THE Property Council has protested strongly to the Australian Competition and Consumer Commission at the WA Government’s proposal to charge stamp duty on GST-inflated prices, effectively imposing a double tax.
In a written protest to the ACCC, Property Council national Executive Director Peter Verwer said: “The Property Council understands senior Treasury officials from every State and Territory recently met and agreed to implement this policy across Australia.
“The Property Council vehemently opposes such a policy because we believe it breaches the ACCC’s strict price exploitation guidelines given the aforementioned governments are using their monopoly power to raise revenue from the tax system.
“The ACCC’s guidelines clearly state: ‘The Commission’s focus on price changes rather than levels emphasises the point that the New Tax System changes are not to be seen as an opportunity for businesses to raise profits, even where profitability may be low’ (Clause 27, The Commission’s Focus In Evaluating Prices).”
Mr Verwer pointed out that the effect on business and the community would be significant. Assuming an 8 per cent GST-induced increase in the price of an average $180,000 Perth home, stamp duty would rise to $5608 from $5090 under this policy.
“The increased taxation burden on commercial property landlords could also trigger rent increases, a move that will harm virtually every small business in Australia given the majority lease commercial space.
“Clearly, both governments are raising revenue at the expense and the general community and the Property Council believes it is appropriate for the ACCC to investigate this matter,” Mr Verwer said.
Informal discussions with the ACCC since this complaint was lodged indicated that they would offer a guiding hand to the States rather than come down forcibly to protect the consumer. The Property Council await a formal determination with interest.
