Bills

Land Tax (Miscellaneous) Amendment Bill

Committee Stage

In committee (resumed on motion).

Clause 1.

The CHAIR: There is a point of order.

The Hon. A. KOUTSANTONIS: I ask that the Attorney apologise immediately for her profanity.

The Hon. V.A. CHAPMAN: I withdraw the reference to the opposition as being idiots, 'look like idiots'.

The CHAIR: Attorney, we have not even begun the 30 minutes. I would ask you to withdraw and apologise.

The Hon. V.A. CHAPMAN: Thank you, and I have done so.

The CHAIR: She has withdrawn and apologised.

Members interjecting:

The CHAIR: Say the words, Attorney.

The Hon. V.A. CHAPMAN: I withdraw and apologise.

The CHAIR: Members, we have before us a time-limited debate. There are a couple of things I want to say before we begin, and the first is that we have an amendment to clause 1.

Ms Hildyard: Most of us aren't going to get to ask our questions.

The CHAIR: Member for Reynell, I am speaking.

Members interjecting:

The CHAIR: I haven't started the clock yet. I am just explaining where we are up to. We have an amendment to clause 1 before the Chair, which we will need to deal with first up. I am also going to make a short statement in relation to amendments Nos 1, 2 and 3 in the name of the member for Florey. I refer to the amendments put forward by the member for Florey to the Land Tax (Miscellaneous) Amendment Bill, schedule 108(2). There are three amendments made by the member.

Amendment No. 1 increases threshold D to $5 million. By increasing the threshold in the category the amendment, if agreed to, will effectively reduce the tax payable on the land in each category. As this amendment would effectively decrease the amount of tax taken by the government, I rule that it is within the standing orders and can be moved by a private member.

Ms Bedford: Really? I was told I had to withdraw it.

The CHAIR: Bear with me, member for Florey. Amendment No. 2 deals with funding of public and community housing. While it stipulates an amount to be applied to public and community housing, it does not increase taxation and therefore is in order to be moved by a private member. Amendment No. 3 seeks to increase the amount of tax taken for every $100 for various categories in the act. This is contrary to standing order 362, which states:

No amendment for the imposition, or for the direct or indirect increase, of a tax, rate, duty or impost may be proposed except by a Minister.

I therefore rule that the member for Florey's amendment No. 3 on the schedule is out of order.

Ms BEDFORD: Point of order: so I am not a minister and I am allowed to move amendments Nos 1 and 2; is that correct?

The CHAIR: You are allowed to move amendments Nos 1 and 2, yes, but not amendment No. 3. As further information for members, I have before me an amendment that has been tabled by the member for Enfield. Unfortunately, under standing order 114, we are not able to accept that amendment because it needed to be circulated to members at least one hour before the expiration of the allotted time.

The Hon. A. KOUTSANTONIS: Point of order: my understanding is that the table received that amendment before the ringing of the bells had concluded on the matter of the guillotine. Given that the guillotine had not yet been voted on by the house, surely you can seek advice about whether or not the guillotine was in place when the amendment was received.

The CHAIR: You have a point, member for West Torrens. Unfortunately, I am going to stay with standing order 114 and determine that it was not circulated within one hour.

Mr PICTON: Point of order: I am reading standing order 114(c), which, as you say, does make reference to amendments that have been tabled an hour before, but that is in relation to the expiration of the time under the guillotine. We are not at the point of the expiration of the time under the guillotine. There is still the potential that this amendment could be debated within the 30 minutes that has been allocated for the debate.

The CHAIR: That is right, member for Kaurna, but we are about to begin debate. We have 30 minutes, and it was tabled at 3.53pm today.

Mr PICTON: The clause says it is about the expiration of that time. We are not at that time. We have the ability to debate amendments in this time that has been allocated.

The CHAIR: No, but we will be.

Mr PICTON: That includes that amendment. There is nothing in the standing orders that limits amendments that have not been provided an hour before from being debated within the allocated time under the guillotine.

The CHAIR: My advice is they have to be tabled at least an hour before. We are going to start this debate. You have 30 minutes. There is an amendment to clause 1. The amendment has already been moved by the member for Light.

Ayes 22

Noes 24

Majority 2

Clause 2.

Mr MALINAUSKAS: Clause 2 of the bill principally deals with the commencement date, which I think is rather important. The reason why the commencement of this bill is important is that it occurs, under the proposition here, during the course of this term of government. Not once before the last state election, which was not 18 or 19 months ago, did we hear the now Premier, the member for Dunstan, ever communicate to the people of South Australia that he had a plan for a substantial retrospective land tax change that would see an aggregation measure introduced that would end up costing thousands upon thousands of South Australians and some small business owners an extraordinary amount of money.

We have heard repeatedly the calls of people who potentially will be subjected to an increase in their land tax in the order of 2,000 per cent—2,000 per cent—and the commencement of this bill occurs smack bang right during the middle of this term of government. Had the member for Dunstan or the Premier had the courage of their convictions, or had the courage of Prime Minister Howard or even former federal leader Bill Shorten, to take this proposition to the election, the date in this bill would be 1 July 2022. As you are well aware, the opposition has sought to amend the commencement of this bill to 1 July 2022 but has been denied the opportunity to produce that amendment.

This house has been denied the opportunity to vote on an amendment because the government is, yet again, guillotining the debate. Not only are we seeing the government guillotining the debate for the people who are the elected representatives of South Australians but we are seeing the government do that on a measure that would give South Australians the opportunity once and for all to determine whether or not a retrospective tax aggregation measure should apply to South Australians in such a punitive way. It is extraordinary.

If 92 per cent of South Australians are better off, if this is a brilliant policy of the member for Dunstan, of the Premier, if this is a lay-down misère, no-brainer piece of reform, why does he not take it to an election? He deprived the people of South Australia of that choice in March last year. Why not provide them with that choice in March 2022? Why not? It must be an absolute political ripsnorter: 92 per cent of people are better off apparently.

I might have a couple of reasons why not. Firstly, on 1 July next year, South Australians will start to become aware of the fact that that 92 per cent figure is a complete misrepresentation of the truth because on 1 July next year, the tax changes that are already l-a-w—law—particularly those people who are at the lower end of the land tax regime, will get the benefit and then the 92 per cent figure will come up a cropper.

The second reason why this government is denying debate on providing the people of South Australia with the opportunity to have a say on this measure is that they know the government will not hold. They cannot even get their numbers to stick in the course of this discussion, let alone all the way up to the next election.

Isn't the member for Bragg loving every moment of it? I have not seen the member for Bragg enjoy a debate quite like this one, and one wonders why. It is incredibly unfortunate that not only is this government depriving this parliament of an opportunity to debate an amendment but what they are really doing is depriving the people of South Australia a say on this bill. That is incredibly unfortunate. One would have expected the government to provide people with that choice. They denied it in March last year. They should not be denying it in March 2022, but the people of South Australia will not forget, particularly if this bill passes.

The Hon. V.A. Chapman: Do you have any questions?

Mr MALINAUSKAS: Absolutely I have a question for the member for Bragg: why you will not take it to an election?

The CHAIR: Does the Attorney wish to respond?

The Hon. V.A. CHAPMAN: I will take that as a comment or a rhetorical question. I am happy to answer any questions in relation to the commencement clause.

Mr MALINAUSKAS: I have a very clear and specific question for the Deputy Premier, for the Attorney-General. Why did the government not contemplate, during the course of the development of this bill, making the operative date the 1 July 2022?

The Hon. V.A. CHAPMAN: I do not understand the relevance of the question to the commencement date. Clearly, there are two aspects of the commencement clause. One is to make provision for the transitional provisions of the bill to commence on assent, and that will allow certain notifications to be given in the lead-up to the commencement of the amendments. Of course, if passed, the amendments to the Land Tax Act 1936 will commence on 30 June 2020, immediately after the commencement of amendments to the Land Tax Act that were contained in the Statutes Amendment and Repeal (Budget Measures) Act 2018. That is the proposition before the Chair, and I am happy to answer any questions in relation to that.

Clause passed.

Clauses 3 and 4 passed.

Clause 5.

The Hon. S.C. MULLIGHAN: I indicate that the opposition will be opposing this clause. This clause contains a large swathe of definitions, which will give the capacity for the Land Tax Act to give effect to the punitive increase in land taxes that the retrospective application of these new aggregation measures will enable, and so we will be opposing this clause.

Ayes 24

Noes 22

Majority 2

Clauses 6 to 11 passed.

Clause 12.

The CHAIR: Attorney, you have an amendment?

The Hon. V.A. CHAPMAN: I do, but, with respect, the member for Florey also has one to this clause. I will take your guidance as to whether she goes first, but I think she does.

The CHAIR: The member for Florey's amendment is consequential on yours being passed.

The Hon. V.A. CHAPMAN: I have only briefly looked at the member for Florey's amendment. It just refers to the same deletion of subclause (2) but with a deletion of the amount. I am in your hands, Chair.

The CHAIR: We might stop the clock.

The Hon. V.A. CHAPMAN: I am advised, Mr Chair, that the member for Florey's motion is really consequential on the one that she now cannot move. That is what I am advised.

Ms Bedford interjecting:

The Hon. V.A. CHAPMAN: Yes, absolutely. I am just indicating that is my understanding from the advice I have received that, whilst this is a lawful amendment, it is still an amendment that is consequential upon the delivery of amendment No. 3, which has been disallowed. I will leave it with the member for Florey to put that to you.

The CHAIR: We will start the clock. After some discussion, we will ask the Attorney-General to move her amendment .

The Hon. V.A. CHAPMAN: I move:

Amendment No 1 [DepPrem–1]—

Page 11, lines 26 to 27 [clause 12(2)]—Delete subclause (2) and substitute:

(2) Section 8A(2), table, rows relating to Threshold D and Threshold E—delete these rows and substitute:

(2a) Section 8A(3)—delete 'each of the thresholds' and substitute:

thresholds A, B and C

(2b) Section 8A—after subsection (3) insert:

(3a) Subject to this section, for each financial year after the 2020-21 financial year, threshold D will be adjusted in accordance with the following table:

(3b) Subject to this section, for the 2023-24 financial year and each subsequent financial year (year x), threshold D will be adjusted to take into account increases in the site value of land according to the following formula:

Threshold D_{year x} = $1,600,000 x Index Value_{year x}

where—

(2c) Section 8A(4)—delete 'subsections (2a) and (3)' and substitute:

subsections (2a), (3) and (3b)

(2d) Section 8A(5)—delete subsection (5) and substitute:

(5) If, after applying subsection (4) to determine the Index value for a particular financial year (year x) under subsection (3) or (3b), the result would be an Index value for year x that would be less than or equal to an Index value that has applied for—

(a) if the index value is determined under subsection (3)—the 2020-21 financial year or a subsequent financial year occurring before year x; or

(b) if the index value is determined under subsection (3b)—the 2022-23 financial year or a subsequent financial year occurring before year x,

the thresholds for year x will remain unchanged (so as to be equal to the year x-1 amounts).

The CHAIR: The member for Florey can move her amendment now.

Ms BEDFORD: I move:

Amendment No 1 [Bedford–1]—

Page 11, lines 26 and 27 [clause 12(2)]—Delete subclause (2) and substitute:

(2) Section 8A(2), table, rows relating to Threshold D and Threshold E—delete these rows and substitute:

I am happy to move the amendment standing in my name, which I think is very minor, in fact, and an enhancement of yours, Attorney, in line with the recommendations and representations received by SACOSS. I put it to the members of the house that this is an essential part of the social justice measures of this bill.

The Hon. V.A. CHAPMAN: I indicate that the government will not be accepting the amendment, as meritorious as it may be, but we will look at it between the houses.

The CHAIR: The question before the Chair is that the amendment by the Attorney-General being amended by the member for Florey be agreed to.

The Hon. V.A. CHAPMAN: Can I seek clarification here.

The CHAIR: I am going to stop the clock again.

The Hon. V.A. CHAPMAN: Thank you; I appreciate that. Can I clarify that what is being put is my amendment with the member for Florey's amendment. Do I have an opportunity to put my motion in the event that this fails? I ask, Mr Chair if I may, that that position not proceed and that you invite the member for Florey to put her amendment separately; if that fails, you proceed to mine, but I do not want mine to be put in with hers and lapse.

The CHAIR: The question is, as I indicated before, that the amendment of the member for Florey to the Attorney's amendment be agreed to.

Ms Bedford's amendment negatived.

The CHAIR: The question now is that the amendment standing in the name of the Attorney-General be agreed to.

The Hon. V.A. Chapman's amendment carried; clause as amended passed.

Clause 13.

The Hon. S.C. MULLIGHAN: I indicate that this clause, extensive as it is, also provides for much of the application of the retrospective regime and the opposition will be opposing it.

The committee divided on the clause:

Ayes 24

Noes 21

Majority 3

Clause thus passed.

Clauses 14 to 17 passed.

New clause 17A.

Ms BEDFORD: I move:

Amendment No 2 [Bedford–1]—

Page 29, after line 20—Insert:

17A—Public and community housing expenditure

(1) The Treasurer must ensure that, in each financial year, an amount that is not less than the prescribed portion of land tax levied under this Act during the financial year ending on the preceding 30 June is spent by the Government on public and community housing.

(2) For the purposes of subsection (1), the prescribed portion of land tax levied during a financial year is an amount of $40,000.000 multiplied by the index value for that financial year published by notice in the Gazette under section 8A(6).

(3) The Treasurer must, on or before 30 September in each year, lay before both Houses of Parliament a report providing details of Government expenditure on public and community housing during the financial year ending on the preceding 30 June.

(4) A report required under this section may be incorporated into any other report required to be laid before both Houses of Parliament by the Treasurer.

I recommend this amendment to the house, as part of the measures that have been referred to all of us through SACOSS as a way to ameliorate some of the impacts for people in the state in trying to access social housing. If this land tax bill goes ahead, there should be some ability to move some of that money to relieve that pressure.

The Hon. V.A. CHAPMAN: I indicate on behalf of the government that the proposed amendment is opposed, without in any way questioning the mover's motivation to assist those persons who seek to access public and community housing. Again, we will have further discussions on that matter between the houses.

Ms BEDFORD: I have a further question. I ask the Attorney: if there are any unintended consequences through the measures in this bill that do put pressure on rental accommodation, what remedy are you going to be able to assist these people with? We do not know yet what measures your bill is going to actually produce without seeing modelling, so we are a little unsure as to why this is opposed when it is a small measure.

The Hon. V.A. CHAPMAN: Mr Chairman, I am not entirely sure—

Members interjecting:

The CHAIR: Order! Member for Florey, you are—

Ms BEDFORD: Other people do not want to contribute or listen to the debate, but I actually asked the Attorney a question and it is very disrespectful. Mother is not happy.

The Hon. V.A. CHAPMAN: I am not sure how I get to answer questions in relation to this amendment because it is the member for Florey's amendment, but I think her general concern is how the government is going to address the support and funding of future community housing and public housing. Is that the gist of it?

Ms BEDFORD: We do not know what unintended consequences there are going to be from your bill. This is a measure that I am trying to put into the bill when none of us know what is going to happen anyway. I just want to know why this has to be discounted completely when there may be unintended consequences.

The Hon. V.A. CHAPMAN: Notwithstanding the genuine—

The CHAIR: Hang on. Everybody is talking at once.

Ms BEDFORD: I am asking the questions, in fairness.

The CHAIR: Yes, you have the call, member for Florey, if the Attorney can just wait until the member for Florey is finished, please.

Ms BEDFORD: That is correct. If we are not having any measures in this bill of this kind and if, as we know, there may be unintended consequences through this bill, I am merely asking whether there is any other measure anywhere to try to ameliorate the unintended consequences of the bill and the impacts on social housing.

The Hon. V.A. CHAPMAN: Again, I am not entirely sure how I can answer that in the context of this proposal. However, I think I hear the sentiment of the member. To be clear, the bill does not provide any hypothecated amounts for any dedicated purpose from any of the proceeds of any initiative in the bill, other than to identify that where there are proposed refunds or reductions in taxation liability for some taxpayers that that will be to their direct benefit. So if the member is asking whether there is any other part of the bill which incorporates a hypothecated amount of funds to be directed to some other place other than the Department of Treasury and Finance, the answer is no.

Ms BEDFORD: Just to be clear—and this is my final question—any revenue raised through this bill and any of its measures just go straight back to general revenue.

The Hon. V.A. CHAPMAN: I think I have made it clear. There are some measures in here which we have described as the 8 per cent who will have an increase in liability in relation to land tax. All land tax under the Land Tax Act—no, I will not go so far as to say the whole act because I do not have the whole act in front of me to refresh my memory on this.

I do not believe there is any hypothecated amount of moneys from the land tax revenue in South Australia which goes to a dedicated fund. I may be wrong on that but it is not part of this bill. Whilst this is a measure, as a package of reforms, some will have a higher land tax liability and many more under our proposal will have a reduced land tax liability. The net money of land tax goes into the Department of Treasury and Finance.

The CHAIR: The question before the Chair is that the amendment, which will become new clause 17A standing in the name of the member for Florey, be agreed to.

The committee divided on the new clause:

Ayes 3

Noes 43

Majority 40

New clause thus negatived.

Clause 18.

The Hon. V.A. CHAPMAN: I move:

Amendment No 2 [DepPrem–1]—

Page 29, line 23 to page 30, line 12 [clause 18, inserted Schedule 1]—Delete inserted Schedule 1 and substitute:

Schedule 1—Calculation of land tax (tables)

Note—

For Threshold values see section 8A.

Part 1—Interpretation

1—Interpretation

In this Schedule—

LT (TA) means the land tax payable with respect to land with a taxable value equal to Threshold A;

LT (TB) means the land tax payable with respect to land with a taxable value equal to Threshold B;

LT (TC) means the land tax payable with respect to land with a taxable value equal to Threshold C;

LT (TD) means the land tax payable with respect to land with a taxable value equal to Threshold D.

Part 2—Scales of land tax

2—2020-21 and subsequent years

Land tax for the 2020-21 financial year and for each subsequent financial year is calculated on the basis of the taxable value of the land in accordance with the following table:

Part 3—Scales of land tax for trusts

3—2020-21 and subsequent years

Land tax for the 2020-21 financial year and for each subsequent financial year is calculated on the basis of the taxable value of the land in accordance with the following table:

I have outlined the basis for this amendment in the reply. I commend the amendment to the committee.

The Hon. S.C. MULLIGHAN: This is the amendment that also includes page 3 of three of the amendments that the deputy filed; is that correct?

The CHAIR: Amendment No. 2 on schedule 1, member for Lee.

The Hon. S.C. MULLIGHAN: Yes, so part 3, page 3. Can the Deputy Premier advise the committee of the number of properties which the scales of land tax for trusts has been estimated to be affected by this measure by the Department of Treasury and Finance?

The Hon. V.A. CHAPMAN: The number of persons who hold a trust who are affected by this clause are yet to be identified, as a result of this proposal requiring that the trusts that have the benefit of it have to nominate a beneficiary for that; is that what you are asking?

The Hon. S.C. Mullighan: Properties not persons.

The Hon. V.A. CHAPMAN: No, I do not then, if that is specifically the question.

The Hon. S.C. MULLIGHAN: The Deputy Premier's advice is that there is no estimate of the number of properties. Can she advise how much revenue is estimated to be raised via the application of part 3, scales of land tax for trusts, contained within her amendment?

The Hon. V.A. CHAPMAN: I am just looking at page 20 of the PwC report, which is the land tax model methodology review report, and the surcharge on existing declared trusts, which is $10 million, and the assumption of surcharge for undeclared trusts below threshold is $7 million. The total is $17 million.

The Hon. S.C. MULLIGHAN: Notwithstanding PwC's analysis contained in their methodology review, can I ask whether the Deputy Premier could confirm that those estimates have been made by the Department of Treasury and Finance, based on the application of those scales and thresholds, without knowing how many properties will be affected?

The Hon. V.A. CHAPMAN: The amounts have been calculated as an estimate based on an estimate of the numbers. As I indicated earlier, until we know which of the trusts nominate their person for the benefit, we will not know the answer to that.

The Hon. A. KOUTSANTONIS: My question is: how many properties will be impacted by aggregation?

The Hon. V.A. CHAPMAN: I will take that on notice. Just so that I am clear about what we are taking on notice, the question is how many properties will be affected by the aggregation proposal, which in this case is to remove the exemption as such and make that apply to trusts or some trusts. In that regard, I will take that on notice.

Amendment carried; clause as amended passed.

New clause 19.

The Hon. V.A. CHAPMAN: I move:

Amendment No 3 [DepPrem–1]—

Page 30, after line 12—Insert:

19—Review

(1) The Treasurer must cause a review of the operation of the amendments to the Land Tax Act 1936 effected by this Act and by the Statutes Amendment and Repeal (Budget Measures) Act 2018 to be conducted by a person independent of the government.

(2) A report on the review conducted under this section must be prepared and submitted to the Treasurer on or before 31 December 2023.

(3) The Treasurer must cause a copy of the report submitted under subsection (2) to be laid before both Houses of Parliament within 6 sitting days after receiving the report.

This amendment provides for a review in five years by a person independent of the government, as outlined in proposed section 19(1), reporting to the Treasurer on or before 31 December 2023 and with an obligation for the Treasurer to cause a copy of the report to be submitted and laid before both houses of parliament within six days of receiving the report.

The CHAIR: The time for debate has expired.

New clause inserted.

Schedule and title passed.

Bill reported with amendments.

Third Reading

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (17:06): It is with pleasure that I move:

That this bill be now read a third time.

The DEPUTY SPEAKER: The member for Lee has the call, and the time limit on this part of the debate is five minutes.

The Hon. A. Koutsantonis: Five minutes?

The DEPUTY SPEAKER: Yes, five minutes.

The Hon. S.C. MULLIGHAN (Lee) (17:06): I think it is 20 under the standing orders, sir, for the third reading contribution. This has not been guillotined. It was only the committee stage which was guillotined.

The DEPUTY SPEAKER: No, it was also the time for the third reading. The member for Lee has the call.

The Hon. S.C. MULLIGHAN: Well, what a disgraceful abuse of power by this government—that this government would use their numbers to thwart the consideration of what they call the greatest reform of land tax in this state, a hard and difficult reform, they claim, yet they are not willing to have it scrutinised by this house. They are not willing to answer all those issues and concerns that the community has raised with us, that the government were too cowardly to go out and listen to themselves.

The opposition went out and did the hard work. We went and spoke to the people of South Australia about what their concerns were with this retrospective application of aggregation measures, and they came out in droves—nearly a thousand people in three meetings. We had letter and email and phone call and constituent meeting time and time again, with people in tears and people genuinely worried about the impact of these changes on their livelihoods. We had tax lawyers and we had accountants putting to us questions that they wanted some answers on that the government, when approached by them, had refused to answer. They had refused to answer them.

And here we are in the forum where the people of this state can be represented by members to have their queries attended to, and what does this government do? What does this government do? Try to rush this through the house to minimise the scrutiny. At no point in this debate have we had the government be able to inform South Australians how many pieces of land are going to be impacted by these changes. In fact, we just asked a couple of minutes ago, and they still do not know. They run around claiming how much revenue is going to be raised by these measures without even understanding how many landholdings are going to be affected.

Not only do they not know how many landholdings are going to be affected but they do not know how many ownerships of those landholdings are going to be affected either. They do not know who is impacted and they do not know by how much. When this side of the chamber, the opposition, who are actually willing to engage with people of South Australia on their behalf about this massive tax impost upon them, come to this place to raise legitimate questions on their behalf, the government shuts us down, despite of course the Premier giving this place a commitment that he would do no such thing—no such thing.

We had the remarkable—and in this session of parliament unprecedented—speedy consideration of the matter I raised previously about the Premier. Absolutely remarkable—remarkable—because it is also in that person's interest that this is rushed through, that these concerns of the people of South Australia are swept under the carpet and never addressed because they do not want to have face the reality of these changes. They do not want have to eyeball their constituents who are going to suffer increased bills of thousands of dollars or tens of thousands of dollars. They do not want to know.

They do not want to know what the impact will be on their own constituents and I say: shame on those opposite. Shame on those opposite for turning their backs on the people of South Australia. Shame on those opposite for turning their backs on those people who have done the right thing for their whole lives, who have worked hard and made sacrifices and invested in land to make sure they can provide for their retirements not expecting to be taxed by a Liberal Party after the fact unfairly.

The Liberal Party—this government—do not even have the courage to go and front that community, to go and front those landowners and be honest with them. They will not listen to their grievances and they will not answer their questions, and when we come into this place, the member for Morialta, the Deputy Premier, and even more so the Premier, move to shut down this debate. Shame on all of you. The people of South Australia will remember your betrayal.

The house divided on the third reading:

Ayes 24

Noes 21

Majority 3

Third reading thus carried; bill passed.