Statutes Amendment (Budget 2016) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 4 August 2016.)

Mr VAN HOLST PELLEKAAN (Stuart) (11:43): It is my pleasure to rise on behalf of the people of Stuart to speak very briefly on the Statutes Amendment (Budget 2016) Bill. While there is an enormous amount of material that I could go to in this place with regard to this bill, I am going to contain my remarks to one issue, and that is the place of gambling consumption tax that has been brought into the budget by the government. The reason I do this is not because I think that gambling needs any support, particularly, but because it is just another example of how this government is a handbrake upon our state's economy.

Members interjecting:

The DEPUTY SPEAKER: Order! There is too much noise. I cannot hear the member for Stuart. All conversations need to leave the chamber.

Mr VAN HOLST PELLEKAAN: I say again that I have no desire to sing the praises of the gambling industry per se, but I do want to highlight that this is another industry that the government is penalising through its budget. It penalises many others unfairly. When it penalises this industry and others it disadvantages South Australia and South Australians. I will read an excerpt from a letter that has been sent to me:

This unfair Punters' Tax, that specifically targets South Australians, will make online wagering in South Australia more expensive than anywhere in the world and ultimately mean South Australian recreational punters bear the brunt of the tax through worse odds and less markets. The Punters' Tax will also significantly harm our local racing industry and potentially push punters like me to use unregulated, offshore betting sites that pay no Australian taxes whatsoever and have no interest in the integrity of Australian racing and sport.

The State Government should never stand in the way of my legitimate interests and leisure pursuits, nor treat punters like a cash cow. This tax is completely contrary to this. Targeting South Australian consumers who bet online is the thin edge of the wedge. Should I be paying more for my music online because I live here too?

That is the thrust of the public's view with regard to this tax. It disadvantages our state even further. For the benefit of the house, I will give a bit of background with regard to how this tax would actually be implemented. Technology enables tracking of a customer's name, address, IP address and payment method to inhibit possible fraud and money laundering. The source of funds and the destination of funds can be identified. A customer's betting history is readily available and can be used to identify any potential problem gambling issues and any unusual or suspicious betting activity.

I support without any doubt the need to ensure that we have no fraud in these industries, and I wholeheartedly support the need to identify and support anybody who might have a gambling problem. While I have no doubt that it is interested in those things, what the government is more interested in is the $9.2 million per year of new revenue that it will bring in. The government is clearly targeting these betting agencies. As has been quite clearly stated in the quote that I read out, this will actually push some participants in the industry to other offshore offerings outside of the ones that the government can control, so those desired outcomes of reducing fraud and supporting problem gambling will not be achieved by this and it certainly will inhibit the South Australian economy.

We have the highest taxes in the nation. This is another new measure that the government has introduced on top of the ever increasing emergency services levy, land tax, stamp duty and NRM levies, and under this regime we have the highest unemployment in mainland Australia. We quite often have the highest unemployment in all of Australia, including Tasmania. This is completely unsatisfactory. The fact that the government keeps taxing new parts of our economy year after year is directly contributing to the poor state of the South Australian economy, including the very high unemployment rate that we have here.

Let me put on the record that the industries, particularly the racing industries in South Australia which would be very seriously harmed by this budget measure, are incredibly important employers. I am sorry I cannot remember exactly, but it is something like the fifth or sixth largest employing industry in Australia. At a time when we need to be supporting employment as much as we possibly can, it is absolutely crazy to be thinking up new taxes to tax industries in ways that they have not been taxed in the past which will, without any doubt whatsoever, lead to those industries employing fewer people.

Let me finish by saying that I am not saying for a second that gambling is good. What I am saying is that it is completely unfair for the government to be hunting out every corner of the South Australian economy and applying new taxes in new ways to new industries because that is bad for our economy, and what is bad for our economy is bad for our society, because a healthy economy and a healthy community structure go hand in hand: you cannot have one without the other.

Ms HILDYARD (Reynell) (11:50): I also rise today to speak about one aspect of the Statutes Amendment (Budget 2016) Bill, that of the consumption tax on net wagering revenue. This issue is incredibly important as it ensures that large corporations pay their fair share of tax and, additionally, that resources are allocated to ensuring that our most vulnerable South Australians with a gambling problem get the support that they need. It also ensures that the profits of online operators who take bets in South Australia, often from our fellow South Australians, are taxed.

This bill makes amendments to the Authorised Betting Operations Act 2000 to introduce a place of consumption tax of 15 per cent on net wagering revenue. Effective from 1 July 2017, it will apply to all net wagering revenue from persons located in South Australia by all Australian-based wagering operators. I believe that if betting companies are making profits from average South Australian punters they should be paying tax in South Australia not in whichever jurisdiction their head office and servers happen to be located.

The place of consumption tax will apply to bets on horse, harness and greyhound racing and bets on sports such as AFL, cricket and soccer. It will also apply to other bets such as those on the winner of the federal election or the Academy Awards. The betting industry is rapidly changing and our tax regime needs to change with it. By implementing a wagering tax based on the place of consumption we are ensuring that businesses are paying taxes in the jurisdiction in which they are making their money.

South Australia will be the first Australian jurisdiction to introduce a wagering tax based on the place of consumption. A tax-free threshold of $150,000 net wagering revenue per year is proposed for all wagering operators. Based on 2014-15 data, the wagering tax is expected to raise around $9.2 million each year in new revenue. Importantly, from the revenue raised, $500,000 will be contributed annually to the Gamblers Rehabilitation Fund, the first time the industry will have contributed to this fund in this way.

This will ensure that the wagering industry contributes its fair share to help fund services to support and rehabilitate people affected by problem gambling. This is an incredibly important part of this policy as the social cost to our community of problem gambling in Australia is estimated to be at least $4.7 billion a year, and the issues that it brings for individuals and families in our community must be addressed. Nothing in this bill directly impacts the regular South Australian punter but it does enable support to go to those punters who find themselves in a place where they have developed problems with gambling.

Whilst problem gambling can be incredibly difficult on families in terms of money it is, of course, a deeper problem in many ways in terms of harm to the gambler and others. Problem gamblers suffer mental and physical health problems, find it difficult to hold down a job and struggle to maintain relationships. Anything we can do to help alleviate these issues for our community is an important part of the work that we do here.

Contrary to the 'stop the punters tax' media campaign, the South Australian government is taxing the betting company not the punter. The tax is based on the profits that betting companies make from punters. The more money that betting companies make from punters the more tax they will be required to pay and that tax rightly stays in our South Australia community. As SACOSS acting CEO Dr Greg Ogle said on 17 August:

Let's be clear, Sportsbet is a hugely profitable operation, and their reaction to this proposal to close their use of a virtual tax haven is outrageous and unsporting, or to use a different sporting term, it is an absolute dummy spit!

The proposed wagering tax is actually just about ensuring that corporate bookies like Sportsbet pay a fair share of tax, which in every sense is what provides them with a social licence to operate. It is clear this is not happening now under their Northern Territory registration—and even if they were taxed properly in the NT, we in South Australia would still not see any of it.

The proposed wagering tax is an important way to ensure that profits from South Australian betting are taxed in South Australia, and can be directed to services for South Australians—including support for the problem gamblers that live here and not in virtual tax havens where corporate bookies may choose to nominally reside.

The South Australian government does not consider that the tax on betting company profits would be passed on to punters, as betting companies will still seek to maximise their profits. It is clear to me that if betting companies are making profits from South Australian punters they should be paying tax in South Australia, like other South Australian companies and individuals do.

The amendments to the Authorised Betting Operations Act 2000 will also change the classes of licences granted for wagering. This will allow for a new licence class to accept bets placed over the phone, internet or other electronic means provided the licence holder has substantial business assets and infrastructure located here in South Australia. I commend this bill to the house.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 64 passed.

Clause 65.

The Hon. J.J. SNELLING: On behalf of the Treasurer, I move:

Amendment No 1 [Treasurer–1]—

Page 22, lines 22 to 27 [clause 65(2), inserted subparagraphs (i) and (ii)]—

Delete inserted subparagraphs (i) and (ii) and substitute:

(i) an association, or that is owned on behalf of a trust, that is established for the purpose of, or that holds the land wholly or mainly for the purpose of, playing cricket, football, tennis, golf or bowling or other athletic sports or exercises (other than vacant land or land used for residential purposes); or

(ii) an association, or that is owned on behalf of a trust, that is established for the purpose of, or that holds the land wholly or mainly for the purpose of, horse racing, trotting, dog racing, motor racing or other similar contests (other than vacant land or land used for residential purposes); or

Amendment carried; clause as amended passed.

Clauses 66 to 85 passed.

Clause 86.

The Hon. J.J. SNELLING: I move:

Amendment No 1 [Treasurer–2]—

Page 36, after line 5 [clause 86, inserted section 17]—Insert:

(4) For the avoidance of doubt, nothing in this section affects—

(a) indefeasibility of title of registered proprietors as set out in section 69; or

(b) the exclusive power of the Governor to prescribe fees or charges payable for or in respect of matters under this Act as set out in section 277; or

(c) the operation of the scheme for compensation set out in Part 18.

Amendment carried; clause as amended passed.

Clauses 87 to 124 passed.

Clause 125.

The CHAIR: We have a clerical error at 125(4). We are removing the words 'waste strategy' and substituting the words waste strategy, but without the inverted commas. Is everyone clear that it is just a clerical error we are sorting out here?

Clause passed.

Remaining clauses (126 to 132) and title passed.

Bill reported with amendment.

Third Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (11:59): I move:

That this bill be now read a third time.

Bill read a third time and passed.