Making Canberra a fairer and better place to live is at the heart of the ACT Government’s progressive agenda and our long-term tax reform policy continues to win over experts across Australia and beyond.
A recent Productivity Commission report found that our long-term reform should be followed by other state and territory governments.
Prime Minister Malcolm Turnbull called the ACT Government’s tax reforms “brave” but many jurisdictions, including the Federal Government, have shied away from following the ACT’s path.
Our 20-year tax reform agenda will make taxation fairer and has already removed the taxes on insurance, reduced payroll taxes and reduced stamp duty on many Canberra properties.
The Productivity Commission’s report makes a series of recommendations to enhance national welfare and economic performance, including calling for all states and territories to move away from stamp duty on residential and commercial properties.
The recommendation suggests pursuing a broad-based tax on the unimproved value of the land – the ACT Government’s scheme. So far, our reforms have already cut stamp duty by $7,700 for a $500,000 home.
The ACT is leading the nation on tax reform and we will continue to phase out stamp duty over the years ahead, with this change helping to remove barriers to home ownership for younger Canberrans, increase mobility for other homeowners and putting the Territory’s budget on a fairer and more sustainable footing.
Mobility is a particularly important in the ACT. 2016 Census data shows that Canberrans move more regularly than people in other states and territories.
More than 67,000 Canberrans lived at a different address from where they were one year ago, making up 18.6 per cent of the ACT population. More than 47 per cent of the territory population lived at a different address to five years ago.
The Productivity Commission noted stamp duties on property transfers discourage people from moving and lead to less productive use of land.
The Commission also highlighted that using stamp duty to prop up state and territory budgets puts the tax burden disproportionately onto people who choose to move, and results in a more volatile revenue base which is at the whim of the property market.
The ACT’s is delivering our reforms, which take into account the needs and circumstances of vulnerable Canberrans and make our tax system fairer.