Urgent tax reform needed to fight unemployment
The peak body for the state’s biggest industry has seized on the latest unemployment data to renew calls to urgently reform South Australia’s tax system.
The South Australian unemployment rate (seasonally adjusted) has spiked back up to 7 per cent on the back of the latest ABS data, the highest rate in the country – this is a decrease in employment of 2,000 people.
This is up 0.4 percentage points on the last seasonally adjusted data, the biggest increases in the nation along with WA. Meanwhile the national unemployment rate sits at 5.9 per cent.
SA Executive Director of the Property Council Daniel Gannon said that more jobs could be created if a deeper tax reform agenda was embraced.
“A total reform of our land tax and stamp duty systems should be accelerated as a top policy priority,” said Mr Gannon.
“Our state’s policy-makers need to create every possible competitive advantage to ensure that South Australia is the country’s most attractive investment destination. If we fail to create this environment, then we risk our state’s future economic prosperity.
“The State Government needs to take urgent steps to move towards a flat rate of land tax in South Australia and make us the most competitive land tax regime in Australia to improve investment conditions in this state.
“Fewer taxes mean greater prospects of job creation and economic stimulation, but without further structural changes to our tax system, we run the risk of failing to continue to innovate.
“We also need to urgently accelerate the total abolition of stamp duty on commercial property transactions. The acceleration of this deadweight tax is a green light for investment and a positive platform for investment hunting.”
Mr Gannon said the stamp duty saving on a $1 million commercial property purchase equates to $48,830, while on a $5 million investment it presents a $268,830 saving. A $10 million transaction after 1 July 2018 will see a saving of $543,830.
Property is South Australia’s largest private sector employer and biggest industry, accounting for 10.8% of the state’s economic activity (or $10.5 billion).
It builds prosperity by paying $4.4 billion in wages and salaries – one in six people draw their wage directly or indirectly from property – and one million South Australians have a stake in property through their super funds. Property is the largest single industry contributor paying 56.6% of state taxes, local government rates, fees and charges.
Media contact: Daniel Gannon | E [email protected]