Queenslanders may recall the massive win had by Qld Premier Joh Bjelke Petersen, when he abolished this silly impost.

Capital flooded into Qld which greatly enriched that State and stimulated its economy, underwriting its capital works program and resultant prosperity.

DRAIN

Other States, when watching their coffers drain due to capital flight, were forced to follow suit, then the federal government did ditto.

Years later even Premier Palaszczuk is struggling to dismantle Qld’s prosperity pillars, notwithstanding lockdowns, loading up its debt with huge borrowings needed to fund the wages of her public sector entourage, and overall profligate spending. 

Why are death duties such a dud with regard to costing governments more money than revenue raised?

The answer is simple. The economy habitually produces much more when beneficiaries receive their inheritances, as they tend to invest or spend, the money circulates, the production of goods and services is directly/indirectly incentivised, and ensuing tax revenue and GST generated over time is higher than that derived from the tax, as the multiplier effect kicks in. 

Often if a beneficiary inherits a house or assets, then the State doesn’t have to fund a related pension or rental assistance, so the saving achieved over time is huge.

Whilst death duties are a “feel good” envy tax from the Left’s viewpoint, the net result is that the lower overall tax take leaves less for them to sponge from the community pie, so they should be mindful of what they wish for.

The cost of administration varies, but can also be high.

During World War II, Australian farmers were struggling to produce enough food to feed us, and to meet Britain’s wartime wool needs.

A NSW country family were hit with three successive levies when an uncle died, then the next beneficiary followed suit, as did his spouse shortly afterward.

The family was left with a crippling death duties debt to service, and almost had to walk off the property.

Its produce would have been lost to the war effort had they succumbed, as no-one else was placed to continue farming it. 

A sensible plan is to grow the economic pie and not shrink it, otherwise how will we fund pensions, Medicare, NDIS and other government benefits upon which we now depend!

The climate change kings already plan to deprive us of coal and agricultural export revenues, so eventually, what will we all live on! 

SIMPLETON

Enter the simpleton, who sees that Britain has death duties, as does California and other jurisdictions, so thinks that Australia is missing out on an easy earn by not following suit.

Britain levies about £5.2b a year from death duties (levied at the rate of about 40 per cent) which is comparatively tiny given the size of its economy, and that’s before the cost of collection.

This stipend is small because most people don’t pay it, but alternatively arrange to put assets in the names of other family members.

This latter exercise utilises accountants and lawyers, is costly, complicated and, worse still, is unproductive with regard to growing the tax take. California does ditto, and is likewise placed.

Whilst the simpleton might similarly seek to follow the global warmists over a GDP cliff, those more discerning may wish to look before they leap. 

Let’s look at an example of sound economic stewardship.