The Labor-led state government have always made a sport of
bagging the federal Libs Commonwealth funding. Such a tactic deflects
criticisms of their poorly funded responsibilities, and when health and
education will feature heavily this election, the state Labor parties
do their bit bashing the Coalition over services.

In New
South Wales and Victoria, because their states’ revenue contribution
subsidises the smaller jurisdictions, their criticisms take another
dimension. The Premiers need only point to some wealthy Queensland
parasites to give the argument a little more punch (and in the
interests of deposing Howard, Peter Beattie endures their barbs with
gentle good humour).

As David Broadbent chronicled in The Age last Sunday,
the Bracks Government has escalated this ubiquitous ploy to a new
level, taking out expensive newspaper ads and television campaign
spraying the Liberals for allowing this gross injustice.

But
Steve Bracks is no innocent party when it comes to robbing Victorian
taxpayers blind to subsidise Queenslanders’ sunny lifestyle. As of 1
July, many Victorian investors will begin paying bucketloads of tax
directly to the Queensland Government. Paradoxically, this cross-border
revenue theft has emerged from a consequence of the state Labor’
abolition of a tax.

As of 1 July, Victorian borrowers will
be pleased to know that they will no longer pay Mortgage Duty in
Victoria (an average of about $1000 per loan). But if you are an
investor getting a loan over a Queensland property, you will find your
Victorian property subjected to a much a higher rate of Queensland Mortgage Duty (0.4% of the loan amount).

Currently,
where a loan is secured by properties in multiple states, the revenue
authorities apply a formula that spreads the revenue around based on
valuations of the mortgaged property.

But Queensland, having learned that Victoria has elected to no longer collect its share of Mortgage Duty, is now rushing through legislation to take it for themselves.

For
example: a Victorian resident mortgages their $400 000.00 Victorian
home to acquire a Gold Coast investment property worth $240 000.00.
They obtain a total loan amount is from both properties for, say, $500
000.00. Currently, Queensland would determine that 38% of the total
value of the mortgaged property belongs to them, and apply their duty
regime only that percentage of the loan. Victoria meanwhile reckons
that 63% of the loan ($315 000) is theirs, and collects Mortgage Duty
of $1224.00.

But as of 1 July, Victoria will collect
nothing, and instead $1260.00 more will be heading off to pay for
Queensland schools, roads and hospitals.

Ironically, had
Bracks simply introduced huge exemptions to Mortgage Duty, or even just
cut the rate, not one extra red penny would be heading to Queensland.
The Queensland Treasury pays no attention to the exemptions or rates
applied once the loan portions have been allocated.

Given
the amount of Victorian investment in Queensland, particularly the Gold
Coast, the lost revenue could quickly run into tens of millions of
dollars. What’s more, it will get worse if other Labor states follow
Queensland lead and mop up on Victoria’s spurned revenue.

Of
more concern for Bracks, having spent millions claiming that Victoria
is getting dudded on the federal funding, his Government’s actions have
left constituents unprotected from a pilfering Queensland Treasury.

Peter Fray

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