Wednesday, March 19, 2014

Land tax as part of a regional strategy?

Amidst the current debate on debt and asset sales there seems to have been a faint hint this week that taxation measures could be on the agenda. The Queensland tax effort has previously been identified as an issue and the initial draft Costello report did make some suggestions here on the revenue side.

The suggestions included a broader application of land tax. Land taxes have been prominently supported in recent years including the Henry tax review. However one of the few revenue measures by Treasurer Tim was to instead hike insurance stamp duty, a tax which is supported by almost nobody.

I did comment on this at the time last year and how insurance stamp duty disadvantages FNQ relative to SEQ with an equivalent home insurance premium in Cairns roughly double: Insurance 'king hit' for FNQ

So based on the last few years land valuations what would happen if we instead replaced such taxes with a broader land tax?

That insurance stamp duty comparison between Cairns and Brisbane would be reversed to advantage FNQ. One would think such a land tax policy would actually be coherent with the stated regional development objectives of both State and Federal Governments?

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