The fifth intergenerational report just released by the Treasurer has caught the headlines for all the wrong reasons, according to the Real Estate Institute of Australia (REIA).
REIA President Adrian Kelly said that as a nation, Australians were getting older, less fertile, more in debt; and as more Australians continue to age and near retirement, fewer people will be paying more tax.
Those who were undecided about taking the plunge into parenthood may not have taken much comfort from this report. As real estate agents, population growth is a hallmark of a vibrant and sustainable housing market.
Sales and rentals are our bread and butter, and there was nothing in the headlines that painted a promising picture for our home buyers and tenants. It is however welcome that labour participation is at record levels; and looks promising for womens economic participation, he said.
Mr Kelly said what was missing from the commentary was the opportunity of where this strange, COVID-19-paved road leads us; and that is meaningful reform in a range of areas that affects Australian hip-pockets.
Its not quite death and taxes but just about housing and taxes. The year 2000 gave us the GST which promised to get rid of inefficient state taxes. It did not and two decades on it is time it was addressed.
The 2009 Henry Review showed us a simple, fair land tax system that taxed all players equally. There was another glimmer of hope with the 2020 NSWReview of Federal Financial Relations: Supporting the road to recovery draftreport but the conversation failed to start and it was put in the too hard basket.
Once more we find ourselves with a mish-mash approach to property taxation with states and territories going it alone despite the opportunity the promised Council Of Australian Governments reforms offered; even with the Council of Federal Financial Relations allocated responsibility for property.
Four of the recent state budgets plan on taxing home owners and investors more than $34.9 billion in the next financial year alone. Stamp duties now add an additional four per cent to the cost of a home across Australia. There is a substantial win for housing affordability and hip pocket cost right there. Reform in this space would be electorally popular, particularly if offset by a fairer tax agenda.
But history shows us that finding a better way is frequently shelved. One would think it would be in politicians best interests to seriously address this from a national perspective given the current challenges to housing affordability.
What the Intergenerational Report projections show us is that it is time for a national conversation to begin in earnest about wholesale tax reform. Or at the very least a fairer taxation system that is less punitive on aspiring home owners, home owners and tenants living in private rentals, Mr Kelly said.
