Page 3345 - Week 12 - Tuesday, 17 September 1991
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Land Tax
MR HUMPHRIES: My question is addressed to the Treasurer. I refer her to an article in today's Melbourne Age concerning the Victorian position with land tax. The Victorian Premier is quoted in an article in that paper as having said:
... as people are considering whether this is the time to reinvest, they know that at least two things, land tax and WorkCare (costs), will continue to go down.
My question is: Firstly, does the Treasurer acknowledge, as her colleague in Victoria acknowledges, that the imposition of land tax is a disincentive to invest, in this case, in the ACT; and, secondly, does she see a long-term goal of her Government being to reduce the level of land tax applicable in the Territory in order to encourage investment?
MS FOLLETT: I should say at the outset that I have not seen the Melbourne Age article that Mr Humphries has referred to in his question. Nevertheless, I think I understand the gist of it. Mr Humphries has asked whether land tax could be regarded as a disincentive for investment. If that were the case, it would be a disincentive that is shared by every State and Territory in Australia.
It is a fact that land tax applies to investment property throughout the length and breadth of Australia, and that, if it on its own were to be regarded as a disincentive, we should perhaps have seen that reflected in investment levels in those States where the land tax is high. I am not aware that that is the case, and I am particularly not aware that it is the case in Queensland where I think the land tax is amongst the highest, if not the highest.
So, I think that, as far as investment goes, in land and in anything else, there are a range of factors that potential investors must take into account. Not least of those factors is, of course, the capital gain that they will get on their investment. I know that that is a big factor in residential investment decisions. And, of course, there is also the taxation position that their investment will put them into. Again, the residential investment puts investors into a very good taxation position. I believe, from the reading that I have done, that that is another key factor in their making a decision on whether or not to invest in land.
Mr Humphries asked further whether it would be a long-term goal to reduce the level of land tax. Along with every other leader in every other State or Territory, I would like to reduce all taxes; but the fact of the matter is that governments face a continuing, if not expanding, requirement to provide services to the community. And, at
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