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Labor’s shadow assistant treasurer Andrew Leigh pushes land tax over stamp duty

April 20, 2017

Labor’s shadow assistant treasurer Andrew Leigh pushes land tax over stamp duty

Eryk Bagshaw, The Sydney Morning Herald, 20 April 2017

Labor frontbencher Andrew Leigh has advocated for a transition from stamp duty to land tax, claiming the current system hurts younger and poorer first home buyers while entrenching inequality.

In a wide ranging speech at the Crawford School of Public Policy on Thursday, the shadow assistant treasurer will also take aim at the education sector, suggesting experiments should be run on children and schools to make sure that resources are spent in the most effective way.

He will also advocate for a new public holiday every election year called “Deliberation Day” to where citizens debate their political future in schools and town halls around the country.

Dr Leigh’s comments on housing come a month after the Parliamentary Budget Office costed a Greens proposal that would kill stamp duty and replace it with a more efficient yearly land tax, saving home buyers from upfront charges of up to $40,000 in Sydney and $55,000 in Melbourne, while eventually delivering the government billions of dollars.

On Wednesday, Dr Leigh will tell the audience that “to the extent that it falls on people buying their first home, stamp duty on first homebuyers isn’t just less efficient than land tax, it’s also less equitable.”

“The same goes for capital gains tax and negative gearing,” he said.

“These tax expenditures aren’t merely inefficient, they’re also inequitable, with half the benefits going to the top 10th of the population. In the case of negative gearing, the typical teacher or nurse gets less than $300 a year, while the typical surgeon or anaesthetist gets over $3000 a year.”

Labor’s shadow treasurer Chris Bowen has pledged to curb negative gearing but refused to be drawn on whether it would help fund any transition from stamp duty to land tax, saying it was a matter for the states while also praising recent changes made by the ACT and Victorian governments.

The Turnbull government has all but ruled out any significant changes to negative gearing or capital gains tax ahead of the May budget.

Dr Leigh said as well as housing, education was a key lever in reducing inequality.

“In ensuring that resources are spent in the most effective way, we can learn from international examples such as Britain’s Education Endowment Foundation,” he said.

“In Australia, we don’t have an equivalent. Like medicine in the 19th century, the main focus is on expert opinion and case studies, rather than rigorous controlled experiments.”

He will also highlight the membership decline of “class mixing institutions” such as Scouts, Guides, the RSL and Rotary and the impact on political discourse by calling for a new public holiday.

“Deliberation Day is the notion that in election years, we should set aside a civic holiday on which citizens are encouraged to come together and debate the nation’s future,” he said.

“The day would create a conversation among 800,000 Australians – making it the biggest civic conversation in our history.”