STATUTES AMENDMENT (BUDGET 2008) BILL

Introduction and First Reading

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (16:02): Obtained leave and introduced a bill for an act to amend the First Home Owners Grant Act 2000, the Stamp Duties Act 1923 and the Payroll Act 1971. Read a first time.

Second Reading

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (16:02): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

I move that this Bill be now read a second time.

This Bill contains measures relating to first home buyer assistance and pay-roll tax relief that form part of the Government's budget initiatives for 2008-09.

The Bill amends the First Home Owner Grant Act 2000, the Stamp Duties Act 1923 and the Pay-roll Tax Act 1971.

With effect from today, the Government will provide additional assistance to first home buyers through the replacement of the stamp duty first home concession scheme with a first home bonus grant.

First home buyers who qualify for the Government's $7  000 First Home Owner Grant ('FHOG') will also be eligible for a first home bonus grant of up to $4 000 if the market value of the home is less than $450 000.

The first home bonus grant will be available for first home contracts entered into on or after 5 June 2008 and for owner builders who commence construction on or after that date, subject to applicants meeting the FHOG eligibility criteria.

A $4 000 first home bonus grant will be provided in respect of first homes with a market value up to $400 000. The $4 000 grant will phase out for first homes with a market value between $400 000 and $450 000 at a rate of $8 for every $100 in excess of $400 000.

Where a first home buyer purchases land and subsequently builds a home on the land, the market value will have regard to both the value of land and the home built on the land.

The Bill also provides for an increase in the pay-roll tax threshold from $504 000 to $552 000 from 1 July 2008 with a further increase to $600 000 from 1 July 2009. The pay-roll tax rate will also be reduced from 5 per cent to 4.95 per cent from 1 July 2009.

Around 6 500 employers are expected to benefit from these pay-roll tax measures, including an estimated 300 employers who will no longer be liable for pay-roll tax when the threshold increases to $600 000.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

Part 1 and Schedule 1 will commence on the day of assent. Parts 2 and 3 will be taken to have come into operation on 5 June 2008. Part 4 will be taken to have come into operation on 1 July 2008.

3—Amendment provisions

This clause is formal.

Part 2—Amendment of First Home Owner Grant Act 2000

4—Insertion of section 18B

The Act will now provide for the payment of a bonus grant if the commencement date of the eligible transaction under the Act is on or after 5 June 2008 and the market value of the home to which the eligible transaction relates is less than $450 000. If the market value of the home to which the eligible transaction relates does not exceed $400 000, the bonus grant will be $4 000. If the market value of the home to which the eligible transaction relates exceeds $400 000, the bonus grant will be reduced by $8 for every $100 of value in excess of $400 000.

The market value of the home to which an eligible transaction relates will depend on the nature of the relevant eligible transaction. The Commissioner will be able to make a determination as to market value in appropriate cases. As is the case under section 60A of the Stamp Duties Act 1923, the Commissioner will be able to seek satisfactory evidence of market value or require a valuation to be undertaken if the Commissioner considers that this is necessary to determine market value.

As is the case with section 71C of the Stamp Duties Act 1923, special provision is made for situations where the home is situated, or to be built, on a genuine farm.

Part 3—Amendment of Stamp Duties Act 1923

5—Amendment of section 71C—Concessional rates of duty in respect of purchase of first home etc

This amendment will provide that section 71C of the Act ceases to apply to conveyances where the relevant date for the purposes of the section is on or after 5 June 2008.

Part 4—Amendment of Pay-roll Tax Act 1971

6—Amendment of section 9—Imposition of pay-roll tax on taxable wages

The rate of pay-roll tax imposed on taxable wages paid or payable on or after 1 July 2008 is currently 5%. The amendment made by this clause has the effect of reducing the rate in respect of wages paid or payable after 1 July 2009 to 4.95%.

7—Amendment of section 11A—Deduction from taxable wages

8—Amendment of section 13A—Meaning of prescribed amount

9—Amendment of section 14—Registration

10—Amendment of section 18K—Interpretation

The tax-free threshold is currently $504 000. The amendments made by these clauses relate to an increase in the threshold to $552 000 for the 2008/2009 financial year and to $600 000 for subsequent financial years.

Schedule 1—Transitional provisions

1—Transitional provisions

The transitional provisions will address various issues associated with the application of section 71C of the Stamp Duties Act 1923 and the period between 5 June 2008 and the date of enactment of this Act.

In particular, it will be necessary to ensure that the commencement of the legislative entitlement under new section 18B of the First Home Owner Grant Act 2000 does not lead to a doubling up of payments. Equally, a process needs to be in place in case a person receives an ex gratia benefit under the scheme that is to be established and then obtains a benefit under section 71C of the Stamp Duties Act 1923. A provision is also to be included to provide a right of recovery if a person obtains a benefit under section 71C of the Stamp Duties Act 1923 despite the 'closure' of the scheme under that section on the enactment of this measure (due to timing issues).

Debate adjourned on motion of Ms Chapman.