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Raising GST not the only answer to binning stamp duty

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Australian Broker | 15 Jul 2015, 06:14 AM Agree 0
A new paper argues that raising the GST is not the only answer to abolishing stamp duty, which is widely known as Australia’s most inefficient tax
  • SEQ Broker | 15 Jul 2015, 10:07 AM Agree 0
    Great, So we will end up with Stamp Duty still in place, quarterly rates bills (here in QLD) which are some of the highest in the developed world (My $280K investment property has $3600 per annum rates inc Water - my partners investment in Blacktown Sydney just over half that) and on top of that another tax bill. Stamp duty is high I agree. But only 2nd home buyers pay it (QLD) or First home buyers who are wealthy enough to buy property over $650K ish i.e. People who can afford it. No one likes the stamp duty but why transfer this tax from people getting a benefit from paying it to people who won't.
  • BJ | 15 Jul 2015, 11:37 AM Agree 0
    1. Investment decisions based on a taxation outcome is a fundamentally flawed strategy.
    2. If that investment does not stand the test i.e. real return net of costs, tax, inflation and risk reward, don’t invest.
    3. If you are paying tax there is a reasonable chance you’re making money.

    Now, SEQ Broker, as for “some of the highest in the developed world”. Some options open to you are to invest elsewhere, (alternate jurisdictions) potentially lower costs, offset against exchange controls, exchange risk (cost of hedging if you are that sophisticated) and all the legal and often complex, disastrous outcomes and the inevitable appalling service level, for which rates and taxes are paid.
    As I posted yesterday and I will say it again,
    What would give some balance, is a survey of those renting and unable to accumulate a deposit (those without a voice). One would expect a very different result/findings e.g. Why should those unable, as a result of lower wages, employment, subsidise those of us with the ability (good fortune or otherwise) to purchase and invest in property.
    These grandstanding statements “the majority of Australians” is quite frankly insulting to those thinking, independent Australians without a barrow to push.
    I am convinced, that most professional advisers would read any report “commissioned by The Property Council of Australia” with the level of scepticism it rightly deserves.
    Continue to preach limited views on taxation reform from that shallow grave and focus that narrow argument on the removal or amendment to stamp duty. True taxation reform will undoubtedly come as a result of a broad review, which will impact on all working Australians and dare one say “we will all wear the pain”, some unfortunately more than others.
  • SEQ Broker | 15 Jul 2015, 12:15 PM Agree 0
    Reasonable Point BJ. I agree with your investment advice. However why should those poorer people support us wealthier people is a flawed argument. I lived in a shed for a time to support my investment. Wealthy people have often taken risks, worked harder, had a go and have spent dollars educating themselves and IMO deserve a fiscal reward for their efforts. How many poor people make a choice not to go for it, not to commit, not to try, not to educate a country where there are free options for most of this. I myself was the beneficiary of some free education courtesy of the govt, when I became unemployed during a previous career. I now have a diploma and use it to make a modest income - I had a go. Why should poor people pay rent to a wealthy (er) person, because they choose to!
  • BJ | 15 Jul 2015, 12:52 PM Agree 0
    SEQ Broker, hats off to you for the level of success you have achieved. The system which allows those of us with wealth/create wealth (each will have their own measurement of the same) is in fact far from a level playing field providing opportunity for all and the “had a go”. Trickledown economics is as we now know or should appreciate is a failed system.
    How wonderful and I say more so, if we as a country, truly appreciated “what having a go” translates. Failing to succeed financially cannot be seen as a systemic human condition for those who have failed. Are these very same renters failures, I think not. Rather than espouse the virtues of those Joe averages, working three jobs, educating their children so that they may succeed where the parent did not (financially speaking) but otherwise hugely successful parents. The numbers graduating from universities, yes those driven as a result of sacrifice on the part of those renting parents are thankfully on the rise. With respect to your views, it is simply wrong to suggest that a wealthy person has worked harder and had a go. If fiscal reward is the only yardstick, than the country is in trouble.
    Thankfully some of the most interesting and successful people which I have had the pleasure of dealing with, have spent their life in the pursuit of betterment and adding to society i.e. educating, healing and removing cataracts. Their wealth:-immeasurable
  • SEQ Broker | 15 Jul 2015, 01:41 PM Agree 0
    Thanks BJ. I also agree that fiscal reward is not the only yardstick. This is about taxes. I would hope fiscal surety is closer to the yardstick. And when I say had a go I mean it. To save my deposit, unbeknownst to my employer, I slept at the office. I can site numerous examples of others making sacrifice so they can have a go. Also, I recognise that not everyone who has a go is a success. My mentor has 11 goes before making it. He chose not to give in. I recognise that housing affordability is a social issue, not just a fiscal issue. I also recognise that my children will likely face more difficulty than myself in achieving the dream of home ownership. Everyone has rented at some stage, even the wealthy, so renting does not define you as a failure. The government cant afford to house us all and we as a people wouldnt ask them to.
    In retort to your survey point. yes ask the survey, but also ask what car they drive, what TV they have and what consumer debt they have entered into for their lifestyles. I am fortunate enough to have an implicit understanding in this area. I could not afford to rent and save at the same time - so I adapted. How many potential borrowers have you seen that dont have sufficient deposit, but have a HSV in the driveway. If socialism (I suspect that is where you are coming from - could be wrong) is proposing an attempt to save the irresponsible from their fiscal mistakes - have a closer look, we are already there.
  • BJ | 15 Jul 2015, 02:28 PM Agree 0
    SEQ Broker: Having a social conscience does not translate to being a socialist. I suspect that in your eagerness to save that deposit you declined an opportunity to live or understand those terrible socialist countries, we must for the sake of falling in line with the sheep say “we understand socialism as the evil beast”. In any event that debate I am sure is mute.
    Back to the issue. Australia is in dire need on an enema. Tax reform is required and does necessitate a good hard look (with courage I may add) at GST, Property Taxes, Negative Gearing, Superannuation and a host of others, however, I consider we are so short sighted that any tax that hits “my” wallet will be a hard ask.
    Inept and fiscally irresponsible governments and an abject lack of leadership within the political establishment being all sides of politics is a serious issue here. We vote ourselves into money or the perceived opportunity it may present.
    We as a nation live well beyond our means and have done so for a considerable period of time and it starts with the individual and household debt. When uneducated, ill-informed punters, posing as advisers make sales recommendations based on irrational, without substance sales pitches (well greed is good) get in now they won’t last long, any wonder the smart money is already out. A Ponzi scheme can extend to national debt.
    Fortunately opportunity passed my way, by good luck or whatever the dice rolled in my favour. But my social conscience has been hardened as a result, like you SEQ Broker, to commit, sacrifice and forgo much.
    “There but for me go I” sounds great at a keynote address but underlies a more serious issue “what is mine is mine and what is yours is mine also, you just don’t know it”. DEBT
  • SEQ Broker | 15 Jul 2015, 03:11 PM Agree 0
    BJ - I agree with that. Just tax those that are getting the benefit is what I am saying.
    Change, not just the tax system, the voting system as well. Make those of apathy forgo their vote by making voting not compulsory. Then governments can make some hard choices because all of the entitled wont naturally vote left because all they care about is their entitlement. Any government that calls it like it is is DOOMED. Basically a right wing government will need to get in, in a majority government (something we havent seen in so long it is the cause of a whole range of problems)'make the required changes and be prepared to be shown the door afterwards.
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