Stamp duty is a ‘bad tax’, Labor says, as pre-election housing agendas diverge

Housing Minister Clare O’Neil says it’s a ‘good idea’ that stamp duty be replaced with a land tax, following a call from the Business Council of Australia to phase it out.

Housing Minister Clare O'Neil. Picture: NewsWire / Martin Ollman

Housing Minister Clare O’Neil says stamp duty is a “bad tax” and that it’s a “good idea” that it be replaced with a land tax, following a call from the Business Council of Australia to phase it out.

“The moves that some states and territories have made to wind it back or to remove it altogether are really positive and I’m really supportive of it,” she told ABC RN.

“Stamp duty is a bad tax. It prevents people from moving around the housing market in the way that suits them best and it creates costs for everyone who’s selling or buying a home.”

The Business Council of Australia earlier this week called on the federal government to amend policy settings to reward jurisdictions for replacing stamp duty with a land tax, such as “ensuring they are not penalised by GST distribution” and providing incentive payments.

Ms O’Neil said that reform would take “good, strong partnerships – state, local, and commonwealth governments working together”.

“We can certainly ask the states to do it, but I’m a commonwealth minister and … it’s not my power to tell states what to do,” she said.

Ms O’Neil also marked out a point of difference between Labor’s housing agenda compared to the Coalition’s in relation to where the government would prioritise housing construction.

She said the Albanese government’s housing infrastructure agenda would focus both on greenfield developments as well as the infill of existing, higher-density suburbs, while Peter Dutton said the Coalition’s “very strong focus” would be creating “additional capacity” for new construction.

“We need to assist with greenfield development, as our government is doing,” Ms O’Neil said. “We also need state governments to step up a bit on planning reform that will enable us to do infill in existing suburbs.

“Lots of (young people) would be very happy to live in apartments where they’ve got access to great resources, great transport networks and the life that comes from living in the inner city and we need to give people options. That’s the answer here.”

The growing divide comes as housing is shaping up to be a key election issue following the Coalition’s pledge to invest $5bn in infrastructure to “unlock” up to 500,000 more homes.

The Opposition Leader told ABC AM that greenfield developments would create “additional capacity and perhaps take some pressure off areas where … there’s some support but not unanimous support for additional density”.

Opposition housing spokesman Michael Sukkar said the housing demand was “most acute” for detached homes, the potential sites for which are in peri-urban areas.

“At the moment … about 70 per cent of first-time buyers do purchase detached houses with a backyard,” he told Sky News.

“That’s a clear preference of first-time buyers and we think that Australians should have that opportunity to own a home with a backyard in a suburb.

“So you might refer to it as sprawl or the experts might refer to it that way, we refer to it as suburbs. These will be the wonderful suburbs of the future.

“And our forefathers invested in suburbs like this that we live in now, and it’s our obligation to do that for future generations. We think that it’s the area where we can get the biggest housing yield.”

Mr Sukkar said secondary hubs like Parramatta as compared to Sydney’s CBD offered jobs and opportunities and could reduce commute times for residents of those new homes.

“The idea that I think the Labor Party is going down, which is you’ve got to live in an apartment or nothing, that’s not our approach,” he said. “Our approach is people should have every opportunity to live in whatever they want, including a home in a greenfield suburb.”