The NSW Business Chamber said the State Government’s confirmation that all Intergovernmental Agreement Taxes will be abolished in the State Budget will be warmly received by the business community.
“The NSW Business Chamber has been the leading advocate for the removal of these taxes including transfer duty on non-real business assets; mortgage duty on business transactions; and duty on unlisted marketable securities as they discourage mergers, acquisitions or restructures which improve efficiency and business viability,” said NSW Business Chamber CEO Stephen Cartwright.
“The State Government has fulfilled the commitment that it made in last year’s Budget on this vital issue and for that they should be congratulated.
“As with all transaction taxes, these duties act as an impediment to businesses making decisions that are in their best interests, so the economic costs of these taxes are particularly high.
“The NSW Business Chamber would also welcome further efforts to build on recent momentum in abolishing other inefficient taxes such as the emergency services levy on insurance premiums.
“With the NSW Budget in relatively good shape, there is no better time than the present for the Government to consider its options for more substantial state-based tax reform.
“In our pre-Budget submission, we advocated for improvements in the efficiency of the NSW tax system, including the reduction of the State’s reliance on stamp duty.
“Our recent report in the Thinking Business series, Taking on Tax: Reforming NSW Property Taxes suggests abolishing stamp duty in favour of a broad-based land tax would grow the state’s economy by $5 billion and create up to 10,000 new jobs.
“Handing back stamp duty bracket creep needs to be a priority. We estimate that in 2014-15, price-related bracket creep boosted residential transfer duty receipts by more than $2.3 billion when compared with the period before June 2011.
“The recent NSW Intergenerational Report also highlighted that the state-wide economic cost for collecting every million dollars of stamp duty revenue is around $800,000. This compares with virtually nothing for more efficient taxes such as a broad-based land tax,” Mr Cartwright said.