Another tax creeps in
BY PETER WALSH
IN THE midst of all the brouhaha surrounding Daniel Andrews and his dramatic bid for his pandemic laws; the Premier and his government have quietly imposed yet another tax on Victorians with the windfall gains tax.
And once again, this is a punitive piece of legislation we would not have if it were not for Victoria’s erratic independent MPs, who have joined with the Andrews Labor government to pass a new housing tax that has the potential to wreck home ownership across the state simply to feed this government’s tax addiction, as one industry expert has put it.
In my role as leader of The Nationals, and as Shadow Minister for Regional Victoria, I can tell you now this new tax will drastically push up the price of new homes.
This windfall gains tax (WGT) – whichever way you look at it – is a tax that takes a lot and offers nothing in return. It is a combination of the goods and services tax and capital gains tax; but there is nothing good involved, it does not serve the people of Victoria and the only one to gain anything is the government and its coffers.
Coffers which must be just about empty because of its unbridled spending and its massive, multi-billion-dollar failures in infrastructure projects.
So every Victorian will now pay the price for that financial incompetence and greed. Governments cannot tax their way out of total mismanagement and Victoria cannot afford another four years shackled to a government that has dug a financial hole so deep it cannot see how to get out of it. The WGT was strongly opposed in Parliament by Liberal and Nationals MPs after experts predicted it will add tens of thousands of dollars to the price of a new home in regional Victoria.
Rural landholders will be hit even harder; Daniel Andrews has made sure they will be slugged a 50 per cent tax on sales uplifts of $500,000 or more on any land rezoned from farming to rural residential, residential or commercial.
There’s no other way to see this except for what it is – a cash grab to try and bolster the massive debt Andrews and his government are building on bungled infrastructure projects in Melbourne.
This is classic Labor – spend money you haven’t got and then turn your eyes towards regional Victoria to pay the real price and in this instance this new tax has dealt a devastating blow to the future of the next generation of Victorians trying to own or build their first home.
This tax will be passed on to the people who can least afford it – young Victorians and Victorian families who have spent their life carefully saving to build or buy their own home.
The squeeze on land availability in many regional hubs has already created long delays for vacant blocks, while rental vacancies are at all-time lows and rents have soared to all-time highs.
This would have to be the worst possible time for the Labor Government to be making it harder and more expensive for people to get into the housing market.
And this isn’t just The Nationals talking politics; the industry experts are also showing what Daniel Andrews doesn’t care about – and what the independents weren’t smart enough to think about.
Urban Development Institute of Australia chief executive Matthew Kandelaars has told media the tax increase will “drastically” push up house prices; and see nearly half a monthly mortgage payment go to paying off the “Government’s tax addiction”.
The Opposition attempted to pass amendments to the Bill; that would have reduced the tax rate and forced the government to redirect revenue generated in regional Victoria back into the local government area from where it was collected.
But the support of independent MPs in the Parliament blocked the amendments; which would have eased the levy on rural and regional Victorians.
The experts are saying Labor’s tax will cost regional Victoria at least 2700 new homes, 9500 direct jobs and more than $2.7 billion in lost economic output.
Regional councils have condemned the tax as a handbrake on development that will further compound the housing supply shortage.
Instead of new taxes, the Government should be adopting The Nationals’ plan to fast-track 50,000 new regional lots to market by boosting skills resources at rural councils and untangling the ministerial approvals process.
* Peter Walsh is the member for Murray Plains