STATUTES AMENDMENT (BUDGET 2008) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 5 June 2008. Page 3508.)

Mr GRIFFITHS (Goyder) (15:55): I am the lead speaker on behalf of the opposition on this bill. It is a pleasure to provide a brief contribution and recognise that this is part of the reforms announced by the Treasurer in the budget on 5 June. It is fair to say that his changes to the first home bonus grant are important ones for all young people in South Australia who are looking to achieve that dream of owning their own home.

There is immense financial pressure, there is no doubt about that, and it is certainly a concern for all in this house as to where the next generation of property owners will come from, with the amazing increases that we have had in valuations over the last few years. That stimulates a lot of opportunity but it puts enormous pressure upon our young people to actually endeavour to own a home.

The change, as I understand it, will increase the threshold to $400,000, for the full amount of $4,000 of the bonus to apply, and then on a gradually sliding scale to $450,000 with a loss of $8 per $100 expended above the $400,000. I think that is how it is calculated.

We have done some comparisons between the South Australian scheme and other states. It is fair to say that it is not the worst; that is true, I acknowledge that. I also acknowledge that the Treasurer has responded to questions in the past about the affordability of housing for young people, at which time he recognised that we are not the worst, but we are not the best either. Certainly I am aware, from figures that I have reviewed recently, that first-home owners make up a seemingly ever decreasing percentage of the market.

In 2002, I think they represented something like 20 per cent of home purchasers, whereas now, or it might have been 2007, they are down to about 13 per cent. Any initiative that supports young people in purchasing a home is an important one. Certainly it will not provide a full rebate to those people for the cost of stamp duty. We know that from the median house price of around $364,000, I think it is, stamp duty costs of about $16,000 will be levied, but any move that does this is a help. My understanding is that it is an improvement upon the previous scheme that was in place.

I now move forward to the payroll tax changes that are also part of this bill. That is also a positive step. I think that all groups would acknowledge that there has been intense lobbying for many years to increase the threshold. Minor adjustments have occurred in previous years. They have been resisted for some time. The Treasurer on this occasion has resolved to increase it from $502,000 to $552,000. We know from last year's budget announcement that a drop in the rate from the previous $5.50 per $100 to $5.25, and then to a further $5 per $100 is an improvement.

Certainly Business SA, in its representations made to us and from what it has produced in recent years, has called for an increase in the threshold to $800,000. While increasing to $552,000 this year it will go up to $600,000 next financial year. However it is interesting: when the opposition held their tax summit on 12 May, it was put very succinctly to us by one chap who said that within his industry, which from memory I think was electronics, once upon a time to meet the payroll tax threshold you had to have about 20 employees, whereas now with the increase in wages costs, you only need eight.

An ever increasing number of small businesses are being burdened with payroll tax. I understand from reading the information provided by the Treasurer's office that some 300 businesses will no longer have to pay payroll tax as a result of the increase in the threshold. I am sure those businesses would appreciate that. In the past six years there has been an increase of 3,000 businesses across the state that have had to pay payroll tax.

Ms Chapman interjecting:

Mr GRIFFITHS: So 10 per cent of relief comes through to those businesses, with something like a 40 per cent increase in the number of businesses paying payroll tax. The change is important. From our perspective I acknowledge that there is a never-ending supply of priority projects on which revenues must be expended. The Treasurer and any future treasurer will face enormous challenges in ensuring that they have a revenue collection method that is fair and equitable to everyone.

We repeat the fact that major industry groups would prefer an increase in the threshold. At the tax summit I led a discussion group which included Peter Vaughan, and he pointed out the request for an increase to $800,000 and his position that, as part of some economic modelling that had been done, while there would have been a loss of revenue from it, it would have caught up quickly through the economic growth it would have stimulated. The Treasurer shakes his head. Accountants can put a spin on things. It would be interesting to see what happens in future years.

I confirm I am the lead speaker for the opposition. We recognise that any adjustments to stamp duty for first home buyers and payroll tax for the important businesses that exist in South Australia are progressive moves and on that basis we indicate our preparedness to support the bill.

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

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 3 passed.

Clause 4.

The Hon. K.O. FOLEY: I move:

Page 3—

Lines 29 and 30—Delete 'market value of the home to which the eligible transaction relates' and substitute:

consideration for the eligible transaction

Line 32—Delete 'market value of the home to which the eligible transaction relates' and substitute:

consideration for the eligible transaction

The amendments address a limited situation that could arise—not that one would ever expect someone to do this but you never know—where a house is sold, for example to a relative, for a relatively low price—well below the property market value—in order that the related party can access the First Home Owners Grant and the First Home Buyers Grant. That would be pretty sneaky, but we anticipate one or two people might attempt to do something like that. It should have been in the original bill, so I move these amendments.

Mr GRIFFITHS: The amendment was provided to us at the start of question time. I have not had a chance to consult with anyone but, given the wording of it, the explanation provided by the Treasurer and my own interpretation of what it means, I think it is appropriate.

Amendments carried; clause as amended passed.

Remaining clauses (5 to 10), schedule and title passed.

Bill reported with amendment.

Third Reading

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (16:05): I move:

That this bill be now read a third time.

This further demonstrates that this government is a well-oiled, slick machine which just hums along with its processes. We have it all together.

Bill read a third time and passed.