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The Commission of Audit has provided a stage for real change and improvement in the tax system, but now the government must take advantage, says Sian Sinclair, national industry leader, real estate and construction, at Grant Thornton.
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A chance for real reform
06 May 2014
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“It’s been a long time since the government has been this frank with us about the current state of Australia’s finances," Ms Sinclair said.
"I would hate to see the response to the report being more about tinkering around the edges without providing any real platform for change,” she added.
Key recommendations from the National Commission of Audit's report could significantly impact a number of sectors in the economy including, as Ms Sinclair highlighted, the property sector which is currently burdened with contributing the lion’s share of state revenue.
Ms Sinclair said that currently the property sector is hit with a range of inequitable taxes such as stamp duty, land tax, and hidden taxes such as infrastructure charges, all of which contribute significantly to state revenues.
She said the property sector should welcome the recommendations that would enable the states to introduce a personal income tax surcharge, on the presumption it will lead to a clean slate for the state tax systems
“The removal of inefficient taxes such as stamp duty and an overhaul of land tax exemptions would see a more even distribution of the tax burden,” she said.
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In addition, other recommendations could also buoy the property sector if implemented, she added.
“Changes to the aged pension asset tests will prevent the anomalies of asset rich pensioners, who are currently eligible for benefits, receiving funds that could be distributed more equitably. If implemented, the property sector should expect a flurry of activity as some baby boomers look to downsize,” Ms Sinclair said.
“The report further recommends better leveraging of Commonwealth land holdings by drawing on private sector expertise. This is a great opportunity for the sector if it means unlocking land supply and easing pressure on housing affordability.” she said.
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