The Property Council of Australia today expressed strong disappointment in the lack of vision shown by the ACT Government in its 2005-2006 Budget.
Property Council Executive Director, Catherine Carter, says the Government had a tremendous opportunity to abandon a range of inefficient business taxes to make Canberra the most business friendly, tax efficient jurisdiction in Australia.
“In particular the ACT Government had a great opportunity to remove or phase out stamp duty on commercial conveyances. Duty on commercial conveyances is the most inefficient, detrimental tax applying to investment in the property sector. This tax was due to be abolished as part of the 1999 Intergovernmental Agreement (IGA) on reform of Commonwealth/State financial relations,” Ms Carter said.
“What we have instead is a protracted timetable for the removal of other business taxes, also identified under the IGA such as stamp duty on leases. That timetable extends to 30 June 2011. The total revenue raised by these other inefficient taxes is relatively insignificant in terms of total revenues. Therefore at least there should have been a commitment in this Budget to remove those taxes now.
“What we see in this Budget is essentially no significant tax relief. In fact, revenues from taxes are estimated to increase. At the same time GST revenues paid by the Commonwealth to the ACT Treasury are projected to increase as well despite a slowing economy.
“This is a bad deal for ACT taxpayers and ACT business,” Ms Carter said.
The Property Council of Australia believes that the ACT Government had a tremendous opportunity to show some leadership.
Revenues received by Government can actually increase by encouraging investment and making Canberra more competitive. The way to achieve this is to eliminate inefficient business and property taxes.
“The only significant tax change we’ve seen in this Budget is an increase to rates. This will have an adverse impact on all Canberra residents and commercial property owners. The increase in rates comes at the same time as significant increases in unimproved land values.
“The ACT Government had the opportunity to deal with tax reform, rather than putting it off for another day.
“The ACT Government at some point will need to listen to the business community and focus on implementing a competitive tax regime for the benefit of the entire Canberra community,” Ms Carter said.
Catherine Carter, Executive Director, 02 6248 6902 or 0412 330 079