Ditch stamp duty, widen GST and close tax loopholes for rich
STAMP duty should be ditched, the GST widened and tax loopholes for wealthy Australians should be closed.
These were some suggestions for tax reform from the welfare sector and housing industry, which weighed into the growing debate this week.
After Treasury Secretary Dr Martin Parkinson called for a national conversation on the GST and tax system, the Housing Industry Association and Australian Council of Social Services answered the call.
The discussion of what to do to ensure the Commonwealth can actually pay for the services it provides, comes as Treasurer Joe Hockey prepares his first budget, due next month.
Among the changes the housing industry would like to see is for the federal government to put its weight behind an end to state government-controlled stamp duty taxes.
HIA chief executive of industry policy and media Graham Wolfe said the tax burden placed on the residential building industry was "excessive", and were "inevitably passed on to new home buyers".
"Australia needs a solid level of new affordable housing stock to house our growing population," he said.
"But the taxes levied against new homes make the affordability challenge a bridge too far for too many families.
"Stamp duty is not only an inefficient tax, it acts as a disincentive against employment mobility, and home 'right-sizing'."
While the welfare sector and many economists would like to see an end to negative gearing tax loopholes, ACOSS chief executive Dr Cassandra Goldie said the Abbott Government should look to the Henry tax review for options.
"We need a national discussion about what services governments should provide and how they can find the revenue to pay for it," she said.
"For ACOSS there are two core principles when it comes to taxation: that tax should be based on people's ability to pay, and that those at the bottom of the income ladder should not bear the burden of balancing the budget, whether through spending cuts or higher taxes."
Dr Goldie said while the government faced a serious revenue problem, it was caused by weak tax collections, not higher spending.
"It is now clear that, as ACOSS warned at the time, the eight successive income tax cuts during the 2000s were unaffordable," she said.
"The tax base cannot be repaired simply by avoiding tax cuts for a decade and leaving income tax 'bracket creep' to do all of the work."
Dr Goldie urged the government not to let the previous government's tax review be left to "gather dust".