Solve decades of political ‘stuff-ups’ with hung parliament: Spender

A minority federal government would deliver Australia the chance to deal with decades-long problems with the tax and housing systems, independent MP Allegra Spender has declared while signalling support for an overhaul of stamp duties, the GST and income tax.

As Liberal leader Peter Dutton suggested the government might be considering a land tax to replace state government stamp duties, Spender indicated climate change, tax reform and housing policy would be key to securing her backing in the event of a hung parliament.

Wentworth independent Allegra Spender says tax reform would be important in a hung parliament.Credit: Alex Ellinghausen

Spender won the Sydney eastern suburbs seat of Wentworth from the Liberal Party at the last election as part of a teal wave across NSW, Victoria and Western Australia. Most recent opinion polls, including the Resolve Political Monitor for this masthead, point to a minority government after the election, due by May.

The MP’s seat has the most expensive housing of any Commonwealth electorate as well as some of the most densely populated areas in the nation, such as Potts Point and Elizabeth Bay.

Spender said the tax system was holding back the economy, arguing that income tax was too high, with young people facing an increasingly large financial burden that was adding to intergenerational inequality.

She said the system needed to drive more capital investment, adding that excessive business profits were not adequately taxed while there was a case to tax so-called “negative externalities” such as the harm caused by social media.

A minority government could be the catalyst for the major parties to agree on a long-needed overhaul of the tax system while also making sure tax dollars were used efficiently.

“If we end up with a minority government next term, it would not be an aberration of our political system,” Spender said.

“It would be a consequence of that system being broken. And perhaps a route to fixing it.”

This week, the Business Council of Australia urged the government to put in place a $10 billion plan to boost house construction and reduce costs, starting with the abolition of stamp duty and its replacement with a land tax.

Accusing the major political parties of “stuffing up” housing policy over the past two decades, Spender said stamp duties, which federal Housing Minister Clare O’Neil this week described as a “bad tax”, should be one area of reform.

Spender backed interim federal financial assistance to wean states off their heavy dependence on stamp duties, which she said acted as a tax on people who needed to move home, those wishing to downsize and even on divorcing couples.

“It is the biggest cost-of-living challenge we are facing – and the one the political class is most responsible for stuffing up for the last 20 years,” she said.

“The community is disgusted to see politicians wedging each other on this when this is so heartbreakingly personal to Australians.”

In Sydney selling the Coalition’s $5 billion plan to help local councils supply infrastructure to new housing estates, Dutton accused O’Neil of coming up with a thought bubble over her support for states to axe stamp duties.

“Is she proposing that the Commonwealth will provide subsidies which would be in the many billions of dollars to state governments for that lost revenue? Is she proposing a land tax?” he said.

O’Neil told Nine’s Today program she was not suggesting a policy shift by describing stamp duties as bad taxes.

“I said it’s not a great tax. I think pretty much every economist in the country would agree with me when I say that. It’s one of those things that’s controlled by the states,” she said.

Liberal leader Peter Dutton says the government is playing catch-up with its housing policies.Credit: Alex Ellinghausen

Spender said if the next election led to a hung parliament, she would first consider the respective number of seats held by the major parties in determining which to support.

But she signalled she also would be looking for clear commitments in areas around climate change and tax.

“What I am trying to be clear on … is to say what is important to my community and what are the things that I will be looking for if we ever get to that situation to make sure we can actually deliver on what are the biggest issues that the economy is facing,” she said.

“I come back to the three issues – [economic] growth, intergenerational equity and climate. I can see a possibility for Labor and one for the Coalition. It comes down to the circumstances and what you can negotiate at the time.”

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