WA Government Scraps Controversial Luxury Land Tax

by Mary Swire, Tax-News.com, London

12 October 2001

The West Australian government has decided to drop its controversial luxury land tax after concerns were raised over the fear that it may damage Labor's chances in the upcoming federal election on November 10.

The decision comes just two weeks after an announcement by the WA government defending the 2 per cent premium land tax on properties with a land value in excess of A$1 million. Acting Premier, Eric Ripper, said the tax would raise around $12 million each year and will only affect 900 properties in the region which represents less than one quarter of one per cent of the population.

But it appears the pressure was just too much for the government which made the announcement after an emergency meeting earlier this week.

Premier Geoff Gallop said the decision had been made in response to growing community opposition to the tax. He commented: 'We are a government that listens and we have heard what the community has to say, as a result, the premium land tax is dead. To replace this revenue loss, the Government will make up the $12 million shortfall through reduced spending in 2001-02.'

Taking a large proportion of the credit for forcing the government's hand is the West Australian Green Party. Greens Upper House member, Robin Chapple says he and colleague MLC Dee Margetts, met with six Treasury officials.

'Basically we explained we weren't particularly happy with the way they were going and we were asking for information that would give us other options. I think basically what's happened is that as a result of our discussions with Treasury they've gone back... it doesn't look like it's on, so they've pulled it,' said Mr Chapple.

Dr Gallop said the premium land tax was a response to unexpected budget pressures inherited from the previous Government. Those pressures still remained and had been exacerbated by recent world events. He said the new tax had been motivated by the Government's desire to protect families and small business, which had borne the brunt of the GST. 'It is clear, however,' added the Premier, 'that many people who would never have had to pay the tax believed it would some day apply to them.'

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