Land taxes are apparently a hot topic for debate at the years NSW Labor annual conference.
New sweet-talking Prime Minister Malcolm Turnbull even said the formerly unspeakable words on national television over the weekend (at the 6.30minute minute mark). Though he says while it is a great policy economically, it is politically 11 out of 10 in terms of difficulty. No $hit. When your voter based is dominated by homeowners, and your party made up of the country’s wealthiest landowners, you ain’t got a chance.
In NSW just the exemptions to the current 1.6% (2% over 2.5million in value) land tax amount to $700million per year.
In Queensland the exemptions to the current land tax regime cost the state $1.3billion in 2014-15, with the components of the costs of the exemptions summarised in the below image.
Yes, you will see a $23million per year land developers concession - at tax with the exact opposite incentives to efficient tax, reducing the cost of not developing land.
In Victoria land tax concessions are forecast to cost $2.9biliion in the current financial year, amongst a bunch of other concessions that amounted to a total of $4.9billion. See the summary from the budget papers below.
So just in these three east coast states we have about $5billion per year just in land tax exemptions, plus many billions in other exemptions, including on gambling. If we remove the land tax concessions and double the land tax rate to around 4%, these three states could raise another $13billion every year.
But that is just the start of the tax concessions for the nation’s wealthiest.
What about another tax loophole? The capital gains tax exemptions. Treasury estimates it costs the country $56billion per year.
Or discounted taxation on super contributions? There’s another $27billion per year.
There are simply billions lying on the table in obvious tax loopholes for the rich, with land tax exemptions just one of many.
We have seen one big change - saying the words land tax has become acceptable for a politician. Now let’s hope this change starts snowballing, and that states can fight the propaganda of vested interests to use their tax powers more wisely and efficiently.