LAST year was a big year for the Property Council of Australia’s lobbying efforts on tax reform, a battle it fought on three fronts – the Ralph report, GST and stamp duty.
LAST year was a big year for the Property Council of Australia’s lobbying efforts on tax reform, a battle it fought on three fronts – the Ralph report, GST and stamp duty. Here’s how it developed.
FEBRUARY
The release of John Ralph’s A Platform for Consultation provided the first positive sign that flow-through tax treatment of property trusts would be retained.
APRIL
The Property Council submitted its response to Ralph, highlighting the dangers of taxing property trusts as companies.
JULY
After a three month Senate row over food, the GST received the royal tick of approval. The Property Council joined the Government’s inner tax circle with National President Carol Schwartz appointed to the influential GST Advisory Board. The Property Council released its GST guide.
AUGUST
At a Property Council luncheon, Prime Minister John Howard personally put to rest industry fears that stamp duty on property transactions would be maintained – or so it seemed. John Ralph handed Treasurer Peter Costello his final recommendations for business reform.
SEPTEMBER
Treasurer Costello announced his phase one response to the Ralph reform recommendations and the Property Council scored its biggest tax win of the year – the retention of flow-through tax treatment for property trusts.
The hangover kicked in as Mr Costello instead turned his guns on trading trusts and stapled securities – depreciation allowances for lessors were also in danger.
The Property Council launched a huge lobbying campaign while Costello mapped out the passage of the reforms through the Senate.
OCTOBER
The Property Council commissioned a report on the arguments for the retention of negative gearing.
The Democrats ‘breath-tested’ the Ralph reforms and found traces of revenue leakage. The Senate inquiry commenced.
The Property Council uncovered State Government plans to impose stamp duty on top of the GST and a massive media campaign was launched against this proposal.
NOVEMBER
The council’s negative gearing report was completed. Mr Costello launchedphase two of his business tax reforms, revealing a $4 billion revenue boost through tougher anti-avoidance provisions.
By contrast, a week later, the Senate releaseed its findings on the package – a $1.5 billion revenue shortfall.
The political environment heated up and Mr Costello’s very attractive revenue figures forced Labor and Democrats to the negotiating table.
Labor requested tougher anti-avoidance provisions and the Democrats called for a halving of the negative gearing arrangements.
The Property Council immediately released its Negative Gearing Report to the media and political parties while Mr Costello and Labor’s Simon Crean rejected the Democrat’s proposals.
Word spreads as the Property Council’s report generated forty-five media hits nationally. Under attack from all sides the Democrats backed down and negative gearing survived.
Meanwhile, Mr Costello side-stepped the Democrats and struck a deal with Labor, gaining full support for the entire package in exchange for tightening of anti-avoidance provisions.
DECEMBER
The Property Council launched a strong campaign on the GST 2005 issue, forming industry allies and widening lobbying efforts to include ministers and backbenchers from all parties.
The final Property Council submission on the Ralph reforms was tabled and passed to the major political parties.
