Self-funded retirees will continue to struggle with land tax with neither major party committing to a reduction in the near future.
Treasurer Mike Nahan and shadow treasurer Ben Wyatt faced questions from retirees at the Association of Independent Retirees election debate on Friday.
One of the biggest issues was land tax, which had seen drastic increases over the past eight years and was eating into investment property income that some retirees depended on to live.
Currently anyone who owns land worth more than $420,000 based on its unimproved value must pay at least $300 plus 0.25 cent for each $1 in excess of $420,000.
When asked what they would do to reduce the tax both treasurers could not make a commitment because of the state of the budget.
Dr Nahan said the former Labor government reduced land taxes in 2007 as well as his government in their two terms up until 2014.
“They reduced tax up to 55 per cent, we then reduced it eight per cent in our first term and eight per cent in our second term and held it there until 2014,” he said.
“We were by far across all categories the lowest land tax state in the country. “Indeed the way the grants commission works if you choose to collect less money on average than other states you lose that money.
“We were losing $200 million a year through the grants commission process in addition to that land tax we weren’t earning.
“So we substantially increased land tax for three years.
“We now still have the lowest level of land tax across all states and indeed every category of land tax still pays in nominal terms in today’s dollars, less tax than they did 10 years ago.”
Dr Nahan said with the reduction of the GST and collapse of iron ore royalties they had to increase land tax in 2014 but they would not increase it any time soon.
“I think self-funded retirees going forward want a state that doesn’t build up debt not only for yourself but for your children,” he said.
“We have announced that we will not increase that anymore.”
He also said they increased the base threshold from $300,000 to $360,000.
Mr Wyatt said land tax had been one of the biggest issues his constituents had spoken to him about but could not commit to any changes.
“Over the past three years simply because (land tax increases) had such a dramatic impact into an economy of course that had increased vacancy rates where the increase in land tax was unable to be passed on,” he said.
“No one likes state taxes, they are generally inefficient and poorly targeted but we have a very narrow revenue base.
“In light of those operating deficits any tax cut is effectively funded by increased borrowing so it’s not something I could commit to at this point.”
Euthanasia was also a hot topic with both treasurers stating it would probably come before Parliament over the next few years.
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