Announcing a $491 million tax-relief package, Victorian Treasurer Tim Pallas has backed his NSW counterpart on the need to ditch stamp duty.

Stamp duty is the biggest source of revenue for the states, raising about $21 billion a year including $7.5 billion for NSW and $6 billion for Victoria. But it is seen as extremely inefficient and a big barrier to housing affordability.
The debate comes after Mr Perrottet flagged plans to follow the ACT in switching from inefficient stamp duties to land taxes to ease housing affordability amid the COVID-19 recovery.
“It is the time to find ways to take the handbrake off our economy, and reforming stamp duty is near the top of that list a rare issue where it seems most people are in furious agreement,” Mr Perrottet wrote in Tuesday’s The AustralianFinancial Review.
Devil in the detail
The Property Council of Australia supports the move but warns the devil will be in the detail, and it will depend on the overall tax burden.
Council chief executive Ken Morrison said ACT claimed it had swapped stamp duty for land tax, but in reality stamp duty had only decreased from $268 million to $265 million over the past eight years while land tax had increased.
“Stamp duty is a terrible tax,” Mr Morrison said. “Every economic analysis puts it at the top of their list of worst taxes. For every $1 raised it does about 80¢ of harm,” he said.
“The question is what replaces it because the states can’t go cold turkey. We need to make sure the states don’t increase taxes masquerading as tax reform.”
NSW is facing pressure to drop payroll tax and WorkCover premiums on the federal government’s JobKeeper payments after Victoria announced the move as part of its $491 million package on Tuesday.
“The NSW government is examining options concerning JobKeeper and payroll tax, but no decision has been made at this point,” a spokesperson for Mr Perrottet said.
The Victorian package also includes a freeze on all fees and fines that were due to be increased in July, including car registration, traffic infringements, court-imposed penalties and permit fees, as well as Victoria’s fire levy.
Mr Pallas said the package built on the state’s initial $1.7 billion economic survival and jobs package, and took total support to more than $3 billion.
But he warned the economic recovery still looked more like a tick than a V.
Row with Transurban brewing
“We’ve seen our hospitality sector see revenue fall to the tune of about 60 per cent, we are seeing retail expenditure drop by about 17 per cent and we expect the recovery will be a longer-run thing than the movement to the bottom of the economic cycle,” he said.
The Treasurer said infrastructure was also key to the recovery, but a stoush with Transurban appears to be coming to a head after the toll road operator warned on Monday that the $6.7 billion West Gate Tunnel project would be delayed by a year to beyond 2022.
“We do have a contract with Transurban and that contract is time specific in terms of when the project is to be completed,” Mr Pallas said.
Mr Andrews also supports the tax reform push, although he does not back broadening or increasing the GST.
“Around national reform, [Reserve Bank] Governor [Phil] Lowe I think has made a very good point that just business as usual, just going back to all the old settings, I don’t think we should assume that that would deliver us another quarter of a century of continuous economic growth, that will not work,” Mr Andrews recently said.
“I’ve had a long-standing position around GST. It’s ruthlessly efficient in getting you the revenues you need, but trying to embed equity into it is really hard, and the notion of just changing the rate of a tax, that is not tax reform,” Mr Andrews said.
“That’s a change but it is not the kind of structural reform I think Governor Lowe is talking about.”
A spokesperson for Mr Pallas said after Tuesday’s media conference that “no decisions have been made regarding tax reform in Victoria”.