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Report Details


Committee Name:

Public Administration and Finance Committee (2001 - 2005)

House:

Legislative Council
Report Type:Report

Title:

Petition on Increases in Motor Vehicle Stamp Duty
Report No:9
No of Pages:57
Physical Location:Legislative Council Committee Office

Presentation Date:

11/12/2004
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Report No 9 - Petition on Increases in Motor Vehicle Stamp Duty (12 Nov 2004)
Inquiry Name(s): [Petition into Motor Vehicle Stamp Duty Increases


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Hide details for Executive SummaryExecutive Summary

1.On September 11 2002, Hon Barry House MLC tabled a petition in the Legislative Council requesting:
the Legislative Council to urge the Government to review the impact of its vehicle Stamp Duty proposals, in particular the potential for a negative impact on sales, loss of employment opportunities and the adverse impact of these factors on the West Australian economy.
2.The Public Administration and Finance Committee (Committee) has conducted preliminary inquiries relating to the content of the petition by writing on two occasions to the Under Treasurer and obtaining information from the Department of Planning and Infrastructure and the Australian Bureau of Statistics.
3.The Committee was interested in determining what sorts of economic modelling the Department of Treasury and Finance uses when considering the economic and equity impacts of a new or increased tax.
4.The Under Treasurer advised the Committee that the Department of Treasury and Finance’s ability to undertake complex economic modelling analysis of most measures was constrained by the narrowness of many of the State’s tax bases, which he explained as meaning economic impacts are generally sector specific rather than economy wide, and the general lack of reliable information on interrelationships between revenue measures and economic measures and economic indicators such as employment and aggregate demand.
5.The Under Treasurer advised the Committee that the Department of Treasury and Finance’s analysis looks at the typical impact of such measures on a variety of households, which includes considering representative households and/or businesses’ relative capacity to pay and whether taxpayers in similar situations would be affected in a similar way.
6.In relation to the State Government’s announcement of increases in motor vehicle stamp duty rates effective July 1 2002, the Committee examined stamp duty rates in comparative perspective and found that Western Australia has a progressive stamp duty structure. New South Wales, South Australia, Tasmania, Victoria and the Australian Capital Territory, have at least two rates of stamp duty, many vehicles being captured by a single rate. Queensland and the Northern Territory have flat stamp duty rates, that is a single percentage rate for all vehicles regardless of price.
7.The Committee also found that for lower priced vehicles, those under $25,000, Western Australia’s stamp duty rates fell somewhere in the mid- to lower range of rates in other jurisdictions. The Committee also found that for vehicles above $25,000 Western Australia has the highest rates of stamp duty.
8.The Committee considered it important to attempt to determine whether higher stamp duty rates, particularly at higher price points, were having a negative impact on new motor vehicle sales. The Committee was unsuccessful in obtaining the detailed information that would have been required to make a firm determination.
9.The information provided to the Committee by the Under Treasurer and the Department of Planning and Infrastructure, together with the information from the Australian Bureau of Statistics all indicate continued increases in new motor vehicle sales in Western Australia. The Committee also notes that recent Australian Bureau of Statistics data indicates that Western Australia’s continuing increase in new motor vehicle sales at 0.7 per cent per month was considerably higher than the national average of 0.1 per cent per month. The Committee is not able to comment on whether the growth of sales in Western Australia would have been higher had the new rates of motor vehicle stamp duty not been introduced.
10.The Committee notes the lengthy delay in obtaining information from the Department of Planning and Infrastructure in relation to new motor vehicle registrations in regional areas. The Committee makes the general comment that the information provided to the Committee by the Department of Planning and Infrastructure in September 2004, in relation to new motor vehicle registrations in country areas indicates an across the board increase in 2002, 2003 and up to September 2004.
11.The Committee has not been able to ascertain how many Western Australians are travelling to other jurisdictions with lower stamp duty rates to purchase their vehicles.
12.The Committee concludes that it has not found market data to indicate an adverse impact on the Western Australia motor vehicle industry and/or the Western Australian economy However, the Committee notes that it is difficult to draw any wide-ranging conclusions about the impact of increased motor vehicle stamp duty rates on Western Australians.

Recommendation
Page 20
Recommendation 1: The Committee recommends that the House note the information contained in this report.