All eyes turned to Prosper over its challenging presentation to the Senate Economics Committee Inquiry into Housing Affordability on September 9th.
Prosper Policy Director David Collyer spoke to the politics of taxation and researcher Philip Soos to its economics.
The committee understood and genuinely appreciated our recommendation for a 1 per cent Federal Land Tax fully rebatable against any State Land Tax paid. This proposes using the federal system for good, whereby Canberra obliges the states to use their taxing powers properly – and dissipates the inevitable backlash against any reform.
Philip Soos challenged the notion that there were supply constraints – rents have barely budged. They have been hearing from every vested interest that Supply! Supply!! Supply! is the key determinant. Prosper says it is our very poor tax system. Philip’s data showed that rents should have increased in line with prices if there was such a shortage.
The AFR published a pre-hearing precis of our arguments, re-posted on the Prosper blog.
The AFR followed up with a report of Prosper’s evidence.
The Herald Sun focussed on the benefits to affordability in replacing Stamp Duty with State Land Tax.
The Senate committee comprises Senators Sam Dastyari (chair, ALP NSW), Chris Ketter (ALP QLD), Jan McLucas (ALP QLD), Sean Edwards (Lib SA) and Scott Ludlum (Greens WA). We await their findings on November 27.
We hope this continues the debate for a tax shift off mobile capital and onto the most efficient tax base – land. Commentary in today’s AFR on the Federal ALP’s move push for the phasing out of stamp duty is a positive move.
We believe the Prosper submission stood head and shoulders above the other 220 submissions and is a vital component to the affordability debate when investors are running at 39.54% of all housing loans and record negative gearing write-offs abound.