Stamp duty makes it more difficult to purchase a home. Not only does it increase the initial outlay required, but it also adds to the strain of meeting stringent savings requirements to secure a mortgage. But make no mistake, a land tax for homeowners is worse. It is effectively rent on what should otherwise be freehold land.

Two consequences of voting in a Labor government are you get big government and big business. This is evidenced by the Business Council of Australia calling for state governments to be rewarded for replacing stamp duty with land tax.

But why should homeowners pay rent on their land?

The simple fact is that our politicians are weak and have refused to do what should have happened after the GST was introduced. Sales tax at 20 per cent was abolished and so was the original BAD (bank account debit) tax, but stamp duty was meant to go, too.

Regrettably, political compromise that enabled the GST to be implemented at 10 per cent on most items, excluding most foods among other products, has not been reformed since.

State governments have lost their major sources of revenue and are now beholden to the federal government through their allocated share of GST revenue. Western Australia has struck a deal that makes the GST share less than fair, but that is a matter of vertical fiscal relations.

The argument for a land tax is its efficiency. Much like the GST, taxes that are based on transactions or as part of a user-pays system are predictable and reliable. Stamp duty revenue is inefficient because it depends on housing market conditions and the turnover of homes.

Land tax may be efficient, but land tax is rent. If you must keep paying for the land you own, then it is no longer freehold land.

There are other options. For example, the GST could be increased to 15 per cent and every product could be subjected to GST as per the original intention. This would require a fair distribution of revenue to the states and no doubt it would give the federal government even more power than it already has, but it is better than having to rent your land off the government forever.

Because renting your land off the government is called socialism. And socialism never works. It never has, and never will. Moreover, it is abhorrent that many Australian lives were sacrificed fighting against socialism, yet we are letting socialists, aligned with big business, pull the wool over our eyes without a whimper.

If state governments want to increase their ability to raise revenue, they should implement a road user charge for motorists. This should have been done by the federal government adding a road user charge to electric vehicles (as a starting point) to compensate for the loss of fuel excise revenue. It would also have made EV drivers pay their fair share.

Nonetheless, the federal government’s inaction provides scope for state governments to implement a road user charge, even though the Vanderstock case in Victoria in 2023:

‘…determined that the Victorian Government’s Zero and Low Emission Vehicle Distance-based Charge Act was invalid.’

The NSW government is considering a road user charge in the 2024-25 financial year, however, it:

‘…is working to assess the potential implications of the decision for NSW’s electric vehicle road user charge.’

The courts have made it more difficult to implement, but that doesn’t mean state governments should be weak and abandon road user charges. It just means they must get better at drafting legislation.

And while people will no doubt jump up and down about a road user charge, at least it is based on market principles. If you are a heavy user of roads, then you pay more. If not, you pay less. Those who are adversely affected could be compensated on a means-tested basis, or different arrangements could be made for cities and regional areas.

Much like with the implementation of the GST, prices would be rearranged but it would settle down quickly and everyone would be better off.

Instead, we have a massive road access fee through motor vehicle registration fees and a quasi-road user charge through fuel excise (unless you drive an EV where you are effectively a rent-seeker). Those who have the least fuel-efficient cars tend to drive the longest distances and pay the greatest share.

Some will say we’ve already paid for our roads through our taxes. But roads need to be maintained, new roads need to be built, and old ones expanded. If you don’t drive a car then you are subsidising those who do. If you drive an EV you are a rent-seeker. It’s a ridiculous arrangement that distorts the prices of almost every good and service in this country and it’s not fair.

However, implementing a road user charge is politically challenging and none of our politicians have the ticker to implement such important tax reform.

If you pay for your use of a road, you get something in return such as use of the road, road maintenance, and new roads. If you pay GST on purchases, you are paying a tax on the value added to the product. You get something for your money.

But if you pay tax on the land you already own, you get nothing in return. This is rent, nothing else.

In the meantime, big government and big business, the same two groups who wanted you to vote for the divisive Voice to Parliament, want you to pay rent for your freehold land forever.

Land tax is socialist and should be banned.

Mr Dutton needs to stand up to calls for land tax. Stamp duty needs to go, too. But tinkering with the system is weak, and we have had enough of weakness. There are smarter ways of improving our tax system and land tax is not it. Just ask Victorians.

But don’t hold your breath and get ready to pay rent on your ‘freehold’ land soon. The ‘big’ end of town thinks it will be good for you.

Dr Michael de Percy @FlaneurPolitiq is a political scientist and political commentator. He is a Fellow of the Royal Society of Arts, a Chartered Fellow of the Chartered Institute of Logistics and Transport (CILTA), and a Member of the Royal Society of NSW. He is National Vice President of the Telecommunications Association, Chairman of the ACT and Southern NSW Chapter of CILTA, and a member of the Australian Nuclear Association. Michael is a graduate of the Royal Military College, Duntroon and was appointed to the College of Experts at the Australian Research Council in 2022. All opinions in this article are the author’s own and are not intended to reflect the views of any other person or organisation.