Bills

Land Tax (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 16 October 2019.)

Mr MALINAUSKAS (Croydon—Leader of the Opposition) (15:45): I rise to inform the parliament, to inform this house, that the Australian Labor Party in South Australia will be opposing this land tax bill. Our party cares about a great number of causes and there are a number of issues close to the hearts of people on this side of the house—legitimate issues and legitimate passions for a party orientated towards progress rather than the opposite.

Above all else, nothing is more central to the Labor Party's mission than two things: first and foremost, fairness and, secondly, jobs—fairness and jobs, jobs and fairness. These are the central missions of the Australian Labor Party. We would do well to contemplate these two key issues when we analyse and assess pieces of legislation that are brought into this parliament, or any other parliament, through our great federation and to ask ourselves, 'Does this legislation assist the cause of jobs and fairness?' On those two measures, the Australian Labor Party believes in this case the bill fails. It fails to meet either critical test.

Let's start with the question of jobs. As a Labor leader, I passionately believe that work has the capacity to provide all of us with dignity. There is no man or woman in this nation who does not deserve the opportunity to be able to enjoy all the dignity that work provides. I have repeatedly said, and I say in this house, I care less about what the work is than I do about the work in the first place. It does not matter whether you are a brain surgeon or a cleaner in a hospital, both jobs provide dignity. It does not matter whether you are the pilot or the air hostess, the retail worker on the check-out or you own the shopping centre—it matters not what you do—having a job in the first place provides every Australian with the chance to be able to enjoy the dignity that work provides.

Ideally, that work enjoys decent remuneration: a fair day's pay for a fair day's work. Ideally, that work enjoys stability of income. What matters first and foremost is that people have the opportunity to be able to work. We must contemplate the bill in the context of whether it assists job creation in this state or not. Unemployment in South Australia sits at above 6 per cent. It is the second highest unemployment rate in the nation. There are more South Australians unemployed today than at the last election.

We have listened to all considered minds in our state, to their views about whether this legislation assists job creation or not. I have sat down with individual small businesses, individual investors and indeed industry groups well respected in South Australia. The Motor Trade Association held a very specific round table for their small business members. Master Builders invited me along to an important forum only last week. Business SA, the chamber of commerce and peak small business spokesgroup in this state, facilitated another small business round table.

I have been in accountants' offices, I have spoken to lawyers and I have spoken to the Real Estate Institute. There is no-one in South Australia who has sought to advocate a position to the Labor Party who has not had their voice heard on this important issue. Almost every single one has expressed to the Labor Party, through me, through the shadow cabinet, that this bill does not assist the cause of job creation. In fact, they have made it very clear that they fear this land tax bill makes their task of increasing the number of jobs available to people, particularly young people in this state, a lot harder.

I can think of one specific instance that is worth sharing with this house, which is a panelbeating business, a hardworking family business that over the years has sought to grow their business not only for their own benefit but also for the benefit of our society as a whole, employing young people in the labour-intensive work of fixing up cars for all South Australians. This small business had me down to their panelbeating shop and explained to me that it was a family business and that, over a sustained period of time, they have invested in their business and it has grown and employed more and more people.

Because it is a family business, they have a family trust, as you do, they are developing succession plans and they are in the business of asset protection. Because they are committed to the long-term interests of this state, employing people for the long term into the future, they have sought to make strategic acquisitions of the land on which that business operates. They own the land on which the panelbeating business now sits, and the one down the road, and the one down the road from there, all to be able to protect that business long term.

They explained to me that this land tax change, on their assessment, on their advice, will mean an $80,000 land tax hit to their business. The consequence of this change to that business means only one thing: they made it clear that it will mean fewer apprentices coming on board this summer—fewer jobs in this state at the very time that we need the panelbeating business that I spoke to and the bakery that I spoke to employing more people, not fewer.

Building approvals in this state have taken an extraordinary hit over the last 12 to 18 months. It breaks all our hearts, I am sure, including the hearts of those members opposite, to see small and medium-sized builders here in South Australia going under, no longer employing the trades, no longer building new homes for young South Australian families, no longer providing affordable housing for those people who need it most, only exacerbating the problem of our already extraordinary waiting list at the Housing Trust.

These building approval numbers have us all incredibly concerned. We have heard from the Master Builders Association their unequivocal call to delay this because of the uncertainty in the economy that already exists on the back of the revaluation exercise that is being undertaken under this government's watch. We have seen the real estate market take an extraordinary hit in recent months because of the uncertainty that exists within the marketplace.

Builders, realtors and tradies are all wondering where their next job is coming from because of the uncertainty around these land tax changes, in combination with the revaluation process currently being undertaken, all of which are compromising certainty within the marketplace. This means fewer jobs, which leads to less activity at the very time this state needs it most.

All of those in this place with even the most elementary understanding of market economics would know that causing uncertainty in already volatile times only exacerbates the problem that we have within this already unseemly and unfair labour market. There is not an industry association, including the Property Council, that has not called for this process to be halted while the revaluation exercise is underway. Most industry associations continue to assert that this bill should not pass when it comes to the revaluation process continuing to be undertaken.

Then there is the question of fairness: are these changes fair, are they decent? The answer to those questions lie in two things, first and foremost in the outcome. However, the outcome is always informed by the process, and we must understand the process that this government has undertaken to understand the root of this measure's unfairness.

The process started with a broken promise. The Premier could not have been clearer: in the lead-up to last year's election he had a plan to reduce land tax. In fact, before a previous election, he said that he had a plan to take an axe to land tax, but make no mistake: the bill before this house now is an unequivocal tax increase. There are already a number of measures that are l-a-w—law—that enjoyed the bipartisan support of this parliament to pass land tax cuts. We supported that. But this bill is an entirely separate exercise, and all members opposite would do well to actually fact-check the remarks that the Premier has been making.

This bill provides for a net increase in tax revenue to this state. It is a land tax increase—a broken promise as clear as they come. Rarely is fairness found in a broken promise, but it is worse than that: this broken promise was thrust on South Australia in this year's state budget, handed down only approximately nine months after the first state budget. It was land tax 2.0 in this year's state budget. Then we saw Treasury and the government get their figures not a little bit wrong but astronomically wrong, to the tune of almost triple. This was not going to be a $40 million hit to South Australians through aggregation: this was potentially going to be a $118 million hit to South Australians on one account of the numbers.

That led to land tax 3.0. This was it. This was the final version of the land tax plan. Within moments of that plan being released, it was already being ridiculed by all quarters in South Australia: industry, property investors and small business owners. Then they put the bill out to consultation and tinkered around its edges: that was land tax 4.0. The Premier came into this house with that version of the bill only a fortnight ago, in the sitting week before this one. In the most recent sitting week, the Premier said, 'Here we have it. It's take it or leave it. No more changes.' More or less, those were the Premier's words.

Yet only last night did we learn that land tax 1.0 had bitten the dust, that land tax 2.0 was not going to pass the pub test and that 3.0 was reworked into 4.0. Now we have the fifth version of land tax in a matter of months. This is an absolute farce. I cannot think of a more profound example of policy on the run than this one. Our Premier is chopping and changing his position and fishing around for conviction, only to find it and then change his mind again, all on the back of the advocacy of one industry group and without consulting the thousands of others that are invested. This has been a shambles of a process.

Then, when we contemplate the other fairness element of the outcome, where do we find ourselves? We find ourselves contemplating a bill that is a retrospective change to tax law in this state, pulling the rug out from underneath the feet of those whose only crime is to work hard and obey the law. Both sides of politics seek to claim the virtue of hard work. We have heard it all before—Australians have heard it all before—but here is the reality: hard work is not a Liberal Party virtue and it is not a Labor Party virtue; hard work is an Australian virtue.

It is the thing that has made our country great: the idea that every last person deserves the opportunity to work hard and to provide a decent standard of living for themselves and their family. With a little bit of extra sacrifice, they might have the ability to have a decent, well-funded, self-funded retirement and maybe even the ability to provide a better chance for their families and their children into the future. That is the collective Australian dream. A lot of people have gone out of their way to do exactly that.

When we set up our process, our series of public forums throughout the state, we heard from family after family, self-funded retiree after self-funded retiree, postwar migrant one after the other, coming to our forums and telling in graphic detail their stories and what this retrospective tax hit means to them. They did not see this coming. No-one saw this retrospective tax change coming.

The practical implication of this legislation passing for them is a fundamental attack on their standard of living, a fundamental hit on their ability to sustain that for future generations of their family and a fundamental compromise of their hope and aspiration that in places like this one there is a bipartisan commitment to an idea that that Australian dream survives for everybody and is not subject to wholesale radical change without at least taking it to an election, which goes to the final point of the unfairness of this and this process: not once has the Premier (member for Dunstan) or anyone else across the aisle decided to claim mandate because they promised they would do the exact opposite to what is occurring here since the election.

These laws do not facilitate more jobs in our state. The process has been a farce. The process has been a complete shambles. Ultimately, for us on this side of the chamber, we must contemplate our position in the context of those representations that have been made to us through the prism of jobs and fairness above all else. I will acknowledge the existence of an argument that we have heard on this side of the chamber quite a number of times in recent weeks, and that is that there is a political expediency to Labor allowing this bill to sail through the house. I accept that a hard-headed political view may come to that conclusion in a way that, to them, may seem rational.

They may take the view that it is politically expedient to let people who have been Liberal voters in the past feel the wrath and the consequence of a bad Liberal government. Is that really what we want to be about? When we go out to our electorates and we talk about the virtues of jobs and fairness, are we only talking about them for the people we perceive support us, or do we have a higher order principle here to try to ensure that jobs and virtue are not just things we want to provide for people who vote Labor, that the Liberal Party is only interested in jobs and virtue only for those people who vote for the Liberals? We have to be better than that. Jobs and fairness are things that everybody deserves.

We cannot just be making political decisions that are expedient with the hope that somehow it increases our chances of victory at the next state election. There are real people whose real lives are on the line here. They have come to our forums, they have shared their stories, they have shared their hopes and aspirations for their children. They share their work ethic in the pursuit of the Australian dream in the hope that someone will hear their voice and hear their call, and I want to respond to some of those people directly.

I heard from a self-funded retiree who has investments in Renown Park, Greenacres and Hendon of between $300,000 and 450,000. They are a classic smaller time investor. Their subs, they have been advised, go from a $295 a year land tax bill to over $7,000 a year. That may have adjusted at the margins as a result of land tax 5.0, but, nonetheless, a land tax increase that is somewhere in the order of 2,000 per cent.

Another story goes to who the real beneficiaries of these changes are. Ask yourselves this as you cogitate on this bill: who are the winners? The government is making more money, but the land tax rates are coming down dramatically at the top end. But if the tax rates are coming down and the government is still making money, who is paying? Who pays? Someone has to pay. The answer came from someone at our land tax forum in Lockleys: Helen, a self-funded retiree. She put it rather eloquently. She said, and these are her words:

We are in this position because Marshall and Lucas have a hunger for more money. They have formed a sandwich. Let me put that sandwich together for you. On the bottom we have $450,000 people paying no land tax. On the top, we have the top bracket who will benefit from the land tax rate coming down from 3.7 to 2.4. And in the middle is all of us. We are the meat in the sandwich—the mums, dads, self-employed and retirees and the others who are the disadvantaged. This will destroy us. Hands up who are in this boat.

She asked for a show of hands at the Lockleys forum and almost every last person put up their hand. That is who is paying. We will not let this pass.

To the self-funded retiree who has worked incredibly hard to reduce their burden on the Australian taxpayer, we have heard your call; we will not let you down. To the small business owner doing nothing more than trying to provide a living for themselves, their family and future South Australians, we have heard your voice; we will not let you down. To the postwar migrants and everybody else who still believes that the Australian dream should belong to everybody without the government taking it away from you on a whim, we will not let you down. We will oppose this bill and always give a voice to the voiceless and put jobs and fairness first.

Mr PEDERICK (Hammond) (16:06): I want to talk about reform and something that the previous government did not want to go near for 16 years: reform to how we fund this state but giving equity to people from across this state. What we saw in the 16 years before our government was just the profligate raising of taxes across the board—whether it was the emergency services levy or whether it was a whole fleet of taxes. There were attempts to tax the banks. The car park tax went beautifully.

We saw how unfairly South Australians were treated, because the simple fact is that governments have to raise taxes. They have to do it equitably because somewhere down the line there is always someone with their hand out, but we also have to be able to fund all the needs. Whether it is in education, whether it is in health, whether it is in police or community services, whether it is in agriculture—something dear to my heart—whether it is in every portfolio right across the board, whether it is in justice and law reform in the Attorney-General's department, everything needs funding.

There is a novel view that people sometimes have out there in the community, that is, they say, 'We'll just get the government to pay.' Governments do not have their own money. They only have taxpayers' money, and you have to deal with it wisely. I take my hat off to what our government is trying to do here with some massive tax reform to bring land tax more into line with something that is not just more equitable here in South Australia but comparable to other states in this commonwealth.

What we are trying to do with this land tax reform as a Marshall Liberal government is to reduce total revenue collected from land tax and to implement a fairer, more competitive land tax system. We have put this package together, we have consulted and it has now been amended quite significantly. It includes increases in the tax-free threshold, cuts to the top land tax rate and amendments to the aggregation rules to ensure a fairer system.

In regard to the land tax package, there will be an immediate reduction from 1 July 2020 in the top tax rate from 3.7 per cent to 2.4 per cent, which will be equal to the average rate for all mainland states. Increasing the tax-free threshold from $391,000 to $450,000—this is one of our reforms before we made some more slight adjustments—from 1 July 2020 will provide relief to all taxpayers. In fact, 9,300 current taxpayers will no longer pay any land tax. We will reduce the amount of revenue collected in land tax by $70 million over three years.

As I indicated in regard to aggregation, we will have rules in place similar to New South Wales and Victoria to ensure that we have a fairer system. This will stop the possibility of investors who own multimillion dollar property portfolios not paying a single dollar in land tax. Yes, some people have said, 'We don't want to do that,' and, yes, they have operated within the law now, but what we are trying to do on this side of the house is make it equitable across the board. We are also ensuring that self-managed superannuation funds are not impacted by the reforms. So 92 per cent of individuals will be pay less land tax, which is 47,800 people.

The Hon. D.C. van Holst Pellekaan: More now.

Mr PEDERICK: It is more now with these other reforms that we are bringing in place and I will talk more on them in a moment. Yes, there will be some people who will pay more land tax. Seventy-five per cent of company groups will pay less land tax and some will pay more land tax. In regard to trusts, some will pay more and some will pay less. It is difficult to work through the exact numbers, but people will have the option to nominate beneficiaries so they can work through that with their accountants.

Since the June budget, the government has consulted widely and listened to concerns expressed about aspects of the proposed reform. The fact that the government has significantly amended its reforms demonstrates the good sense of consulting widely. In regard to issues around tax rates, there is a very consistent message coming from the consultation that, if we are intent on adjusting the aggregation rules, the top land tax rate had to be reduced more quickly and closer to the national average land tax rate.

In regard to the rate, the proposed top rate will be 2.4 per cent, compared with Queensland, where it is 2.75 per cent; Western Australia, 2.67 per cent; Victoria, 2.25 per cent; and New South Wales, 2 per cent. We have come to the conclusion that we will work on the average, and the average of the mainland states is 2.4 per cent. In Western Australia, there is also a 0.14 per cent Metropolitan Region Improvement Tax payable on site values. The threshold in South Australia for the top tax rate will still be the lowest for all mainland states.

Certainly, aggregation is not new. Aggregation rules already exist. It is about getting equity between some people paying tax and some people who do not pay tax. Yes, it is change and there will be some people who will pay a little bit more tax, but the vast majority of people across South Australia will pay less.

Something we have listened to and flagged in our most recent amendments is in regard to the so-called mum-and-dad investors who own multiple properties, either by themselves or jointly with another individual, and clearly receive a sufficient return from rental income to justify continued investment in multiple properties. In regard to that, we have some amendments to help secure this legislation and make sure that we can get it through if people have a good look at it. This could be a once in a generation opportunity for land tax reform in this state.

The new amendments in regard to this reform increase the threshold where the top land tax rate of 2.4 per cent commences. The threshold for the top land tax rate will be increased by $250,000 in 2020-21, from around $1.1 million to $1.35 million. The threshold will then be increased by a further $250,000 to $1.6 million from 2022-23. The top rate will be indexed annually by site value growth post 2022-23, consistent with existing practice.

The amendments also introduce a new marginal tax rate of 2 per cent between the previous top threshold of around $1.1 million and the revised top threshold. We will also introduce a requirement for an independent review of the impact of the total land tax reform package in 2023. I think that a review of the legislation is a good outcome. This will include the amendments introduced in the 2018-19 and 2019-20 budgets.

The draft Land Tax (Miscellaneous) Amendment Bill 2019 was introduced in the parliament on 16 October 2019. The legislation included the introduction of a new approach to aggregation and a reduction in the top land tax rate to 2.4 per cent for the taxable site value of land above a top threshold of around $1.1 million from 2020-21. As I have indicated concerning the amendments to the bill, under the existing provisions of the Land Tax Act 1936, thresholds are indexed annually by growth in the average site value of land subject to land tax as determined by the Valuer-General.

The top threshold in 2020-21 is estimated to be around $1.1 million under the bill introduced into parliament. It is proposed that the threshold for the 2.4 per cent top tax rate will be increased by $250,000 to $1.35 million in 2020-21 and 2021-22. The threshold will be further increased by $250,000 to $1.6 million from 2022-23 and then indexed annually in line with average site value growth as per existing legislative provisions.

In conjunction with the increase in the top threshold, the bill proposes to introduce a new marginal tax rate of 2 per cent on the taxable site value of land between the existing top threshold of around $1.1 million in 2020-21 and the proposed new top threshold, rather than 1.65 per cent. This reduces the budget impact of the increase to the top threshold while still delivering further tax relief for taxpayers.

In regard to general land tax rates, the higher trust surcharge land tax rate incorporates an effective surcharge of 0.5 per cent for certain trust-held land, capped at a maximum tax rate of 2.5 per cent. Under the new proposed structure, the trust surcharge will be a maximum of $7,565 in 2022-23 compared with $5,825 under the current proposed structure. The increase in the maximum trust surcharge under the revised rate structure reflects the increased maximum threshold.

In regard to having an independent review of the legislation, it is proposed to include a provision in legislation for an independent review of the overall impact of the land tax reform package in 2023. The review will consider whether the estimated value of relief has been delivered to taxpayers. It will include all the land tax reforms introduced by the government since coming to office, including those legislated following the 2018-19 budget.

Reform is not easy: it is difficult. We have trodden a path to get to where we are today debating this legislation. We are a reformist government. We have already given businesses massive relief by lifting the payroll tax threshold to $1.5 million, and also to taxpayers right across the state in giving $90 million relief annually with respect to the emergency services levy. I commend the work we have done in working through this process. In an imaginary world where everything just happened, you would not pay any tax, but it just does not work like that.

The Hon. D.C. van Holst Pellekaan: We wouldn't have any roads or hospitals or schools.

Mr PEDERICK: Exactly right. As the Minister for Mineral Resources rightly says: you would not have any roads, you would not have any hospitals, you would not have any education. You would not have a functioning police service; you would have anarchy on the streets. The simple fact is that, as a government, you have to find a way, as equitably as you can, to raise taxes but also to deliver those vital services right across the board to the people of this great state.

I own some properties. I have my principal place of residence, I have a farm at Coomandook, I have an investor block in Murray Bridge and—

The Hon. S.C. Mullighan: Is this a confession?

Mr PEDERICK: Just a declaration.

Members interjecting:

Mr PEDERICK: Well, you can look up my register of interests. I am sure some people take more interest in it than others. It is not a long list. I am only a humble person from Coomandook. So, I have an investor in Murray Bridge and I have one up here in the city. There may be some changes to how I pay land tax, and I will look at that when the time comes. I will work through it if there are any changes in regard to this legislation going through.

We see that members on the other side hate reform. They hate the thought of reducing the top tax rate from 3.7 per cent to 2.4 per cent. They hate the idea of actually saving money, because the Labor Party has only one thing that runs through its veins, and that is to tax people—to tax them out of existence.

Mr Brown interjecting:

Mr PEDERICK: You can contribute later.

Mr Brown interjecting:

Mr PEDERICK: No, that's great. What we need to do is to get this legislation through this place, get it into the other place and get it enacted so that we can get fairness and equity for investors in this state, and also to have a land tax regime that is closer to what is happening in other states. We hear people say, 'People will just move,' and do this and that. Well, I have already read out that most of the top tax rates are higher across the board and aggregation rules exist in other states, so where are people going to go?

I will be interested in the debate on this bill. There has been a lot of conversation out in the community and in media circles, but as far as I am concerned we need to seek equity for the South Australian taxpayer. We need to give them the opportunity to pay less tax, because what this proposal does is that over time it actually reduces the overall land tax burden to the constituents in South Australia, and that is something that the Labor Party hates. I commend the bill.

The Hon. S.C. MULLIGHAN (Lee) (16:24): I rise to speak on the Land Tax (Miscellaneous) Amendment Bill and indicate that I am the lead speaker for the opposition. Can I say at the outset that this government fools no-one about this bill. This is not a land tax cut: this is a land tax increase; it increases revenue to the government's coffers. Those opposite, starting with the Premier, talk about equity. There is no equity in this measure.

This bill raises over $80 million a year in land tax revenue from one cohort of landowners and provides around $60 million a year of land tax cuts to the very top end of the landownership scale. The majority is being taxed more to pay for tax cuts for the minority at the top end. That is not equity. Those opposite say, 'Oh well, you have to raise revenue. Government costs money, and in an ideal world you wouldn't pay any tax.' I know that is the Tory fantasy, but you have to understand how we got to this situation.

Before the last election, the Liberal Party made a number of commitments with regard to tax policy. They said that they were going to return the remissions on the emergency services levy, they said that they were going to cut payroll tax, and they said that they were going to cut land tax. In their first budget, which they handed down in September last year after they were the beneficiaries of a deluge of more than $300 million a year in additional unplanned, unbudgeted GST revenue, not only did they lock in those tax cuts but they stood by their word and wound back part of the emergency services levy remissions, as I have already mentioned in the house.

They did meet their election commitments on land tax; however, rather than providing $32 million of relief upon forming government, they discovered that the cost of the land tax package they promised in the lead-up to the last election was over $47 million in the 2020-21 financial year and then over $28 million in the subsequent financial year. They also made commitments about land tax and included those in the budget measures bills which were provided to the house. The Labor opposition supported those land tax changes. The Labor opposition also supported the payroll tax changes, with one change. We tried to move an amendment to bring those forward; that was unsuccessful, but we supported those tax changes.

Those land tax changes contained in the Budget Measures Bill of last year's budget provided $150 million in tax cuts over three years. The government have now found themselves in a situation where the tsunami of additional GST revenue has receded. They have found that they have to come up with a range of measures to raise additional revenue in order to try to fill their budget black hole, which was caused not only by their ongoing, extraordinary increases in expenditure but also by the return to trend levels of GST revenues.

We have previously spoken in this place about the $500 million over four years of fee increases, charges and new taxes from the government. In addition to that $500 million in additional revenue already contained in this budget comes this new land tax aggregation measure. We know that it was rushed in late into the budget process. We know that it was hastily rushed into a budget cabinet committee meeting, which the Premier did not attend, and we understand from government sources that it is his wont not to usually attend those meetings.

It was subsequently washed through the budget cabinet committee meeting and it was sold, as we understand it, by the Treasurer to his cabinet colleagues and subsequently to the Liberal Party room as, 'No need to worry about this. This is just closing off a loophole, nothing to see here, it's fine, it's no problem whatsoever.' It was a $40 million increase to revenue. That is what the government was trying to achieve. This is nothing other than a tax increase and has been so from day one.

All the rhetoric of those opposite, deliberately and misleadingly conflating it with the already legislated land tax reductions from last year's budget, everybody sees through that. Nobody believes the Premier when he stands up here in question time and tries to claim that this latest land tax proposal is a land tax cut—because it is not. It is not at all: it is a tax increase. We know that because the Treasurer confirmed so on ABC radio this morning.

He confirmed that these latest land tax proposals increase land tax revenue to the government in the order of about $20 million a year, each year, for the next three years: a $60 million land tax hike. That $150 million land tax cut legislated last year has now been watered down to $90 million to try to fill Rob Lucas's budget black hole at the same time, of course, as he has the bagless Dyson sucking extra cash out of SA Water and every other government business and he is raiding every other hollow log he created in the former budget for himself. This is a tax increase.

I want to come back to the choices that the government had available to them, aside from introducing this aggregation. Before I do that, we will continue walking through the chronology of how the government have found themselves with six different versions of land tax policy since the election. There was the policy they took to the election, the revised budget measure in last year's budget, now legislated, providing a $150 million over three year tax cut. Then there was the rushed measure, the aggregation measure, hastily whacked into the budget at the last moment to provide an extra $40 million of revenue per year.

We also know that it was rushed in because there was no modelling available. It is the only tax measure I can recall being moved through the parliament where there was no detailed information to the opposition, or indeed to all members of parliament, about the impacts. There was no detailed modelling that was available. In fact, there still is no detailed modelling available. We also know that it was rushed in because there was no draft legislation, there was no bill on this, there was no set of amendments that could form part of the Budget Measures Bill.

This is despite being told by the government, 'This is fine, this is par for the course, this is what you get in the Eastern States. They have had this and they have legislated this.' Well, if it is so simple, if it is so par for the course, if it is so de rigueur amongst Liberal governments, why did they not pick that legislation up and tailor it for South Australia and make it part of the Budget Measures Bill? Because it was rushed and they did not realise what they were doing.

We know that they did not realise what they were doing because, when nobody believed that the introduction of this aggregation measure would raise only $40 million, Treasury undertook some further work and, lo and behold, it was $118 million a year—a $118 million a year tax increase. That modest offset that they also proposed in this year's budget to incrementally reduce the top marginal tax rate for properties valued at over $5 million, from 3.7 per cent down to 2.9 per cent over a period of seven years—now that they had three times the amount of revenue to play with—they decided to massively accelerate reductions in the top marginal rate.

While leaving the full impact of aggregation—three times the impact, mind you—on landowners here in South Australia, they used some of that additional revenue, three-quarters of that additional revenue, to try to buy off the top end of town, led by Daniel Gannon and Steve Maras at the Property Council, their most vocal critics. At that point in time, the Property Council's membership knew how damaging this aggregation measure would be to the property industry, to the real estate market, to the housing construction industry and to all those other parts of the South Australian economy that support those areas of economic endeavour.

The campaign began against the government's massive tax hike. Over the subsequent weeks, the government worked up a package where, to try to offset the impact of that $118 million a year tax increase through the imposition of these aggregation changes, they could try to provide some more tax relief once again at the very top end. The proposal came back to introduce a new top rate of 2.4 per cent and have it take effect from what had previously been the third highest threshold, estimated to be $1,980,000 worth of taxable land.

To give the government a modicum of credit, that did cause some landowners to sit back and think, 'Well, actually, I wonder if I am better off here?' That consideration, as you could understand, took some days amongst some of those landowners. They had to work out their own circumstances, apply what they understood to be the aggregation measure against their own landholdings and then work out how that would change for the 2.4 per cent.

After those landowners made that calculation, all bar one said that they were still unsatisfied with the impact of aggregation because they knew how deleterious it would be. The one, of course, was Harry Perks. I assume that he will be happy with whatever the Liberal government does in this space because he has to maintain the fluttering of the Liberal flag regardless of the economic and social cost, but the rest of the landowners in South Australia knew that the retention of aggregation would be so damaging that it could not be supported.

The government, in releasing a draft bill for consultation with these changes, saying that they were happy to hear from people—mind you, they were not going take any further changes but were happy to hear from people—embarked on a four-week or so period of consultation, and some further minor changes were made to try to garner the support of select areas of the property development industry, in particular those people who are most interested in greenfield developments being facilitated by property trusts.

The government tried to come up with a regime, as it currently stands in the bill that we have before the house, where they would get some relief from the implementation of these aggregation measures. But, other than that, that was it, and the Premier said, 'No further changes. That's it. We don't need to make any more changes. We don't see the need. This is it. This is as good as it gets. It's this. Take it or leave it.' The bill was introduced last sitting week, which was 16 October as the member for Hammond has advised the house, and here we are, less than two weeks later, getting ready to debate the bill.

The government puts out its weekly program late on Friday and the land tax bill is listed as the first bill for debate, but something happened between Friday afternoon and Monday afternoon. What we understand from reports in the media, who had been contacted by members of the Liberal Party, is that it became clear to the leadership of the government that some members of the Liberal party room reserved their right when it came to whether they would support this bill. They reserved their right either to oppose it or to abstain from the vote.

So we have the most recent iteration of this land tax bill: rushed changes at the very last minute, put together over the weekend to try to appease those members of the Liberal backbench who the government were worried might cross the floor or abstain from voting and lead to the second embarrassing defeat on the floor for the government on a vote.

Who did the government consult with? Only one group, as far as we know, and that is the Property Council. The Property Council, led by Daniel Gannon and Steve Maras, have said repeatedly—for the last 140 days, as they like to tell us, keeping the days counted accurately—that aggregation is the issue: 'Any change that contains aggregation is unacceptable, and as long as the bill has aggregation in it we can't support it.' This is exactly what the Property Council said, but at the last minute, for a minor additional change to rates and thresholds contained now in the amendments filed in the Deputy Premier's name, the Property Council have abandoned their position on aggregation.

For an additional benefit of a new rate of 2 per cent to apply to a relatively narrow band of properties valued between $1.1 million and $1.35 million, there will be a reduction from the previously mooted 2.4 per cent—so a 0.4 percentage point reduction for up to $250,000 worth of land. If you have land valued at the full $250,000, the maximum benefit is $1,000. When that further increases from $1.35 million to $1.6 million, that is a further $1,000.

The Property Council is happy to abandon their position on aggregation for a further tax cut for the few thousand landowners at the very top end of the land tax scales so that they can have between $1,000 and $2,000 extra in land tax relief. That is everyone from $1.35 million all the way to the top end of the scale, all the way to the top land tax pay rate, if they own tens of millions of dollars' worth of land.

How on earth can the government, let alone the Property Council, justify that bargain? How on earth can those nameless members of the Liberal party room suddenly fall into line on aggregation for that meagre further offering from the government when there are still more than $80 million of higher land taxes to be paid by those South Australian landowners now facing these changed aggregation arrangements for the first time? It is extraordinary. I have not heard anyone who can provide a credible answer as to why the Property Council and Daniel Gannon and Steve Maras have flipped on their position on aggregation.

Maybe they did more sums. Maybe they worked out that, for a select few Property Council members, the reductions to 2.4 per cent and 2 per cent actually meant that they were net beneficiaries of the bill: 'Hang the rest of the property industry, hang the rest of the real estate industry and hang the rest of the housing construction industry, I am alright, thanks, Jack, so stuff the rest of you.'

Maybe that was the calculation, or maybe for Daniel it was, 'Actually, I have to make peace with the Liberal Party. I want to get preselected at some stage, so I can't have this ongoing feud between the Premier of the day and the Treasurer of the day, and I had better make peace.' I hope that is not the case, but without sufficient justification that we have yet to hear from the Property Council, what else can you think? There can be no justification for this.

I have referred to this deal as the Property Council accepting 30 pieces of silver in response to their endorsement of the government's bill. I do not think that is pushing it too far. I think that is an apt and adequate explanation of the arrangement that the government and the Property Council have now entered into, completely undermining the last 139 or 140 days of the Property Council's positioning on this issue in regard to aggregation. At no stage did they say, 'If the government were to put a deal on the table which dropped the top rate, that would be alright for our membership, and we are happy to see aggregation waved through.'

They never said that—never. It was always about aggregation and it was always about aggregation in particular because of the context of the revaluations which are going on from the Valuer-General. The revaluations, bear in mind, will see an extraordinary increase in government revenue, the likes of which a high-taxing, high-debt, low-growth treasurer like Rob Lucas could only dream of: revaluations of commercial properties in the City of Unley of between 30 per cent and 110 per cent in one year.

People's land tax bills, people's council rates, people's sewerage rates, people's emergency services levy and people's NRM levies are all going up in one year. It will, from multiple directions, flood the government with additional revenue, and you can understand why landowners think that aggregation needs to be parked until the full impacts of the revaluations take effect.

It is not only extremely disappointing that that arrangement has been entered into between the Property Council and the government, but it has also been extremely disappointing that the government has chosen to position this change as some sort of a once in a generation reform, of doing the hard work of reform. The hard work on land tax was done years ago—years ago. Those opposite who do not remember the changes to land tax over the last 20 years would do well to remember the history of land tax policy in this state.

Over the last 20 years, it has only had one trajectory, and that is consistent land tax reforms to reduce the burden of land tax on South Australian landowners, consistent reforms in that direction. In one respect, it is correct that it is a once in a generation change because this is the first time in a generation that land taxes have been deliberately increased by a state government to garner more revenue.

Do you want to know, Deputy Speaker, the last time when tax policies were changed in the land tax regime to garner more revenue? It was under the former Liberal government. The land tax tax-free threshold used to be $90,000 a year, but under the former Liberal government it was dropped to $50,000 a year to garner more revenue from all the ownerships valued above $50,000. In that context, the state Liberal Party has form when it comes to land tax, when it comes to increasing land taxes to garner more revenue.

What has happened since then? At the election in 2002, when South Australians finally had enough of the internecine infighting within the South Australian branch of the Liberal Party, Labor formed government and undertook successive land tax change after land tax change after land tax change to massively alleviate the burden of land tax bills on South Australian landowners. I remember it quite well.

Mr Teague interjecting:

The Hon. S.C. MULLIGHAN: Under his breath, the member for Heysen said, 'You have forgotten about Kevin Foley.' No, I was just getting to him actually because he was the one who introduced what were actually the largest doses of land tax relief in South Australian history, not this pretender Premier; he is increasing land taxes in this tax measure. If you want to know what tax relief looks like, I will walk you through it.

I remember quite well that in 2005 we had had a period of about three or four years when property values in South Australia rapidly accelerated. For those of you who were paying attention to the property market not just here in South Australia but nationally, of course there was a huge housing boom in the Eastern States and that also spread over the border to places like South Australia, Tasmania and in particular Perth.

People who had houses which were previously worth tens of thousands of dollars suddenly found themselves with houses worth hundreds of thousands of dollars. People who had lived for a long time in suburbs like Prospect, Tranmere, Magill or Mile End, where they bought houses in the 1990s for tens of thousands of dollars, suddenly were seeing house sales on their street or the street over for hundreds of thousands of dollars. As a result, their property value has increased. For those who had rental properties, their land tax bill has massively increased from maybe $100 or $200 to $2,000. For people who had multiple properties, maybe it was up to $10,000 or more.

I remember the former member for state parliament and then federal parliament and then putative member for state parliament again, the Hon. Nick Xenophon, who whipped up and fomented so much dissent about this that there was a huge public meeting at the Norwood town hall. The then treasurer, Kevin Foley, attended that meeting two days after cabinet had approved and announced a $57 million a year reduction in land tax, an increase in the tax-free threshold to $100,000 and a significant restructuring and change of rates throughout the remaining thresholds of land tax. It was worth $57 million a year. Imagine how much that reform would be worth today. It would probably be worth 1½ times or even double that $57 million a year.

If my memory serves me correctly, that was in March or April of that year. I remember it being a warm night or maybe that was just the temperature of the room. But at the subsequent budget further reforms were made. Only a month or two later, the tax-free threshold was increased to $110,000, so it had more than doubled from the reduction that Rob Lucas had taken it down to. That served to provide relief for those people who had suffered land tax bills and increases in land tax bills of many thousands of dollars. It provided them with very significant relief for a number of years.

Further relief was introduced in the 2009 budget, which provided a further $157 million worth of land tax relief over three years. That was on top of the more than $50 million of relief that had been provided only a handful of years earlier. The tax-free threshold was increased from $110,000 to $300,000. Not only was it increased to $300,000 but a new provision was inserted into the Land Tax Act so that the Valuer-General's average valuations of land across the state each year would reflect itself in indexed land tax thresholds so that, if property values increased, there would be a much lower chance of bracket creep catching those properties as their values increased—a huge reform, over 10 years ago now, worth far more than what is being promised by the Liberal government.

There are also new exemptions for residential aged-care facilities. There are also exemptions introduced for people conducting a small business from home. I am sure many members opposite, as many do on our side, have people in their electorates who run small businesses from their homes, whether they are hairdressers, for example, or beauticians. Even some motor mechanics use part of their premises at home. A new sliding scale regime was introduced to ensure that those people would not be hit with a land tax bill by virtue of using their principal place of residence as a site for their business.

Further land tax exemptions were introduced to extend to a wider range of not-for-profit community associations so that they would not have to pay land tax. A rebate scheme was introduced for not-for-profit ethnic organisations. That was ultimately replaced with an exemption from land tax.

At many different times over the last generation, the former Labor government introduced very significant land tax relief. The reason why the tax-free threshold is estimated at $391,000 and not at the $50,000 mark that Rob Lucas left it at when he was last in government is because of Labor's reforms. Those land tax reductions are now worth in excess of $150 million a year. That is land tax reform. Trying to find more revenue from the land tax base by introducing aggregation measures to raise an extra $80 million is just a tax increase. That is just trying to raise revenue to fill a budget black hole.

Despite giving so much of it back at the top end, all those people who are affected, those thousands of South Australian landowners, know exactly what they are in for. They will face thousands of dollars in higher land tax bills—some will face tens of thousands of dollars in higher land tax bills—to pay for, for example, those 400 or so properties, taxable land ownerships valued above $5 million, many of which have the land tax bill sent to an interstate address.

South Australian landowners are paying thousands and thousands of dollars in higher land tax bills under the government's aggregation measure to provide a massive tax cut for the Westfields, the centre groups and those interstate property owners who own land here in South Australia. How is that fair? How is that equity? It is no wonder that those members of the Liberal party room who actually spent time to read the bill and talk to members of their electorates, their constituents, were raising concerns about this, saying, 'Mr Premier, Mr Treasurer, do you understand what the actual impact in the community will be?' The answer for both the Premier and the Treasurer is that of course they do not understand what the impact in the community will be.

They have not consulted the community. They have not fronted a land tax forum. They have not spoken to people face to face about what it is going to mean for their livelihoods. They have not spoken to a small business owner who will no longer be able to recruit new staff, or may even have to lay off staff, as a result of having a land tax bill tens of thousands of dollars higher. They have not had to front constituents of mine in Seaton, for example, first and second generation Italian migrants who came out to Australia in the 1950s or 1960s with nothing. They got jobs as labourers or shopkeepers, or even at Holden or Chrysler. Once they had saved enough money, they bought their own place for their families: for their wives and for their children.

Once they had saved even more money—there was no compulsory superannuation back then and they were not interested in what was a relatively fledgling share market in the 1960s and 1970s here in Australia—they invested in what they knew. They invested in property because, if they had a rental property to their name, when they retired, or if something happened to them or a family member, they had something they could fall back on. They had a rental income from the tenant or, if push came to shove, if worst came to worst, at least they had an asset that they could sell to provide some money for their family, which of course creates its own problems because, once that property is sold, there is no rental income stream.

That is the experience of hundreds of people in my electorate in Seaton, West Lakes, Grange, Royal Park and Semaphore Park. These are the people who have been writing letters, writing submissions and providing feedback on the government's land tax changes. From the bill and the amendments we have before us, it seems they have been completely ignored.

As I understand it, even those people who met with the Treasurer and vehemently disagreed with him after those meetings have said, 'At least he saw me.' But what they have been told is, 'Oh, well, if you don't like it, sell a property.' I think that is an extraordinary position to take. Let's assume that that is the solution for some of these people, that they are forced into selling a property. Do the government have any advice about what the capital gains tax liabilities are likely to be for some of these people who are forced into selling their properties?

Do the government have a view about whether somebody should pick up a portion of the equity they have in the land they own and pay that to the federal government in capital gains tax, whether that is good for them as an individual or whether it is good for that money to leave this state? I cannot imagine that it would be. It is another impact that if the government had fronted the community, if they had spoken to people directly about the real impact of these changes, they might have learned for themselves, but they did not do that.

When we were confronted with these changes—when we immediately saw, despite what was being dressed up, that this was a package of measures that took more than $80 million from one group of landowners and provided now three-quarters of that in tax cuts to the very top end of the land tax scales—we thought, 'We'll go out and talk to the community ourselves. We'll hear from them directly what their experience is.' Labor has held three forums. We held one in Campbelltown in the electorate of the member for Hartley, the Speaker, at the Marche Club.

The room was full that night. It was an agitated group of people who were petrified about losing their livelihood as a result of the impact of these tax changes. I do not pretend for a minute that there are not some people who, regardless of the aggregation change or the reduction in the top rates, can probably well afford these changes. As the Treasurer said, if somebody owns multiple properties—the figure changes; sometimes it is 10 properties, sometimes it is 12 properties and I think this morning it was 20 properties—and pays no land tax, how can that be justified?

Well, fine—release the modelling. How many people own 20 properties and pay no land tax? Maybe that is Harry Perks. Maybe that is why he is in favour of the cut in the top rate—because he knows that on a net benefit basis he is much better off. Maybe he can suffer the aggregation and receive the reduction in the top rate because he is a net beneficiary, but everyone who attended that meeting in Campbelltown at the Marche Club was furious.

People lined up at the microphone to tell their stories about their situation, what they were facing and the choices they were going to have to make about their landholdings. It was remarkable. For some people, it was very moving. The experience of my Italian constituents in Seaton was certainly reflected by some of the first generation Italian migrants who came to that meeting. They were devastated. They were devastated that they had worked hard all their lives. For 50 or 60 years they had saved and they had gone without.

I will always remember one gentleman standing up at the microphone who said, 'I have worked two jobs. I have worked every Saturday. I'm a tradesman. I never got to take my son to a soccer game because I worked, and with the proceeds of my work I bought a property so that I could rent it out. It was not just for that rental income: I could also leave it to him. That would be some justification for why I never got to watch him play a soccer game—because I had worked all my life to provide for him when he got to my age.'

Those are the stories that those opposite refuse to hear, that they do not want to hear and that they refuse to listen to. They are all written up as the obscenely wealthy top end of town. When it became clear that public sentiment was moving against the government on this land tax aggregation stuff, well, that is when the government's rhetoric took a really nasty, really sinister turn. That is when somebody in the government shopped a prominent Liberal Party supporter, donor and fundraiser to a national broadsheet newspaper, The Australian. The treatment at the hands of the state Liberal Party of Dr Timothy Goh is one of the worst abuses of government resources I think I have ever seen.

So desperate were the spin doctors in the Liberal Party to try to create the impression that it was only the top end of town that was complaining about these land tax changes that they sold out one of their own and tried to humiliate him on page 3 of The Australian newspaper. What a shocking miscalculation that was by the Liberal Party because not only was that person justifiably outraged that as a citizen a state government could target him and vilify him in that way but he was also grievously offended that the party that he had always supported since he was a teenager, the party that he had always believed in, that he had held fundraisers for, that he had donated to and that he had always voted for could throw him under the bus in such a public way—in a national broadsheet newspaper—so that the government could make its point a little bit better about its land tax changes. That is outrageous.

The only thing that matches it when it comes to being outrageous is that when the Premier was asked about it in question time he said, 'I don't know anything about it,' and when we asked him whether he would now make inquiries as to whether it was a member of his staff, he was completely disinterested. If I were the leader of a political party, if I were the Premier of the state and I suspected that a member of the Public Service—let alone a member of my personal staff—had behaved in such a way I would be outraged, absolutely outraged.

How can somebody treat another member of the South Australian community like that from a position of power, from a position of government? That was, I think, the tipping point in this debate. That dreadful, woeful political calculation of somebody in the Premier's office or in the state branch of the state Liberal Party to try to humiliate Dr Timothy Goh in a national broadsheet newspaper really got people angry. Whether you listened to the ABC or FIVEaa for the next two days, callers—landowners or otherwise—were absolutely furious that a state government could treat one of its citizens like that.

The amazing thing, though, is that it galvanised the sentiment at these public meetings—the number of people who presented to these public meetings came up to the leader, or came up to me, or came up to the member for West Torrens, or came up to one of the other Labor members who attended those forums and said, 'I just want you to know that I've always been a Liberal supporter,' or, 'I've always been a member of the Liberal Party, and after this I am done with the Liberals.' How can a political party treat one of its own like that, how can a government treat one of its citizens like that? These people deserve no support again.

There is no illusion here. There is no assumption on this side of the house that these people are suddenly going to flip and start voting '1' in the box next to a Labor candidate, but they are done supporting the Liberal Party. That part of their base that has always supported them through the 16 years of incompetence and opposition and finally got them there in 2018, to be thrown under the bus within 18 months, is it any surprise that those Liberal Party supporters are saying that they are done?

Yes, I understand that some Liberal Party members—those select few members of the Property Council—now believe they have reached a good agreement with the government, but not all the Property Council members do. Some, I have to say, have been ringing me, the member for West Torrens and the Leader of the Opposition saying, 'I can't believe my organisation has done this. I am embarrassed and outraged.' So not all members of the Property Council, but some, think it is a good idea.

I understand that it is Liberal Party first, policy and state second. I get that. They will not change, but nearly all of those other close to 1,000 people who presented to and attended the land tax forums convened by the opposition were self-avowed Liberal Party supporters—or, I should say now, former Liberal Party supporters. I think that is why, when the news came through on Friday, that at least one, if not two or more, members of the Liberal party room were going to reserve their right on this bill. They could see that this was not good policy. This was not good policy from a Liberal government.

If you find yourself in a situation where you need to balance the books, you do not do what the Premier and Rob Lucas have done at every juncture over the course of the last year and immediately run to the public for more revenue to dial up their taxes, to increase fees and charges, to implement an $80 million a year land tax aggregation charge. That is why these people feel let down. Rather than just dwelling on the fact that Steven Marshall and Rob Lucas have trashed the Liberal Party's support base, it is also worth hearing the stories shared by people at those forums about their personal circumstances. These people have been impacted by these land tax changes.

It is not just landowners who have approached the opposition with concerns about these changes. We have heard from mortgage brokers, rental property managers, the Real Estate Institute of South Australia and from real estate agents. We have heard from accountants, tax lawyers and the full gamut of professionals who know far better than most of us how the property market works in South Australia. These are not made-up examples: these are real examples of real people who are facing this aggregation measure.

A couple own three investment properties in Davoren Park, Elizabeth North and Albert Park. They are retired. They are not eligible for the pension because of the properties they own. They have no shares and no superannuation. Their rental income is $40,000 a year, or thereabouts, and their other annual property expenses total nearly $15,000, including their current land tax obligation of just over $800. Following the aggregation measure, their land tax bill will increase to $4,720. When your annual income is $25,000, which is less than the pension for a couple, that is a big sting. That is a really big sting. This couple is relatively young, in that they are only in their 70s. They have children and grandchildren, and they are now facing a $4,000 hit to their net disposable income.

Another family—again, a retired couple—has a property portfolio to provide for their retirement and they receive a yearly rental income of $72,000 from five investment properties. I am the first to admit that that is towards the top end, until you understand where those properties are: Osborne, Salisbury North, Davoren Park and Torrensville. From that yearly rental income of $72,000, their other annual property expenses are around $25,000. That leaves them just under $50,000 to live off from their properties. Their current land tax bill is nearly $3,200. That is now destined to increase to $24,000 or, to be fair on the government, with the further changes now proposed via the amendments that the Deputy Premier has filed, not $24,000 but $23,000.

That is a massive impact. I understand why those Liberal Party spin doctors worked as hard as they possibly could to try to paint those self-funded retirees with no other assets and no other access to income as the very top end of town, but they are not. These are people who have worked hard all their lives. These are people who did not have access to compulsory superannuation when they were building their retirement income assets in the 1960s, 1970s and 1980s and these are the majority of people who will suffer the most from these aggregation changes.

It is not just those self-funded retirees; there are some other more extraordinary impacts, which I must admit on face value had not occurred to me, let alone obviously to the government. We had the operator of a number of childcare centres saying, 'I had arranged my business so I can afford to operate childcare centres in South Australia. If these changes go through, I will either have to dispose of them,' not easy in an overpopulated, oversaturated childcare market, 'or I will have to increase childcare fees'. Childcare expenses are expensive enough.

An honourable member interjecting:

The Hon. S.C. MULLIGHAN: There is a vacant seat next to the member for Heysen if the member would like to carry on with their comedy routine.

The Hon. V.A. CHAPMAN: Point of order: I would ask that the member for Lee resume his contribution to the house and not start a fight across the chamber.

The DEPUTY SPEAKER: Yes, we are all paying attention, member for Lee. I would remind members, and it is probably a timely reminder, that they are to keep discussions to a minimum during the contributions of other members. Member for Lee.

The Hon. S.C. MULLIGHAN: Thank you, Deputy Speaker. I do not mind people having conversations in the chamber, but when they are doing it audibly with their back turned to the speaker it is unparliamentary. That is the only point I make.

The DEPUTY SPEAKER: I was not aware of that, member for Lee. I was paying attention to you, so please continue.

The Hon. S.C. MULLIGHAN: Thank you. That makes one of you, Deputy Speaker. Thank you very much.

Mr Teague interjecting:

The Hon. S.C. MULLIGHAN: Apparently the member for Heysen speaks. It is news for all of us. There was Rob, who owns two GP medical centres that he has developed and now his GPs in these medical centres are talking amongst themselves about whether they have to end their practice of bulk billing. That is an extraordinary outcome. Those GP centres, of course, are located in the north-eastern suburbs, as it happens, in the electorates of the member for Morialta and the member for Hartley.

These are the sorts of impacts which, if the government had deigned to listen to the results of feedback provided to them in the four weeks, they might have realised would come if these aggregation changes went through. But, of course, those impacts on the community have not been considered by the government.

At Lockleys, there was Eddie, the owner of three properties and, as a result, not entitled to the pension. He has a modest annual income and a lot of it will be removed through the application of this aggregation measure. He has had the wherewithal to go and speak to his accountant, who advised him, given the uncertainty, that perhaps the best thing he could do is sell everything and start over. Eddie is one of those post-Second World War, first generation European migrants forced into this situation by the Liberals.

There was Graham, who told the Lockleys community forum, 'If the Liberals had declared this at the last election, Labor would be in government. The Liberal's dishonesty got them into power.' They were not my words; they were Graham's words at the Lockleys forum. He now faces paying half of his $35,000 in net rental income in land tax, again, being left without a livelihood should these changes go through. There was Will, who also told the Lockleys land tax forum, 'The government blatantly lied to us. They told us at the last state election that they would cut land tax, yet here they are, 18 months on, massively increasing it.'

There was Sam—not the member for Waite, clearly—who said, in regard to the government's arguments that these land tax changes would make us competitive with interstate property investment markets, that in Melbourne $1.5 million worth of taxable land is taxed at $12,000 and in Adelaide it will be $25,000 under the proposed trust changes. He also told the meeting that he is aware of one developer who had received council approval but that the development approval for a development of 16 dwellings, which would have supported 10 different trades and 180 different tradespeople over the construction period, has now been cancelled.

That is the message that has come through from other industry groups, those that knew what was actually going on here and did not settle for the 30 pieces of silver like the Property Council did. If you cast your mind back over the last 10 years, 75 per cent of new dwellings that have been constructed in metropolitan Adelaide have occurred as a result of infill development—not greenfield development but infill development. These are the small-time personal property developers by and large; for example, someone who buys a block of 700 square metres or 1,000 square metres in Campbelltown or Seaton and subdivides it and puts two dwellings on the land.

This is the bulk of the new housing construction industry in Adelaide as we have known it for the last 10 years, and these are the projects that are being cancelled. As I said in my earlier remarks, I appreciate that the government has tried to make life a little bit easier for those greenfield developers who had established property trusts, for them to escape the worst ravages of this aggregation measure, but it does not help the majority of the industry. It does not help those people Sam was telling us about at the Lockleys forum.

We had Tom, the son of a very well-known and well-loved butcher in the western suburbs. His father had invested in a property not just to run his business from but to ultimately pass it on to his sons, in addition to one other rental property in his family. He now faces the prospect of having to make a decision about whether that property can be retained by the family and the net rental income with it.

At that same meeting, Tony echoed Graham's concerns that the Liberals are just dishonest. He said, 'This is not what they said at the last election. They said they would cut land tax and now they have changed it.' He is facing a land tax bill that will go up from $8,000 to $20,000, or perhaps, with these changes, to $19,000—pretty cold comfort given the impact it will have on his livelihood. We had Laz, a property adviser with his own practice in Henley, who said that if people take the decision, under these aggregation changes, to sell properties, we know that thousands of individuals will be impacted by aggregation.

Amongst those people there are many more thousands of properties that are owned. If huge numbers of people sell, what happens to bank valuations on everybody else's residential property? What happens to loan value ratios? What happens to people's capacity to make loan repayments if they have geared their properties?

Regina Twiss, who is one partner of the North Adelaide Heritage Society, faces paying $60,000 a year in land tax merely because she and her husband have worked very hard to build themselves a property portfolio very particularly dedicated towards the preservation of significant heritage properties in North Adelaide. Anyone who has gone to Tynte Street, either to Amarin Thai (I think it has moved now) or to Perryman's Bakery, would be familiar with the old fire station there, which has been turned into short-term accommodation. That is one of their properties, and that is the sort of effort that they have gone to. There is a heritage impact here that also has not been contemplated by the government.

At the forum at Goodwood, we again heard stories of people's retirement income being smashed by a land tax increase from $4,500 to $23,000. One landowner said, 'I've got no choice. I either sell the property or I pass on the costs in higher rent. I calculate the increase in weekly rent to my tenants, if I try to pass it on, to be $80 a week.' We had a self-employed business owner suffering an extra $15,000 a year from these aggregation changes. He was petrified that he would have to sell, likely at a loss, given the current environment. Ray said that his land tax bill now looked like it was going to go up by $60,000. In the last five years, he had already spent $300,000 on stamp duty in establishing his property portfolio.

These are certainly not all the stories that the opposition heard presented in those land tax forums. We had retirees at their wit's end, genuinely panicked and terrified of the impact of these aggregation changes. We had young people—and when I say 'young people', I am referring to people even younger than me—in tears at the prospect of losing everything that they had worked for. They were not just concerned about the dishonesty of the Liberal government in promising to cut land taxes but now actually increasing them; it was the retrospective application of these arrangements to the investment portfolios providing for their retirement incomes that also enraged them.

Remember, as I said, that the vast majority of the nearly 1,000 people who attended these three forums declared that they were, or had been up until now, Liberal Party supporters. Unsolicited by the Leader of the Opposition or me, people were standing up at the microphone and saying, 'Didn't we just see this in May at the federal election? Didn't we just see a prospective government trying to take a new tax to the election that would impact on people's retirement incomes?'

People had amassed shares and were receiving the benefit of tax credits on their dividends from those shares, and that was proposed to be wiped out by Chris Bowen. Did the community not send the message clearly enough about these sorts of changes from government? Most people said, 'Yes, that's right, but at least Bill Shorten and Chris Bowen took it to an election.' At least they took it to an election. This government did not take it to an election. In fact, they promised the opposite at the election: they promised land tax cuts, not this land tax increase.

I mentioned earlier that the government had a number of choices in trying to fill this budget black hole. I found it extraordinary. Perhaps this shines a great light on the mentality of the Treasurer. I remember at the 2006 election he promised that the would sack 4,000 public servants if the Liberals were elected. He was roundly criticised by public sector unions, by the Public Service Association, by the teachers, by the nurses and by all those allied health professionals who support our doctors and nurses. The Liberal government copped an absolute hiding over that policy.

Even today it seems that the Treasurer has an instinctive reaction to need to try not just to balance the budget but to do so by taxing South Australians more, rather than cutting the cloth of government. That was another point raised at these forums: 'I thought these people were Liberals, and as Liberal supporters we would have thought this wouldn't be the first port of call of the government—$500 million in higher taxes, fees and charges and then on top of that this new egregious land tax aggregation measure.' And they call Labor the party of high taxes.

At every single juncture, this year this government has imposed higher taxes on the public of South Australia. They have completely undone the benefits that households would have received from the emergency services levy, and they are now on track to completely undo the benefits to the business community of payroll tax reductions and the legislated changes to land tax. Sitting behind all this, as I mentioned earlier, is the threat of the revaluations. We still do not see the government being honest with South Australians about the outcome of this revaluation process.

For a while the Treasurer tried to argue, 'Oh, look, this started under Labor, and the former Labor government was expecting an extra $19 million in land tax revenue, so they were in it just as bad as us.' Well, I asked the Treasurer where that $19 million could be substantiated, and he said, 'Oh, it was across the forward estimates, and it was held in a contingency.' A revenue contingency—will wonders ever cease? There is no revenue contingency in the budget. There never has been and there currently is not. It is just made up by the Treasurer.

But what is not made up is the deluge of revenue that people are now going to pay to the government in higher state taxes as a result of these revaluation changes. The plea from landowners was, 'If this aggregation measure is to be introduced, the very least the government could do is hold off on implementing it until the Valuer-General's revaluation process has been completed and we understand the impact on people's valuations and we also understand the impact on the government's revenues and how much more revenue they stand to gain from these changes in property value.'

But the Premier, the Treasurer and those opposite want their cake and they want to eat it, too, because not only do they want to increase land tax through this new aggregation measure but, once they start generating a lot more land tax from the existing land tax base, they then also want to see massive increases in people's property values. For the last few years, as I said, because of Labor's change to the Land Tax Act when we were in government, there has been an adjustment to the thresholds of the land tax regime.

It is done based on the Valuer-General's statewide average in land values each year. That has usually been 2½ per cent, 2 per cent, 3 per cent or 4 per cent. This year it is 6 per cent, perhaps a harbinger of what is to come from revaluations. That is based on only three councils having their property values changed: Adelaide Plains, the constitutional monarchy of Walkerville and the City of Unley. The next one that is about to come is of course the City of Adelaide. That is where the—

The Hon. S.K. Knoll: No shame—none.

The Hon. S.C. MULLIGHAN: The member for Schubert has a contribution, I understand.

The DEPUTY SPEAKER: He does not have a contribution. He is interjecting and he is out of order to do that. Member for Lee, please continue.

The Hon. S.C. MULLIGHAN: Thank you for your protection—and a minister of the Crown nonetheless. Shame, shame, shame! Once these valuations are conducted in three of the 68 councils across South Australia, you can imagine what is coming forward, and we are already seeing the average land value increase, arrived at by the Valuer-General, by which land tax thresholds have been indexed to 6 per cent. That 6 per cent is no comfort to that business in the City of Unley that has had a revaluation of over 100 per cent. The land tax thresholds are not going to keep up with that property.

The bracket creep that will impact that particular landowner will be grievous and significant. Once the valuation changes started in the City of Adelaide where, thanks to the member for West Torrens' stamp duty reforms to abolish stamp duty on commercial property transactions—and I note for a period of time after the controllers of SA Liberal media on level 15 in the State Administration Centre finished trying to dirty up Dr Timothy Goh—they started changing their attention to claim credit for the introduction of those commercial stamp duty reforms.

Fortunately, not only are they not targeting citizens of the state to try to humiliate them on national broadsheet newspapers anymore but they have also stopped trying to claim responsibility for the single largest tax cut in recent history: more than $300 million a year in stamp duty forgone. All of that has seen tremendous investments in the CBD. We have seen not only new office buildings being built—for example, the new development at the GPO, which the Deputy Premier was complaining about and criticising in 2017 before the fabric swatches came with her incoming government briefs in 2018 ready for her to move into that said building—but we have also seen the Black Stump and 45 Pirie Street sold. There is tremendous investment in commercial property in the CBD.

It seems like the Valuer-General is taking the view that a rising tide lifts all boats, that if huge increases in property prices are being achieved for the sale of these individual commercial buildings that will then flow on to the surrounding commercial buildings. This is notwithstanding the fact that they may not have been on the market, they may not have changed tenant, they may not have had an external refurbishment or an internal refurbishment. They are all likely now to have a significant increase in their valuations, which means that their land tax bills will increase as a matter of course, well aside from the aggregation measure, but they will face that. That will mean that there will be a spillover effect into broader property revaluations.

In that context, it is not unreasonable for those other landowners to think, 'Well, if we're all going to face this across the other 65 council areas, after the City of Unley, the Adelaide Plains and the constitutional monarchy of Walkerville, then it makes sense for us to park this land tax aggregation measure until we get this out of the way.' If it is not parked until the revaluation measure is out of the way and people can better assess the impacts of it, then, at the very least, provide some sort of period of time where people can transition to these new aggregation arrangements.

Six months is not sufficient for pretty much any landowner staring down the barrel of a massive land tax increase as a result of aggregation. That means they have to make a choice: they have to grin and bear it and suffer the impacts to their livelihoods, whatever they might be—self-funded retiree, small business owner, small-time property developer, large-time property developer or property investor. They can grin and bear it. They can choose to sell a property and most likely, depending on their circumstances, face a significant capital gains tax bill, or they can increase rents to their tenants.

One-third of households in South Australia are rental properties—300,000 of the near 900,000 households here in South Australia are rental properties. If they are rented, that means somebody else owns them and is charging them rent. That person is likely to face not only a land tax bill under the current arrangements but at least a changed and most likely higher land tax bill under the provisions of this bill. Up to 300,000 households will either have their landlord sell the property out from under them—no nice feeling of certainty for that tenant, hoping that perhaps they can hang on to their tenancy and they do not have a landlord who makes life difficult for them—or they have an increase in their rent payments, which many cannot stomach.

I had one person who came and met with me who said, 'I make no bones about it: I own residential investment properties. The part of the market I have participated in for the last 10 or 15 years is I have bought former Housing Trust properties in the Riverland, usually for well under $100,000 each. I have people who are very much at the low end of the income scale, usually on pensions, disability support pensions or other forms of government assistance, to help them keep the lights on and maintain their livelihoods.' He said, 'Given how little I have paid for these properties and how relatively little they are valued at, I am absolutely fine with charging them the bare minimum in rent.'

People's rents for these properties are in the $120, $150 or $170 a week range. This is not the average rent, as it is in Adelaide, of about $450 a week for a house, or the more than $300 a week for a unit; these people are paying $100 or $150-odd a week in rent. That means that they have some disposable income after they receive their pension and they have paid their rent. That means they can pay their electricity bill or their gas bill. That means they can put food on the table and maybe even go out and participate in a social or sporting group in their local community.

He said, 'Not only have I tried to do the right thing by myself and build up an asset base where I can provide myself an income in retirement, but I have also tried to do it in a way where I genuinely feel like I'm helping people in the community who otherwise wouldn't be able to put a roof over their heads. Now, through these changes, I am not going to be able to do that. Now I have to either sell those properties or go and front up to some of these people who have an income of $200 or $300 a week, of which already half of that is already going to me, and ask them for more money.' He said, 'I just can't do it. I just can't do it to them, because what else are they going to do? Where else are they going to go?'

There are no other Housing Trust properties available that they can then fall back on in the public housing system in that area, so what do they then do? Do they have to move to somewhere where there is what they understand to be vacant Housing Trust properties? Do they join the waiting list? Do they become homeless as a result?' These are all the different experiences of people who are likely to be hit by this.

To give the government the benefit of the doubt, I think when they first set out on this measure, they would not have intended that those people be hit like that. I do not think they would have realised that people were in those situations and were facing those choices and might need to put other members of the community through those straits, but that is the benefit of talking to the community and understanding people's situations.

I come back to the point of the blasé characterisation by this government, that this is a measure just targeting the top end of town, that these are the people who only drive expensive European cars, who inexplicably were reported as buying them from Chateau Moteur. I was waiting for the follow-up article where the next person would have bought their car from Bob Moran Cars. It is just extraordinary that the Liberal government would be ignoring the full breadth of experience across the community regarding these changes.

I genuinely think that that is why there is still a group of people in the Liberal party room who are uncomfortable with this. I genuinely think that some of those opposite—not all of them and certainly not at least half or the majority, but a small number of people—know that this is not the right thing for a government to do, and it is certainly not the right thing for a Liberal government to do. It is manifestly unfair not only for that Riverland landlord and places other people in dire straits but for those self-funded retirees, for those people who have worked all their lives, who have paid their taxes, who have paid stamp duty in buying these properties.

Many people bought these properties for a few thousand pounds, let alone a few thousand dollars or maybe $20,000 or $30,000 in decades gone past. They have always tried to do the right thing. They had heard the message from federal governments from the late 1970s onwards that they do not want more Australians being a burden on the welfare system, that people should find ways of managing their own retirements without being a burden on the taxpayer, and so they have done that. They are now being told that that is not good enough, that they have to pay more tax. It is just extraordinary.

We cannot support this bill. I stood in front of the hundreds of people at each of those forums and heard those real experiences of real South Australians who have done the right thing all their lives, who have tried to make sure that they can rely on themselves, who have tried to make sure that they minimise any burden they might place on other taxpayers, who have tried to make sure that they can set an example for the rest of their family and their children—that if you work hard, if you make good choices, if you make sacrifices, then not only can you provide for yourself but you can also ensure that you are alleviating the burden on other taxpayers.

Those people now are saying, 'What was it all for? Why should I have gone to all of this work?' Why should that father who spoke to us at Campbelltown have missed a decade of watching his son play soccer on Saturday because he was working as a tradesperson so he could make sure that his family was well provided for?

I urge those opposite, those people who perhaps did not attend the Liberal party room meeting, who were not there to be cowed back into submission by those who are more interested in raising revenue than the real impacts on the community, to withdraw their right of either abstaining or opposing this bill and to think very carefully about what impacts they are having on the community.

What the Premier, the Treasurer, the Liberal Party and the government spin doctors have told you is wrong. This is not a tax cut: this is a tax increase. This is a tax increase to be paid for by thousands of South Australian small businesses, by thousands of South Australian self-funded retirees and by thousands of South Australian families. Three-quarters of that benefit, $60 million in tax cuts, is now being handed to the minority of landowners at the very top end of the scale.

There are interstate property investors—people who are not even South Australians—who own significant portfolios of land in this state who will receive a tax cut of hundreds of thousands of dollars a year from this land tax proposal, and it will be paid for by those people who turned out to the meeting at the Marche Club, it will be paid for by the people who turned out to the Lockleys Bowling Club and it will be paid for by the people who turned out to the Goodwood Community Centre. How is that fair? How is that equitable?

The Hon. A. Koutsantonis: It's not.

The Hon. S.C. MULLIGHAN: As the member for West Torrens says, it's not. It is not fair and it is not equitable: it is grossly unfair. For the Premier and the Treasurer and those opposite to package this up as something different is deliberately misleading and deceptive.

Those people who see themselves as the putative treasurer on that side, the member for Schubert included, who thumps his chest about the benefits of these reforms, should be warned about the impacts on the South Australian community. Given that we now know from the Premier's admission in question time that dear old Rob is not going to see the term out in the Treasurer's seat, the member for Schubert may well be the one in the Treasurer's chair in the lead-up to the next election when, if this bill goes through, the second round of massively higher land tax bills goes out to all those people.

All those constituents in the electorates of Morialta, Hartley, Dunstan, Adelaide, Colton, Morphett and Elder are the people who are going to face land tax bills many thousands of dollars higher. Why? So that those people, those wealthy property investors with millions and millions of dollars worth of land, can have a tax cut in the tens or hundreds of thousands of dollars. We should not be surprised by that, should we? This is true to form—large 'l' Liberalism in this day and age, is it not?

It is the belief in trickle-down economics that if you give the very top end of town a big enough tax cut they will take care of the economy. They can be believed to create the jobs, to invest in labour and to invest in capital to grow the economy. That is just not true. We have had the big experiment with that over the last 10 to 15 years. The experience since 2008 has been unequivocal: all the largesse that has been provided to the people at the top end, whether at the federal level or at other levels around the country, has massively increased profits of companies, and for the last 10 years, wages have stagnated, both across Australia and South Australia.

Providing those sorts of people with additional relief does not lead to any economic benefit at all. As we have already seen, the people who build the majority of new houses in South Australia are small-time property investors. They are not large property investors. Certainly, they develop a lot of properties but nowhere near as much as the infill urban development that has been conducted in Adelaide over the last 10 years, and that is what is now at risk.

It is no coincidence that there has been no endorsement of this latest package from Business SA. There is still criticism of this from the Master Builders Association, the Urban Development Institute of Australia and the Motor Trade Association. The assertion in the paper today, that the government have brokered an agreement, with industry is wrong. They have brokered an agreement with one small unrepresentative part of industry, and the remainder of industry—the vast majority of industry—does not support these changes.

The community does not support these changes, landowners do not support these changes and industry does not support these changes. Other than the Property Council, Daniel Gannon, Steve Maras, the Liberal party room and Harry Perks, who does support these changes? If it is just them, why on earth would they be ushering this through? Is threatening thousands of South Australians' livelihoods honestly the best way that those opposite can come up with to find an extra $20 million for their budget?

I cannot believe that in all the years I have been either watching or participating in parliament we now have a Liberal government, which has waited out the long 16 years in the wilderness of opposition, using their first term to massively increase land taxes—$80 million on a few thousand landowners—to pay for tax cuts at the top end. It is just extraordinary. This is not reform. This is just a punishing tax hike dressed up as reform by the Premier and the Treasurer.

I understand that we may well get the opportunity tonight to vote on the bill. The opportunity is not yet lost for those members opposite who have made it clear to their own colleagues that they remain uncomfortable with these land tax changes because they know it is bad for the community, they know it is bad for industry, they know it is bad for landowners and they know it is bad for the economy. They still have the opportunity to do the right thing and vote against this legislation. It will be interesting to see if any of them do and, if any of them do, which ones do.

We know that the member for Waite was the Jerry Maguire of the land tax debate: Rob had him at hello. He settled early: 'What's that? This is more than sufficient. I'm in.' Little did he know that there was room to go. Do not take him to a house auction, Mr Acting Speaker. With that, I conclude my brief contribution.