The Productivity Commission released its report Shifting the Dial: 5 year productivity review, on Tue 24.10.2017. It looks at the factors and influences that may affect Australia’s economic performance over the medium term, in order to offer advice on where the country’s priorities should lie if it is to enhance national welfare.
This process will be repeated every 5 years, similar to the Governments Intergenerational Report.
On revenue-related issues, the report recommended that:
- State and Territory Governments should move from stamp duties on residential and commercial properties to a broad-based land tax on the unimproved value of land.
- The report suggests that stamp duties on residential and commercial property transfers be phased out and replaced with a broad-based tax based on unimproved land value.
- There should be a transition over several years to aid adjustment.
- A shift to land-based taxes should include provision for low income households to defer property taxes and fund them from their estate at death or on the sale of the asset (whichever comes first), with low interest rates applying to debts.
- Governments should adopt a commitment to tax changes that improve revenue-sharing arrangements between governments as an essential element of a Joint Reform Agenda.
- Collect unpaid HELP/HECS debts from deceased estates. The report noted that outstanding HELP debt had risen from $12.4 billion in 2006 to nearly $50 billion in 2016.
- The Federal Government should move towards an alcohol tax system that removes the current concessional treatment of high-alcohol, low-value products, primarily cheap cask and fortified wines. Ideally, this would be achieved through a uniform volumetric tax rate for alcoholic beverages, calibrated to reflect the health impacts of alcohol consumption, the report said.
[Productivity Commission’s website: Shifting the Dial; LTN 204, 25/10/17; TM Oct 2017]