Stamp It OUt

I’m going to give you a mini-history lesson. About your money and how Governments relentlessly take it off you. State and Federal, they are both blatant and insidious. When John Howard brought in GST it was going to wipe out so many other taxes, especially state taxes. And it didn’t. Especially that ubiquitous, rapacious thing called Stamp Duty.

How many times have I railed against it and complained that for all that money you don’t even get a bloody stamp! And it’s double-dipping. It’s a post-tax dollar tax.

I have been interviewing federal Treasurers for decades. The first was a bloke called Harold Holt when he was Menzies’ Treasurer back in the 1960s. Since then Howard, Costello, Crean Snr, Kerrin, Keating. Plus heaps of state Treasurers.

And there’s one question I have never really had answered. Why do we pay so much Stamp Duty? Why, in fact, do we pay any Stamp Duty?

I mean, what do you get for it? I’ve done some research. I know that the British brought in the Stamp Act in 1765 but that was mainly to drag money out of the American colonies. And that was more than 350 years ago.

In Victoria, our state government is one of the greediest, most rapacious, most money-hungry governments in the world. Yes, the world. Each year the Victorian Government collects more than three billion dollars in Stamp Duty.

 Stamp Duty for a property in Melbourne is much, much more than for a similar property in the United States or Canada or the UK.

On a $500,000 property you would pay just over $4000 in Stamp Duty in New York, $5000 in London and $6000 in Toronto.

You know what you pay in Melbourne?  $22,000.  And it escalates rapidly after that. On a property worth $650,000   you would pay around $33,000.

That is a huge chunk of money. For what? For nothing?  It stifles building. It stunts property deals. It is a curse.

But maybe, finally, it is about to change. Having defended Stamp Duty to the hilt the Brumby Government has now proposed to the Rudd Taxation Review panel that all states scrap all Stamp Duty on property, cars and other items.

In return they’d want a $20 billion shares of income tax revenue. And I think that would be fair.

According to The Australian newspaper today the Victorian Government claims the abolition of stamp duties would stimulate investment and generate billions of dollars of additional company tax revenue for the Commonwealth to help pay for the change. That stamp duties are deeply unpopular among taxpayers because of the perception they have no justification or purpose and add significantly to the cost of housing and vehicles.

Hallelujah. I’ll second that.

Friday, May 1, 2009

© Copyright Derryn Hinch 2009