Opinion
Ambition confronts its limitations as Perrottet and Kean strive to put their stamp on NSW
Alexandra Smith
State Political EditorDominic Perrottet will have achieved his political ambitions if he manages to overhaul stamp duty. He has made no secret of that. Unlike Scott Morrison, who was not interested in a legacy, Perrottet wants tax reform to be his.
The premier is brave to embark on the biggest state tax reform in a generation at the end of the Coalition’s third term. For an ageing government – and with the NSW Liberal Party and its brand in turmoil – it’s a bold move.
Big ambitions ... NSW Premier Dominic Perrottet and Treasurer Matt Kean.Credit:Nick Moir
However, Perrottet is a believer. He is adamant that stamp duty is an inherently bad tax, despite its significant contribution to the state’s coffers. He also is convinced the abolition of stamp duty paid upon the purchase of a property – and its replacement with a broad-based annual land tax – would help with housing affordability.
Despite this passion, Perrottet’s pet project seems destined to fail before he has even revealed the fine print. New federal treasurer Jim Chalmers has shifted his language from his recent days in opposition, and seemingly has little appetite for expending political capital on helping the states with tax reform. It is hardly surprising.
That poses a big problem for Perrottet. The premier has made it clear the states cannot pull off sweeping reform such as this without the financial backing of the Commonwealth.
Victoria now seems half-interested in pursuing an overhaul of stamp duty, after putting it on ice during the pandemic. Perrottet is hoping the power of the two most populous states could be enough to strong-arm their federal counterparts into backing them. Health reform, perhaps. Tax, less likely.
Stamp duty reform will be in Tuesday’s budget, the final one before the March election, but it is likely to be a small start, limited perhaps to first home buyers. Perrottet’s reform plans may end up a pipe dream.
On top of stamp duty, the government has hinted there will be other housing-affordability measures in the budget. Perrottet has also championed the idea of a shared-equity scheme, whereby first home buyers would be able to use a contribution from the state for their deposit in return for handing over some share in the property.
That idea was also floated by federal Labor during the election campaign. Morrison shot it down, and Perrottet stayed silent. If the premier is serious about addressing the rising cost of housing in NSW, he will need more than stamp duty reform as a selling point in the budget and the election.
Meanwhile, NSW Treasurer Matt Kean has allowed the premier to take the lead on stamp duty so he can achieve his own personal goal. Kean wants to deliver a budget with a focus on women. It isn’t just “good social policy”, he says, but increasing female participation in the workforce is also critical for economic growth.
Kean’s big pitch to women is overhauling childcare, which means finding a way to increase the number of affordable and accessible places so women can return to work or increase their hours. There will be funding in the budget for subsidies for private operators to build or expand childcare centres or employ more staff, and fee help for families with children attending preschool.
Like Perrottet’s, Kean’s policy is also significant, although not in the same league as when he thundered that he was prepared to seize total control of childcare if his then Liberal federal colleagues refused to do more to make childcare more accessible and affordable.
Perrottet and Kean will be banking on voters seeing them not as risk-takers but as reformers who present as fresh faces in an old government. With the old guard (O’Farrell, Baird, Berejiklian) gone, the young blokes with big new ideas see themselves as electoral assets.
That does not mask problems bubbling away in the Coalition. Personal grievances continue to appear, and bad blood is developing. Transport Minister David Elliott, the resident troublemaker, labelled Kean a traitor this week after claims the treasurer was actively undermining Morrison during the federal campaign. “Matt Kean’s behaviour is nothing short of treachery and will be repaid in kind,” Elliott told 2GB. He was “disgusted”.
Kean denied any such treachery. He cast it as a robust discussion between friends. Nonetheless, some within the government are as prepared to criticise their own as they are the opposition. Perrottet had to tell both men to behave and show a united front for the good of the government.
Come Tuesday, Perrottet and Kean will have plenty to prove in this budget. Perrottet wants to show he can deliver on the reforms he has long boasted about; Kean is desperate to put his own stamp on the Liberal government and its legacy.
Two young Turks with big ambitions, both burdened by the constraints of time and realpolitik.
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