Leading South Australian property industry figures have backed calls to increase the GST – providing a raft of state taxes is abolished.
The GST debate re-surfaced this week when independent MP Bob Such, who is absent from parliament battling a brain tumor, called for an increase to the GST.
Treasury Secretary Martin Parkinson added more fuel to the debate yesterday, suggesting indirect taxes like the GST should be increased or broadened to reduce Australia’s reliance on income taxes.
“Now is the right time for a change to the GST – not excessive, or without concern for the lower income earners,” Such said in a letter published in The Advertiser.
“The increase in GST will allow the removal of many of the taxes that impede employment and impose hand-brake charges – land tax, stamp duty – that hold back our states, territories and the commonwealth.”
President of the Real Estate Institute of South Australia, Ted Piteo, agrees.
“The government needs to take a serious look at state taxes, have a roundtable conference with the federal and cut this inefficient red tape that chokes the economy,” he said.
“If we were to lift the shackles of state taxes think what it would do for the economy, people would be free to move and build whenever they liked and have no fear of $50,000 in stamp duty.”
The Housing Industry Association’s Executive Director SA, Robert Harding, said the GST debate was a top priority as the local industry battles sluggish conditions.
“We need to have that debate and we need to have it urgently, while there are many factors to be considered state taxes must be reviewed,” Harding said.
“Stamp duty, payroll tax and land tax are far too high in South Australia and I was happy to hear the treasurer comment something similar.”
Neither the State Government nor the Opposition support changing the GST rate.
The debate was further fulled yesterday, however, when Commonwealth Treasury Secretary Martin Parkinson raised the proposal during a speech in Sydney.
Parkinson said hikes in indirect taxes – such as the GST and and fuel excise – would be needed to offset an unsustainable reliance on income tax earnings.
The federal government moved quickly to hose down the debate.
Deputy Liberal Leader Julie Bishop said widening the GST base to areas like health, or increasing the rate from 10 per cent, is not on the government’s agenda.
“We’re not changing the GST,” the foreign minister told ABC Radio today.
Back in South Australia, the HIA’s Robert Harding said the industry needed a confidence boost after a slow period in the lead up to the state election.
“From December in the lead up to the election we saw a drop off in the building sector and the same goes for the renovation sector.
“Their order books beyond May and June are looking slim but now with more certainty surrounding the government we hope that things will begin looking up given sustained low interest rates and competitiveness of the market” he said.
Recent figures show politics isn’t the only drag on investment in new construction.
RPData quarterly figures for March show investment in new property remains stagnant.
The data shows Adelaide has the lowest gross yield for rental properties in mainland Australia. Investors make up just over 38 percent of all new housing finance commitments.
Home values are also sluggish.
RP Data results from March show a 1.2 percent increase in Adelaide’s house values for the quarter, compared to the national figure of 3.5 percent.
– with AAP
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