Australians Paying $1m In Tax Every Minute

MEDIA RELEASE

APRIL 11, 2016

Governments throughout Australia should be focused on cutting taxes rather than penalising property owners through reducing tax benefits such as negative gearing as they are already collecting nearly $1 million in taxes every minute according to Kevin Young, Presidents of Property Club, Australia’s largest independent property group.

Mr Young said that the latest official figures on taxation collection by all levels of Government show they collected $119,563 million in taxes during the three months covering the December quarter 2015.

“That means Australians are now paying around $1,313 million in taxes every day, $55 million every hour and nearly $1 million every minute! We are born free and taxed to death.

“And the amount of taxes being collected by Government is increasing with total taxation revenue increasing by 17.9% (6 times the inflation rate) over the December quarter.

“The debate on negative gearing has helped to mask the massive tax take by Governments throughout Australia and a lot of this money is being collected from property owners.

“By limiting negative gearing, the Government would in effect discourage investment in property and with fewer people funding their retirement through this form of asset creation, the financial burden on the Federal Government pension system will only increase.

“At the same time, State Governments would have to provide more social housing as there would be fever rental properties becoming available as property investors deserted the real estate market due to limitations on negative gearing.

“Governments throughout Australia need review their current expenditure levels rather than cutting tax incentives such as negative gearing.

“By dabbling with changes in property taxes, they will only distort the property market as has been the case with the previous change to negative gearing undertaken by the Hawke Labor Government.

“Property Club predicts that quarantining negative gearing to new home building would result a fourteen-fold increase in demand for new homes as currently only 7% of investors buy new.

“I have been investing in property for 50 years and these proposed changes to negative gearing will result in a huge increase in prices of new housing because supply would not cope with the huge surge in demand.

“Currently, new home building approvals are very sluggish and it takes at least two years before the new home building sector is able to meet any upswing in demand due to the time lag in construction of new homes,” he said.