11 I think there�s a strong case, based on the principles of good tax design, for abolishing stamp dutiesentirely and replacing them with a more broadly-based land tax which includes owner-occupiedproperties (and which could be collected by local governments in exchange for a small commission,thereby allowing State Governments to abolish their revenue offices if they also outsourced thecollection of payroll taxes to the ATO). Low-income owner-occupiers such as retirees could becatered for by allowing them to defer land taxes as a charge against their estates (as some localgovernments already do with municipal rates), although one can imagine the howls of protests fromthe would-be inheritors of otherwise unencumbered properties at this suggestion. Obviously therewould need to be some transitional arrangements for people who had recently purchased propertiesto ensure they weren�t unfairly taxed twice, but they would not be too difficult to devise.
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Australia has aproductivity problem: over the past decade, labour productivity growth has averaged just 1.5% perannum, down from 2.1% per annum during the 1990s, while �multi-factor� productivity growth hasslowed from 1.6% per annum during the 1990s to zero over the past decade (and to -1.0% perannum over the past five years).
13 As a result, as Treasury Secretary Martin Parkinson noted earlier this year, �the rate of improvementin the living standards of Australians, at least that part measured by incomes, has already begun todeteriorate, even with the sustained and unprecedented rise in the terms of trade� (2011: 15). If thisproductivity slump were to continue, then once the current mining boom comes to an end(whenever that might be), the rate at which Australians� living standards continue to improve willslow more sharply, and could perhaps even turn negative.The causes of this productivity slowdown are complex, and there are no simple solutions to it. Buttax reform can certainly play a role in reversing it, not least by removing distortions and reducing�dead weight losses� associated with the existing structure of taxes, and by encouraging the movement of labour and capital into activities more capable of generating faster rates of productivity growth rather than into areas which attract favourable tax treatment.
