Stamp duty still unpopular at Treasury post-Henry

Australian Treasury boss Martin Parkinson has backed a move to wind back or abolish real estate stamp duties. Like his Treasury predecessor Ken Henry, Parkinson sees stamp duty as making buying and selling houses more expensive, and more significantly inhibiting mobility required for a growing economy.

They make it hard for workers to move west and north to take advantage of the mining boom, Parkinson claims. The Age correspondent Peter Martin notes he was asked at a Canberra forum which taxes were the biggest drag on productivity.

Parkinson nominated state taxes on housing, which, he says, inhibit economic adjustments, ''whether they be individual workers moving from the Illawarra to Queensland or Western Australia to work in the mining sector, or whether a firm is trying to restructure its business''.

''We need to encourage change, not to stand in its way.

"That's why I make specific reference to state governments,'' he told the conference.

Victoria made $3.6 billion from real estate stamp duties in the year to June, and NSW buyers were taxed $3.9 billion dollars last year.

It’s been estimated abolishing the tax could be paid for by lifting the goods and services tax from % to 12.5%.

Martin's report notes the Henry tax review reported that ''ideally there is no place for stamp duty in a modern tax system''. It found property stamp duties discourage turnover and penalise improvements.

''The only positive feature of stamp duty - its relative simplicity - has long since ceased to justify its continued use in the face of the costs it imposes on Australian society,'' the review said, recommending they be replaced by a broad land tax.