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Rudd squibs on property tax.

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Tuesday 20th February 2007

Rudd Squibs on Property Tax

Kevin Rudd has failed to answer a question on the fundamental economic issue of housing affordability affecting Australian home buyers, particularly those in metropolitan areas and capital cities.

On Perth radio this morning, Mr Rudd was asked about the escalating cost of renting and housing affordability. He was asked:

"…what should the Federal Government do to intervene, or is that entirely a state responsibility, the level of rents?"

In response to this, Mr Rudd said:

"Is there a silver bullet, or a magic solution to this? Well no there isn’t...,"

Either Mr Rudd didn’t want to admit to the real solution regarding the housing crisis or he simply doesn’t have the economic experience to understand such a fundamental issue.

The bottom line is that State Labor Governments could make housing a lot more affordable if they were to cut the excessive stamp duties on conveyancing and act on releasing new land for development.

In 2005-06, the States collected $10.8 billion in stamp duties. This is more than double the amount they collected in 2000-01 and comes despite record amounts of GST going to the States and Territories.

Property taxes such as stamp duty and land tax now make up, on average, 32.5 per cent of the total revenue raised by the States from their own imposed taxes. This is up from 22.6 per cent in 2000-01.

In Western Australia, the situation is even worse, with property taxes now making up 43 per cent of their total state sourced revenue, despite record levels of GST from a booming economy fuelled by the resources sector.

Stamp duties on a median priced property in Perth add, on average, $20 500 to the cost of the purchase.

Mr Rudd’s unwillingness or inability to admit that the solution to this crucial economic issue is for States to cut stamp duties and act on releasing new land for development, shows that he is not ready to

take the reins of Australia’s $1 trillion economy.

Media Contact: Brad Emery 02 6277 7360 - 0414 225 638

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