SA state election 2026: Liberal leader Vincent Tarzia’s plan to axe stamp duty up-ends campaign
The Liberal plan to axe stamp duty is a desperately needed potential game-changer, even if it is riddled with holes, writes Paul Starick.
Axing stamp duty is the Hail Mary pass of the state election campaign – a radical potential game-changer against overwhelming odds.
In American football, the Hail Mary is a very long forward pass by a quarterback, made in desperation as a last-ditch attempt, usually fruitless, to score a touchdown at the end of the game.
State Liberal leader Vincent Tarzia launched his own Hail Mary on Wednesday, when he promised to get rid of stamp duty.
With his party facing obliteration at a state election next March, Mr Tarzia had to do something extraordinary to grab attention, up-end the agenda and try to haul voters back to the forlorn Liberals.
By pledging to axe the hated stamp duty, Mr Tarzia achieved at least the first two aims – whether he can entice voters is an open question.
Wiping out a tax has great political appeal, particularly one like stamp duty – a hefty government charge on land transactions.
There is considerable evidence that stamp duty blunts aspiration and chokes young people’s home ownership dreams.
As Mr Tarzia said when announcing his policy: “Stamp duty is an inefficient tax that inhibits the housing sector’s ability to reorganise itself and stops young people getting into the housing market and older people from downsizing.”
Mr Tarzia made this case strongly, even if his policy release was riddled with holes, particularly about how he would pay for scrapping a tax that he said injects more than $1.6bn annually in state budget revenue.
Seizing on this uncertainty, Premier Peter Malinauskas flipped into campaign attack mode, zeroing in on the “black hole” punched in the budget.
Painting a disastrous scenario, Mr Malinauskas warned there would be no money for the SA Police, let alone a heap of other government agencies and departments.
He repeatedly raised the spectre of former UK prime minister Liz Truss, whose spectacular 2022 ousting was triggered by an unfunded tax cut that sent bond markets into apoplexy.
Mr Malinauskas’s argument benefits from one of two unfortunate realities but is sidelined by another.
Firstly, the SA economy is excessively dependent on government jobs, either directly in the public service or funded through care industries like those on the NDIS tap.
These workers – a big voting cohort – would be chilled by the prospect of government revenue drying up.
Secondly, though, the billions shovelled out the door by governments during the pandemic conditioned the wider public to believe government money supplies were inexhaustible – even if their own households’ funds have come under immense pressure in a cost-of-living crisis.
There’s every chance budget-stressed mainstream voters will love a plan to obliterate a hated tax, without caring too much about the tricky details of revenue black holes.
Treasurer Tom Koutsantonis played his well-honed attack dog role to savage the Liberal stamp duty plan, repeatedly asking the legitimate question of how the measure would be funded.
“There is no jurisdiction where such a revenue hit has been imposed without the introduction of a land tax or similar impost to avoid a catastrophic budget collapse,” he told The Advertiser.
“There has been no explanation of how he (Mr Tarzia) intends to pay for his plan to strip up to a third of annual state taxation revenue out of the SA budget, and no detailed timeline of how he will phase out stamp duty over the next 16 years.”
These are all decent points. But the optics for voters were that the Liberals were proposing to axe a tax, while Labor was kicking and screaming to retain the right to grab their money.
As one senior Liberal figure said: “At least they’ve got something to fight for. People don’t vote Labor because they want higher taxes.”
Like a Hail Mary pass, there’s not much chance of the Liberals winning the election fight next March. But at least they’ve got a policy they can champion, as long as they can produce the costings evidence to prove it can work.
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