The almost $700 million set aside for the Morrison government's HomeBuilder program might have been better spent helping states and territories reduce stamp duty in their jurisdictions, ACT Chief Minister Andrew Barr says.
In what might be seen as a veiled criticism of the contentious program, Mr Barr said governments needed to make sure the policies and reforms rolled out to assist the COVID-19 economic recovery were "quality spends".
Speaking at a Committee for Economic Development of Australia forum on Monday, Mr Barr said the economic rebuild was the perfect time for the Commonwealth to partner with the states and territories to embark on substantial reforms which would leave a "lasting legacy".
He said stamp duty reform was one example.
"What if instead of HomeBuilder, the Commonwealth had put the equivalent amount of money on the table for states and territories to reduce stamp duty?" Mr Barr said.
"What if there was a national partnership around tax reform? That would be a quality spend at this point in time."
The HomeBuilder program, which offers $25,000 grants to people wanting to buy a new home or carry out a renovation, was welcomed by the property sector when it was announced earlier this month.
But the housing stimulus package has been panned by economists, housing advocates and federal Labor, with most critics arguing the money would be far better spent investing in new social housing.
Mr Barr cited his government's public housing renewal program, and planned spending on the $500 million Canberra Hospital upgrade, new Woden CIT and light rail expansion, as the types of "quality spend" which would leave an "enduring ... long-term legacy from this period".
Mr Barr sat on the forum's virtual panel alongside NSW Treasurer Dominic Perrottet and Victorian Treasurer Tim Pallas, who are leading the states-led push for sweeping tax reform in the wake of the COVID-19 pandemic.
Both men are reportedly eyeing stamp duty reforms in their jurisdictions.
The ACT government is nearing the mid-point in its 20-year tax reform program, which aims to ultimately phase out stamp duty in favour of higher land-based taxes.
The program has proven highly contentious, in large part because the government continues to rake in hundreds of millions of dollars in stamp duty revenue in addition to the extra rates and land tax.
Mr Barr told his interstate counterparts that the reform had "not been without its political challenges".
"In the end it is worthwhile," he said.
"Ultimately, and we have seen this through two elections in the territory [which Labor won], that people will reward good policy. I wouldn't still be sitting here if my community hadn't endorsed this reform agenda."