Real estate stamp duties should be removed as they inhibit the movement of mining workers and undermine productivity, the head of the Treasury told a forum, according to a report.
According to a report in the Sydney Morning Herald, Treasury boss Martin Parkinson told an Australian Industry Group forum that state taxes on housing was one of the biggest drags on productivity.
He was reported as saying that these taxes inhibit economic adjustments, "whether they be individual workers moving from the Illawarra to Queensland or Western Australia to work in the mining sector, or whether a firm is trying to restructure its business".
"We need to encourage change, not to stand it in its way. That's why I make specific reference to state governments," he said, according to the SMH.
The newspaper said NSW made $3.9 billion from real estate stamp duties in the year to June, and abolishing the tax could be paid for by increasing the goods and services tax by a quarter, from its current rate of 10 per cent to 12.5 per cent.
The report added that the Henry tax review reported that "ideally there is no place for stamp duty in a modern tax system", as it discouraged property turnover and penalised property improvements.
"The only positive feature of stamp duty - its relative simplicity - has long since ceased to justify its continued use in the face of the costs it imposes on Australian society," the the review said, recommending they be replaced by a broad land tax, according to the SMH.