Page 2715 - Week 07 - Wednesday, 6 June 2012
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MR SPEAKER: Yes, Mr Coe.
MR COE: Treasurer, what is the expected average residential rates bill in the 20th year when stamp duty is fully abolished?
MR BARR: We have outlined the first five years of the reform process. Where it will be in year 20 will depend on a number of other factors, particularly other changes in federal-state financial relations. The capacity to predict that far ahead exactly what the rates base will be at that point is not possible at this time, noting, however, that, if you were to look in 2012 dollars, members would be aware that the stamp duty across residential and commercial tends to generate around $300 million a year in revenue, and the commercial and general rates base is around $200 to $110 million a year. So if the existing level of volume of transactions and quantity were to continue at around those proportions, then over 20 years the transition would see stamp duty at zero and the rates base move to around $500 million. But in 20 years time, obviously, that figure will be larger because there will have been inflation in the economy—noting, of course, though, that the reason for a 20-year introduction is to ensure that there is a gradual phase-in and that there are not distortions in the market.
But ultimately that is what a broad-based land tax is: broaden the base and lower the rate. At the moment, nine per cent of households generate 25 per cent of own-source revenue. If the opposition believe that is fair, why did they take a policy to the last election to seek to reduce stamp duty? If they do not believe that anymore, let us hear it from them.
MR HARGREAVES: A supplementary.
MR SPEAKER: Yes, Mr Hargreaves.
MR HARGREAVES: Treasurer, in relation to the abolition of stamp duty, was the Property Council among those people calling for its abolition, and was the Liberal Party among those people calling for its abolition?
MR BARR: Yes, the Property Council have been on the public record on a number of occasions, along with the HIA and the MBA and a number of other industry groups, supporting the phase-out of stamp duty. Some want it phased out quicker. I note that the position of the Property Council is that they want the transition to occur over 10 years, not over 20. So they want the entire stamp duty transition to the rates base in 10 years. Some organisations have advocated for an even shorter time frame.
We have recognised that, in order to achieve a fair outcome and to be equitable to all Canberrans, given that the average household pays stamp duty once every seven years, over the course of a 20-year reform they would pay stamp duty two or three times if they remained in the city over that period. On that basis, we want to see the stamp duty that is paid over the 20-year transition period reduced so that the benefits of this change are shared evenly throughout the community.
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