InvestSMART

The stamp of immobility

THE secretary of the Treasury, Martin Parkinson, has raised again the issue of stamp duty on real estate transfers. Like his predecessor Ken Henry in the eponymous broad tax review published last year, Parkinson sees stamp duty as a tax on economic flexibility. By making buying and selling houses more expensive, it inhibits people from moving to where jobs are being created - in the mining states, for example.

THE secretary of the Treasury, Martin Parkinson, has raised again the issue of stamp duty on real estate transfers. Like his predecessor Ken Henry in the eponymous broad tax review published last year, Parkinson sees stamp duty as a tax on economic flexibility. By making buying and selling houses more expensive, it inhibits people from moving to where jobs are being created - in the mining states, for example.

THE secretary of the Treasury, Martin Parkinson, has raised again the issue of stamp duty on real estate transfers. Like his predecessor Ken Henry in the eponymous broad tax review published last year, Parkinson sees stamp duty as a tax on economic flexibility. By making buying and selling houses more expensive, it inhibits people from moving to where jobs are being created - in the mining states, for example.

That is certainly true. A family in a declining manufacturing centre or an irrigation area facing loss of water supplies may quite easily see the writing on the wall, and look to better prospects in the north or west of the nation.

They already suffer one big disadvantage: property prices that are stagnant or falling where they are coming from, and inflated by shortages in the towns where the jobs are being created. Adding a hefty levy of tens of thousands of dollars to the cost of moving home can be the final straw of disincentive.

Another kind of immobility encouraged by stamp duty revolves around the lifestyle transitions of ageing. Parents may wish to downsize when their children move out, turning excess capital from their big home into an income stream for retirement, or simply to move closer to their working children so they can help out with grandchildren.

Stamp duty is a huge bite out of that hard-won family capital, encouraging older people to rattle around in a large home in cities desperately short of family-sized housing.

In an ideal world it would be abolished. Peter Costello tried to get the states to abolish stamp duty, along with payroll tax, when the Howard government introduced the goods and services tax. But the states are addicted to the revenue stream from stamp duty on real estate transfers.

NSW alone earns $3.9 billion a year, a third of the national total.

Replacing stamp duty with a tax on all land holdings might be unfair to people who have paid stamp duty and also become liable for the tax that replaces it. It would also have to be on unimproved value, to avoid giving states a stake in asset-price inflation as they have now.

Raising the GST makes more sense - with the proviso that only states which abolish stamp duty receive their share of the proceeds. These are the politically difficult but big reforms that are forcing their way onto the agenda of the coming tax conference, as much as our politicians are trying to bat them off.

The black dog will not stop growlingTHE Liberal MP Catherine Cusack is the latest in a growing line of MPs to discuss publicly their battle with depression. Cusack is to take leave from Parliament to seek treatment. It takes courage for a public figure to acknowledge a condition such as depression and seek help. She is to be commended for doing so, and so are her colleagues on both sides of politics who have supported her in her decision.

In recent years Geoff Gallop and Andrew Robb have spoken of their struggle with depression. Generations earlier, Winston Churchill mentioned his battles with what he called the black dog. Churchill was an exception in that his generation would have found it a difficult subject even to mention publicly.

His exhortation to himself when in the midst of a bout - KBO, or keep buggering on - symbolised the doggedness he exemplified more generally. But though admirable, doggedness alone is not enough to defeat an increasingly common condition.

MPs are only the highest-profile sufferers. Managers of all types - plus employees, particularly older ones - all are vulnerable. Many ills are blamed on the pace of modern life but in the case of depression the link makes good sense. Those who work in bureaucracies - public or private - find the professional need to be upbeat at all times can create an intolerable burden. And there is no escape. Relentless work pressures are intensified and made more intrusive by communications technology.

It is little surprise either that MPs succumb. The public's suspicion that they enjoy a life of ease at the public's expense is in almost all cases wide of the mark. Elected representatives work hard and constantly. To the heavy burden of constituents' expectations can be added the relentless aggression and abrasion of the political contest. Small wonder that some start to question the value of continuing.

There is little point in expecting politicians to change the way they conduct themselves, although most people would surely welcome less confrontation and more co-operation from some of them. Nor will the pace of life slacken by itself. But if those things cannot be changed, at least their pervasive - and dangerous - consequence, depression, can be studied. Is it the result of some individuals' innate susceptibility, or is its increasing incidence a symptom of the pressures crowding in on us all?

How can it best be avoided, or managed, without drugs? Individuals such as Cusack have the courage to acknowledge their condition so should society.

We need the medical research equivalent of a royal commission.


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