VECCI calls on major parties to ditch stamp duty at state election

Ditching stamp duty is among 20 major recommendations Victoria’s peak business body is calling for major parties to adopt at the election.

Victoria’s peak business body is calling for a stamp duty overhaul. Picture: Joel Carrett

Victoria’s peak business body has urged the major parties at the state election to ditch stamp duty and replace it with a broader land tax that would be collected over time.

In its major wishlist ahead of the November poll, the Victorian Chamber of Commerce and Industry also called on political parties to commit to reform payroll tax, investigate regulating the energy market and help workers with better accreditation, including an agriculture passport.

Chief executive Paul Guerra on Wednesday released VCCI’s policy platform and detailed 20 major recommendations on how Labor, the Liberals and other parties could support businesses and the economy if elected.

One of the most significant requests was to swap out the current stamp duty system with a broadbased land tax.

In Victoria, land tax is paid annually on holiday homes, investments and vacant land but not on residential properties.

Victorian Chamber of Commerce and Industry chief executive Paul Guerra.

VCCI and other business groups argue stamp duty, paid upfront when a property is purchased, is so high it is driving young people and downsizers away from the property market.

The chamber has argued that the state government would allow workers to move locations more easily by scrapping the charge and replacing it with an annual tax based on the value of land.

Victoria toyed with the idea of reform stamp duty in 2020 but backed away from the idea as Covid lockdowns ravaged the state’s finances.

But in New South Wales Premier Dominic Perrottet is pushing ahead with the idea and has called on the federal government to help them do so.

“We’re confident that there’s a solution to this that makes it easier for people to consider buying and then selling more readily than what they are at the moment,” Mr Guerra said.

“What we’re suggesting is there’s an appetite to do this, let’s get the design right.”

A poll of more than 1000 businesses by the chamber showed 82 per cent of those surveyed supported replacing stamp duty.

A similar amount said the payroll tax threshold brought into line with NSW, from $700,000 to $1.2m, and VCCI called on parties to act on this request.

The payroll threshold in regional Victoria would also be brought from 1.21 per cent to 0 per cent.

Mr Guerra said the economic benefits would outweigh the loss in revenue.

“The flip side is you gain more businesses and businesses expanding,” he said.

“The offset might not be as much as we usually think

“It is not only an effective strategy, it’s also an acquisition strategy.

“(It’s) saying Victoria’s here, we’re open for business, and we’re actually in the best state to do business.”

VCCI has called on the next state government to form a framework for “microcredentials” which better recognise workers for past experience across a range of areas.

Other requests include a review of ways to regulate the energy market to ensure certainty of supply and certainty of price and a statewide examination of local content rules.