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Scrapping stamp duty a good move for cities 04/11/2017

The Productivity Commission released a report on October 24 entitled Shifting the Dial: Five-Year Productivity Review.

The Productivity Commission released a report on October 24 entitled Shifting the Dial: Five-Year Productivity Review.

This is the first report of its kind for the commission, which provides a broad perspective on what may influence Australia’s economic performance over the medium term.

In particular, the report looks at Australia’s healthcare system, education and the functioning of our towns and cities.

It was encouraging that the Commission noted the importance of large towns and cities to our economy and our way of life. The overwhelming majority of our population live in large towns and cities and account for a massive 80 per cent of Australia’s gross domestic product (GDP).

According to the report, capital cities represent over two-thirds of total employment and accounted for 80 per cent of employment growth in 2015/16.

Aspects of a well-functioning city include access to housing in the forms and locations desired, good mobility, a sense of safety on the part of those who live and visit, thriving businesses that provide good employment opportunities, access to quality services and an environment that reflects appreciation for the social, environmental and aesthetic importance of urban design.

That is why it is critical we get the forward planning, design and rollout of new buildings, infrastructure and services in our cities right, in order to enhance liveability and economic prosperity.

In terms of recommendations to improve city planning and functioning, the report makes a number of suggestions with regard to public infrastructure, road funding and investment, planning and land use policies and access to housing.

Importantly, the Commission recognised stamp duty on property transfers discourage people from moving and lead to less productive use of land.

The recommendation to scrap stamp duties has been welcomed by UDIA. Given housing affordability is a major issue across the country, the application of stamp duty is an unfair and inefficient burden on homebuyers.

Currently, stamp duty puts a barrier in place to people downsizing or moving closer to employment as a purchaser could be looking at $20,000 or more on top of the cost of a home. That is in addition to other transaction costs and the cost of moving itself.

A renewed focus at a Federal Government level will hopefully also provide stronger leadership on land use planning policy so that we can achieve better consistency and efficiency in decision making processes.

It is particularly crucial the State Government heeds the Commission’s advice and sets clearer parameters for all policymakers in the planning system.

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