The ACT Taxation Review is now online as is the Government response.
Recommendations agreed or agreed in Principle are:
- — Recommendation 1
Adopt taxation instruments and settings that deliver stable revenue growth proportionate with economic growth.
— Recommendation 2
With regards to long term structural reform, over a period of time that is adequate for appropriate transition:
a) abolish duty on conveyances
b) retain a form of tax on payroll to maintain a diversified tax system
c) abolish duty on general insurance and life insurance, and
d) adopt a broad-based land tax as a base for revenue replacement.
—Recommendation 3
Pursue measures and steps in the short-term that, individually and combined, make progress towards long-term structural reform.
— Recommendation 4
To the extent possible, ensure that there are no disincentives for households and businesses to locate within Territory borders as opposed to the surrounding region.
— Recommendation 5
Engage the Commonwealth Government and seek its support in pursuing any taxation reform.
—Recommendation 6
Seek Commonwealth support in ensuring that taxation reforms do not impose unintended penalties through the application of the GST distribution process.
— Recommendation 7
Use the Lease Variation Charge and a broad-based land tax as instruments for land value capture. Taxation settings should ensure sufficient revenue to support the necessary investment in infrastructure and services.
— Recommendation 8
Duty on motor vehicle transfers should be continued. A road user charge system would be best progressed through a national agreement between all the States and Territories.
— Recommendation 9
Pursue the introduction of parking fees in the Parliamentary Triangle.
— Recommendation 10
Abolish conveyance duty. In doing so:
— pursue at least a 10 year, and up to a 20 year, transition plan to ameliorate the impact of the change on households
— have due regard for conveyance duty paid in the years leading up to the change, and
— recognise the significance of the change and consult with the community on the transition plan.
— Recommendation 11
Address the impacts on low income households from the substitution of the tax through the concessions system, with a possible expansion of the current rebate scheme.
— Recommendation 12
For households not eligible for rebates, allow deferral of rates as an option, based on age and asset tests.
— Recommendation 13
Expand the Home Buyer Concession Scheme by:
— progressively reducing the marginal tax rates, and
— extending the threshold.
— Recommendation 14
Continue a Pensioner Duty Concession Scheme over the transition period, and adjust the property value thresholds to support ageing in place and access to housing choices within an area.
— Recommendation 15
Extend the eligibility criteria for Duty Deferral Scheme and provide an option to amortise duty over a period of ten years.
— Recommendation 16
Support ageing in place through expanding the Duty Deferral Scheme and deferral of rates, with outstanding tax liabilities recovered at the time of sale.
— Recommendation 17
Work towards national harmonisation of the payroll tax system.
— Recommendation 18
Over time, abolish residential land tax in its current form.
— Recommendation 19
Transfer the commercial component of land tax to general rates on commercial properties.
— Recommendation 20
Adopt ‘site value’ of land as the valuation basis for the determination of rates, land tax, and Lease Variation Charges. The site value should exclude improvements on the land (such as buildings and sheds) but include improvements to the land by way of clearing, filling, grading, draining, levelling or excavating of the land.
— Recommendation 21
Levy general rates via a two-part charge incorporating an element to meet the cost of basic city services, and a progressive general taxation component contributing to general revenue.
— Recommendation 22
Abolish duty charged on general insurance and life insurance premiums, with general rates as the revenue replacement source.
— Recommendation 23
In order to ensure that the benefits of insurance tax reform are passed to the consumers, establish a monitoring and regulatory role for the Independent Competition and Regulatory Commission
— Recommendation 24
Retain the Ambulance Levy, however, review its administration.
— Recommendation 26
Consider a two-part tariff on gaming machines comprising a licence fee per machine and a progressive tax component.
— Recommendation 27
Use the concession system to ‘cushion’ the distributional impacts of reform through the transition period, and on an ongoing basis.
Finally we have this:
Additional Recommendation from the Panel Chair
Consider allowing poker machines in Casino Canberra.Not agreed.
The ACT has a community gaming model that precludes poker machines in Casino Canberra. The Government notes the casino licence was granted, and accepted by the operator, on this basis.
The other recommendation to be knocked back also touched lightly on pokie reform.
One wonders how they’d feel if the Labor Club wasn’t tightly linked to the Government.
UPDATE 07/05/12 10:43: Minister Barr’s media release on this subject is now availabale. It seems even these broad brush strokes are merely a starting point:
The Panel has provided a sketch plan of reform, and suggested that the ACT need not wait for national action. The Review was mindful of the impacts of any changes in taxation settings on businesses and households, and of the need to maintain capacity for services.
Today I have also issued the ACT Government’s in-principle response to the Review Panel’s report.
The Government broadly accepts the Review’s recommendations – agreeing to 15 recommendations, providing in-principle support to 14 recommendations, noting 1 recommendation, and not agreeing with 1 recommendation.
Taxation reform is difficult – and the Review has noted that no other state or territory is undertaking a process of taxation reform.
The ACT Labor Government is committed to tax reform. The easy option is to do nothing, but the ACT Government will reform the Territory’s taxes to create a tax system that is economically and fiscally sustainable.
Overall, the Panel’s work provides a very useful starting point for the Government to consider reform, and to commence a conversation with the community.
UPDATE 07/05/12 13:22: Liberal Senator Gary Humphries doesn’t know much about tax balance, but he knows he hates people paying for parking:
“ACT Labor look set to cash in by slugging Canberrans more just to park their cars”, Senator Humphries said following the release of the review.
“The review claims that forcing Canberrans to pay for parking will ease congestion, despite not having examined the reasons for an increase of traffic flow throughout the parliamentary triangle.
Senator Humphries has criticised the ACT and Federal Labor Governments for failing to invest in infrastructure and public transport in the capital.
“With an ill-equipped public transport system that has lacked real funding and infrastructure development for years under Labor, it is unreasonable for the government to expect Canberrans to just go without their cars.
“This measure is purely another money hungry mechanism that will feed the Labor and Greens’ addiction to spending taxpayers’ money”.
UPDATE 07/05/12 15:24: The Greens are mad keen for it:
The ACT Greens have welcomed the release of the overdue Quinlan review of taxation in the Territory.
ACT Greens Leader and Treasury spokesperson, Meredith Hunter, said the report contains a range of sensible initiatives that will improve the ACT taxation system.
“It was positive to see the equity issues were well considered in the proposed changes to taxation, fees and charges,” Ms Hunter said.
“Whether it is the gradual transition away from stamp duty, or paid parking equity in different employment centres – the goal must be fairness.
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