The ACT Budget handed down today is bad for business, bad for the property sector and would discourage investment in the Territory, according to the Property Council of Australia.
Property Council ACT Executive Director, Catherine Carter, says: “The Property Council has always supported taxation reform in the Territory, provided the reform leads to greater efficiency and fairness and does not further burden the property sector, which is already over-taxed.”
“The ACT Budget released today fails this test abysmally. Stamp duty in the ACT was Australia’s highest, but will now increase even further under arrangements announced today. A property owner paying stamp duty at the current rate of 6.75 percent today will pay 7.25 percent under the new regime, and will still pay 7.0 percent in five years’ time.”
“Commercial land tax has been abolished but this is no comfort because general rates have increased so much that the total amount paid will be significantly greater.”
“These increases have wiped away the savings to be made by the five-year reform on the abolition of insurance duty, and by the increase in the threshold for paying payroll tax from $1.5 million to $1.75 million.”
“The increased levies on commercial property in Canberra make the Territory an even less attractive place for investment. Just as international investors immediately shelved plans to allocate funds to Australian property markets in the wake of the Federal budget so, too, will interstate investors shun Canberra following the ACT Budget.”
Ms Carter says the ACT Government’s estimates on revenue did not stack up.
“In 2011-12 the Government received almost $30 million less in conveyancing duty revenue than it budgeted. And yet, it is budgeting for more than this for 2012-13,” she says. “We are expected to swallow the absurd rationale that if you simply put the rate of duty up, you’ll get more revenue.”
“The Property Council believes that, in fact, the Government will get less stamp duty revenue in 2012-13 than was budgeted for this financial year, making the revenue forecast wrong yet again.”
“Estimates for lease variation charge revenue are also a fiasco. In the 2011-12 Budget the Government forecast revenue of $22.3 million and, yet, to the end of March only $9 million had been received.”
“This revenue forecasting is nonsense. Research by the Allen Consulting Group makes clear that the charge is too high and is actively discouraging investment which, in turn, is negatively impacting government revenue.”
“This Budget sets out increases to utilities, general rates, stamp duty and the fire & emergency levy. The burden on households and businesses gets heavier and heavier.”
“It is hypocritical of the government to set aside money to market and promote Canberra as a good place to do business and invest in Canberra, yet impose uncompetitive fees and charges that make Canberra expensive and which will in fact discourage jobs and investment.”
For further information contact:
Catherine Carter, ACT Executive Director, 02 6248 6902 or 0412 330 079