It’s time to abolish this regressive imposition on heavy vehicle registrations
Stamp duty is a bad tax from a transport business perspective. It is a drag on the industry’s productivity as it provides disincentive to purchase newer heavy vehicles.
NatRoad’s policy relating to stamp duty is that it should be abolished.
This policy is in part based on research which shows that replacing taxes on insurance and motor vehicle registrations with a broad-based property tax could make Australians up to $1.5 billion a year better off, an issue that deserves even more attention as the economic impact of Covid-19 continues to hit home.
Taxes that damage the economy must go.
In reinventing ourselves post-Covid there is an opportunity to better balance the taxation mix, inclusive of getting rid of stamp duty.
We have told an NSW expert inquiry that wherever possible, stamp duty should be abolished/phased out as it is an inefficient tax and is antiquated and out-of-step with a modern revenue system.
This message has been underlined in all major taxation inquiries held in this country.
There could be a transitioning process from the current to a future system and there should be substantial consultation on the broader abolition of stamp duty. But we urge the immediate abolition of stamp duty on heavy vehicle registrations, as the benefits to the economy would far outweigh the costs.
Stamp duty also acts as a direct tax on the uptake of newer, safer and more environmentally friendly vehicles.
The negative role of stamp duty is currently recognised in the New South Wales exemption for registration of new heavy trailers. Adding another three per cent to the cost of newer and safer vehicles through stamp duty at the time of registration can significantly harm the cash flow of heavy vehicle operators.
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Most operators are small businesses who work relentlessly to keep both capital and operating costs down.
Getting rid of stamp duty would benefit thousands of small businesses, a useful stimulus to assist with viability in the face of the pandemic.
If the states and territories are not going to abolish stamp duty, then at the least there must be a cap on, or a reduction in the percentage rate for stamp duty on heavy vehicle registrations.
Alternatively, the stamp duty regime for heavy vehicles could be better designed to give incentives to purchase newer, safer vehicles, as is currently the case with the already mentioned NSW exemption for registration of new heavy trailers.
Reform might also mean that stamp duty raised from imposts on heavy vehicles could be allocated to infrastructure spending that would benefit the heavy vehicle industry, such as improvement of bridges to allow high productivity vehicles better road access.
The message is clear: stamp duty reform is long overdue.
The heavy vehicle industry already pays too much by way of vehicle registration charges and the stamp duty impost adds salt to that wound.
Heavy vehicle charges must be fair, transparent and sustainable and be stamp duty free. Abolition of stamp duty or its radical overhaul must be a priority for all state and territory governments.
Warren Clark is CEO of the National Road Transport Association (NatRoad)