a tax.
The Property Council campaigned against this government move which we believe is an attempt to gain a direct financial advantage from the new tax system at the expense of business and the general community.
In his response to the Property Council, the Premier argued the application of stamp duties to GST-inclusive prices or values was necessary to protect the State’s revenue base and that any reduction in stamp duty revenue would not be covered by the Commonwealth’s guarantee that State budgets would not be worse off in the transition to the new tax system.
Revelations that the government has extracted windfall millions from WA’s property owners and investors through its stamp duties have given lie to the claims it needs to apply stamp duties on top of GST-taxed transactions.
This “suck it and see” approach by the government to tax reform is contrary to the spirit of reform which is aimed at abolishing all indirect taxes including stamp duties in return for a growing GST revenue base.
In light of this latest revenue windfall, the government should immediately withdraw its move to levy stamp duty on GST-inclusive property transactions – a move that is clearly aimed at profiteering from the new tax system.
• Joe Lenzo is executive director of the WA Branch of the Property Council of Australia.
