States bill to homebuyers – $19 billion

Homebuyers and renters affected by housing affordability will not be surprised by revelations in the media today that states and territories have reaped a record
$19 billion in property taxes and charges over the past year.

In yesterday’s Senate Question Time, Minister for Community Services Nigel Scullion said that exorbitant state taxes on land and property are a major factor in pushing house prices out of the reach ordinary Australians.

‘The issue at the heart of the housing affordability debate is supply. There are simply not enough houses and that has caused both rental costs and house prices to escalate,’ Senator Scullion said.

‘The housing affordability cycle is such that the more taxes are heaped on property and land, the more house prices increase, less people make the investment to build which causes a supply issue, which pushes prices up again.

‘The Australian Government recognises concern in the community and is meeting its obligations through assistance measures such as $2.2 billion for Rent Assistance and the $4.75 billion Commonwealth State Housing Agreement.

‘However, the impact of the billions of dollars we invest is negated by the states and territories siphoning the money out the other side in the form of property tax.

‘I urge the Labor State and Territory governments to heed the words of economist Saul Eslake who said stamp duty ‘… imposes a lot of tax on a small number of people at a time when they can, arguably, least afford to pay it.‘ (Financial Review, pg 1, 21/06/07)

‘The Federal Labor Party has gone quiet on housing issues lately – perhaps this is because they know that it’s not the Australian Government that holds the levers to easing housing affordability.

‘If the ALP is serious about housing affordability I urge them to talk to their state Labor mates about how their taxes are putting the squeeze on ordinary Australians,’ Senator Scullion said.