Australia News LIVE: Strengthen stronger military ties with Japan; The NSW daycare sector will get a $ 5 million boost; Victoria’s construction industry supports the stamp duty review

As today’s editorial in The Sydney Morning Herald begins: “A much-needed revision of property taxes is finally underway.”

Our two main headlines have chosen to focus on stamp duty on their daily publishers. Here’s a taste of both.

State governments are shaping a new wave of tax reform, which could include a major revision of the housing stamp dutyCredit: Glen Hunt

Good release of the bell: Herald Publishing

This renewed drive for change is positive. But the property tax review will be complex and the NSW government must now ensure that the best possible path to reform is taken.

The disappearance of the stamp duty has been a long time coming. Criticisms of this obsolete rate, introduced in 1865, have existed for decades. All taxes impose an economic cost, but several studies have found that the effects of stamp duty on real estate transactions are especially wasted and uneven.

It has been accused of aggravating the crisis of housing accessibility in Australia and of deterring people from moving to accommodation that suits their needs. The stamp duty is a major source of income, but because it is subject to fluctuations in the real estate market, it can be volatile. This undermines efficient budget planning.

The 2010 tax review led by Ken Henry concluded that the stamp duty on real estate transactions is “incompatible with the needs of a modern tax system.”

There is an encouraging consensus on what should replace the stamp duty.

Read more here

Stamp duty reform should be the order of the day: The Age editorial

Economist Ken Henry ridiculed the stamp duty on housing transactions as a “diabolical tax”: clumsy, uneven, outdated and a friction for the economy. The case against it is overwhelming. It adds another impediment for first home buyers. Encourage current homeowners to over-invest in larger properties by renovating and expanding rather than relocating.

It penalizes those landlords whose circumstances, such as divorce, force them to sell and buy again. It is discouraged to reduce the workforce, which would free up larger homes for growing families. More broadly, economists ridicule their effect on the labor market, discouraging homeowners who might otherwise move suburbs or states to work.

In fact, in their 2010 seminal report on the Australian tax system, Henry and his colleagues were unequivocal about the stamp duty: it had to go. Instead, they recommended some sort of ongoing land tax. Only the ACT listened, starting in 2012 in a 20-year transition to replace the stamp duty with higher property rates.

In Victoria, despite strong arguments in favor of reform and the constant demands of all sorts of pressure groups and industry bodies across the political spectrum, our governments have not proposed an alternative system.

Read more here

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