TAXATION

Mr GRIFFITHS (Goyder) (14:42): My question is to the Treasurer.

The Hon. K.O. Foley: Thank you.

Mr GRIFFITHS: I know he looks forward to it. How is it that, within the national economic context, the state government of Victoria has been able to deliver significant tax reform while he has not? The Victorian government handed down its 2008-09 budget yesterday, which included raising all land tax thresholds by about 10 per cent, raising all stamp duty thresholds by about 10 per cent, an unscheduled reduction in the payroll tax rate by 4.95 per cent, and reducing employer WorkCover premiums by 5 per cent to an average levy rate of 1.38 per cent.

The Victorian government has claimed that the tax cuts will save home buyers purchasing a medium home in Victoria over $3,600, while businesses in Victoria will see their state taxes and charges cut by up to 22 per cent.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:43): First, on the last Thursday in June I will rise in this place and present to the parliament the government's seventh budget.

The Hon. J.D. Hill: Hear, hear!

The Hon. K.O. FOLEY: Thank you.

The Hon. P.F. Conlon interjecting:

The Hon. K.O. FOLEY: Did I say the last Thursday?

An honourable member interjecting:

The Hon. K.O. FOLEY: No, you didn't hear properly.

An honourable member interjecting:

The Hon. K.O. FOLEY: I said the last Thursday in the first week of June.

The Hon. K.O. FOLEY: That would be 5 June. If you're not as quick on your feet as I am on mine, that's your problem, not mine.

Members interjecting:

The SPEAKER: Order!

Mr Hamilton-Smith: Thursday comes after Wednesday.

The SPEAKER: Order!

An honourable member interjecting:

The Hon. K.O. FOLEY: Yes, as we line up to greet the Governor. I quite like the member for Goyder: Steve is a good bloke. But I have to tell you, you have just got to be careful when the leader's office gives you a set-up question, because you have to have a look at it.

We have before the upper house of the state parliament a piece of legislation whereby, over a few years (and not very long), we will start to see a significant reduction in the WorkCover levy. And what are we seeing in the upper house? We are seeing an opposition playing blatant politics. We know that the opposition is happy to allow the unfunded liability of WorkCover to continue to blow out; it is marching towards $1 billion. The members opposite are happy to see business paying a 3 per cent WorkCover levy when they could be paying a lot less if they supported the government. But no, the opposition wanted to play with fire and put at risk—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: —a corporation set up under statute, with liabilities increasing to nearly $1 billion—

Mr Williams interjecting:

The SPEAKER: Order, the member for MacKillop!

The Hon. K.O. FOLEY: I never said that.

Mr Williams: You've been saying it for years.

The SPEAKER: The member for MacKillop will come to order!

The Hon. K.O. FOLEY: Unfunded liability: isn't that a liability?

The Hon. P.F. Conlon: Yes, a liability.

The Hon. K.O. FOLEY: Yes, it is a liability. The member might think it is just on paper; I am not quite sure where he gets his mathematics from. The opposition is prepared to have an institution continually head towards being financially crippled and for employers in this state to be paying almost three times the levy of Victoria, and not pass the legislation. If they have any decency after that question—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: —they should pass that legislation in the upper house this week. I make it very clear to business that, if they want to go along to the opposition's so-called tax summit next Monday, good luck to them. But the bona fides of the Liberal Party will be there for all to see (if members of the business community bother to turn up), that they refuse to make the one most significant business tax cut they can make, because they want that legislation to feed it. Come on, let's knock away the charade that is the Liberal Party on WorkCover. They want it sitting in the upper house for as long as they possibly can, because they are hoping that the Labor Party will have a meeting in which the opponents to WorkCover will be successful in—

The Hon. P.F. Conlon: He just said it.

The Hon. K.O. FOLEY: He just said it, did he?

The Hon. P.F. Conlon: Yes, he just said it.

The Hon. K.O. FOLEY: It has now been admitted, Mr Speaker, that he wants to play the politics of seeing the Labor Party, at a Labor Party meeting in the future, do something to make life difficult for the government and it somehow might lead—

Mr Hamilton-Smith: We might change our mind. Keep doing this, and we just might. Be careful.

The SPEAKER: Order!

The Hon. K.O. FOLEY: Oh, he is threatening me now.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: Oh, are you now? No, you are not supporting it.

Mr Hamilton-Smith: Don't overplay it, or you might shoot yourself in the foot.

The Hon. K.O. FOLEY: Oh, so now the Liberals are saying—

Members interjecting:

The Hon. K.O. FOLEY: You are playing games, Martin Hamilton-Smith. And don't you—

The SPEAKER: Order! The house will come to order.

The Hon. K.O. FOLEY: The Leader of the Opposition (I think I am right in hearing this) just said that I have sunk the Labor Party. He did: he just said that I have sunk the Labor Party. So, the Leader of the Opposition has now said that he intends not to pass the legislation. That is what he just said.

Mr HAMILTON-SMITH: Mr Speaker, that is blatantly untrue.

The SPEAKER: Order!

Mr HAMILTON-SMITH: I ask you not to allow mistruths to be told.

The SPEAKER: Order! If the Deputy Premier has misheard something said by the Leader of the Opposition by way of interjection, the Leader of the Opposition has an opportunity to correct that by making a personal explanation.

The Hon. K.O. FOLEY: It is quite clear that the Leader of the Opposition is playing games with WorkCover, a deliberate move by the opposition. He has now said, 'Don't overplay your hand, because we just might take our bat and ball and go home and allow the Labor Party to continue to have internal tensions.' Make no mistake, we have shown political courage as a government. Yes, there have been tensions in our party; yes, there are people upset by it; that is the bleeding obvious. We have shown a strength in this government and, notwithstanding the internal tensions in our party, we are driving through this necessary reform.

I would have thought that a conservative opposition, a so-called business friendly opposition, would accept that, at the end of the day, this is the right thing to do for the health of the organisation, and to cut it, publicly.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: You just said that you might not support it. Will you pass the bill? Yes or no?

Mr Hamilton-Smith: Just answer the question.

The Hon. K.O. FOLEY: Will you pass it? Yes or no?

Members interjecting:

The Hon. K.O. FOLEY: Will you pass it? Yes or no?

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. Foley: I think you're losing it, Marty.

The SPEAKER: Order! The Deputy Premier will take his seat.

Members interjecting:

The SPEAKER: Order!

The Hon. P.F. Conlon interjecting:

The SPEAKER: Order! When the Speaker comes to his feet members should become silent immediately. I should not have to damage my tonsils in order to bring the house under control. This is all rather unseemly. The Deputy Premier.

The Hon. K.O. FOLEY: That was one of the most bizarre things that I have seen in this house for many years. I think he is losing it. He just did the Marty shuffle. We just saw the Marty shuffle. It is the Marty shuffle you have when you are just completely losing it.

We want to see the cost of business inputs reduced in this state. That is why the single most productive measure in making this state a more business friendly, cost competitive environment is to reduce the WorkCover levy. In Victoria, they have taken it down, I think, to 1.3 per cent. We have before us in the upper house the one instrument that will deliver a tax cut to business well in excess of any other measure you may come out of your summit with.

Yet, what are they doing? The leader has made it very clear that I have apparently gone too far by saying, 'Pass the legislation' and that he may now not pass it. He is now saying that they may not pass it. I hope that somebody will put Mr Hamilton-Smith under some pressure—I would have thought from within his own party—to realise that, if it is your decision now not to pass the legislation, the $1 billion unfunded liability will be your fault. The 3 per cent levy paid by business will be your fault.

I will just ensure that every business person in this state understands that the reason they are paying three times the levy than Victoria is because of the Liberals. If we have a $1.5 billion unfunded liability, if we lose our credit rating, it will be the Liberals' fault. At some point you have to show some courage. It will keep growing. Unless we fix it, it will grow.

Mr Hamilton-Smith: Why didn't you bring the bill in last year?

The Hon. K.O. FOLEY: Oh, why didn't we bring it in last year? Martin, government is about tough, courageous decisions. Clearly, the pressure has got to the leader. I do not think that I ever saw you, premier, jump up and do a reel and a dance in your time in opposition. Marty, you are losing it. You are an embarrassment to your side of politics, but pass the legislation.

The SPEAKER: The Deputy Premier will now take his seat.