Bills

Land Tax (Miscellaneous) Amendment Bill

Final Stages

The Legislative Council agreed to the bill with the suggested amendments indicated by the following schedule, which suggested amendments the Legislative Council requests the House of Assembly to make to the said bill:

Schedule of the suggested amendments made by the Legislative Council

No. 1. New clause, page 7, after line 27—Insert:

6A—Amendment of section 4—Imposition of land tax

Section 4(1)—after paragraph (b) insert:

(ba) land that is subject to a heritage agreement under the Native Vegetation Act 1991 that is noted against the relevant instrument of title, or against the land, in accordance with section 23B(3) of that Act;

No. 2. Clause 12, page 10, line 35 [clause 12(1), inserted subsection (1)]—Delete 'for the 2020-21' and substitute:

clause 2 for the 2020-21 and 2021-22 financial years and in accordance with the table in Schedule 1 Part 2 clause 3 for the 2022-23

No. 3. Clause 12, page 11, line 3 [clause 12(1), inserted subsection (1a)]—Delete 'for the 2020-21' and substitute:

clause 4 for the 2020-21 and 2021-22 financial years and in accordance with the table in Schedule 1 Part 3 clause 5 for the 2022-23

No. 4. Clause 12, page 11, table after line 34 [clause 12(4), inserted subsection (3a), table]—Delete '$1,600,000' wherever occurring in the table and substitute in each case '$2,000,000'

No. 5. Clause 12, page 12, formula after line 4 [clause 12(4), inserted subsection (3b), formula]—Delete '$1,600,000' and substitute '$2,000,000'

No. 6. Clause 13, page 19, line 22 [clause 13, inserted section 13A(1)]—Delete '2020' and substitute '2021'

No. 7. Clause 13, page 28, line 25 [clause 13, inserted section 13J(5)]—Delete 'because of the operation of section 13G(5)'

No. 8. Clause 13, page 28, lines 31 to 34 [clause 13, inserted section 13J(6)(a)]—Delete paragraph (a) and substitute:

(a) that the land is being held for the purpose of being developed as a residential development of more than 10 allotments or lots; and

No. 9. Clause 18, page 31, lines 1 to 12 [clause 18, inserted Schedule 1, Parts 2 and 3]—Delete Parts 2 and 3 and substitute:

Part 2—Scales of land tax

2—2020-21 and 2021-22

Land tax for the 2020-21 financial year and the 2021-22 financial year is calculated on the basis of the taxable value of the land in accordance with the following table:

3—2022-23 and subsequent years

Land tax for the 2022-23 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

4—2020-21 and 2021-22 (trusts)

Land tax for the 2020-21 financial year and the 2021-22 financial year is calculated on the basis of the taxable value of the land in accordance with the following table:

5—2022-23 and subsequent years (trusts)

Land tax for the 2022-23 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:

Consideration in committee.

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

That the Legislative Council's suggested amendments be agreed to.

The Hon. S.C. MULLIGHAN: I indicate that the opposition will be voting not to accept these amendments. Indeed, in doing so we indicate once again our opposition to this bill. I understand that despite the government not yet moving its guillotine, its intention is to once again guillotine debate on this land tax bill.

We have been through this before, of course, when the opposition came to this place during the original second reading debate and committee stage of this bill. The Liberal Party of South Australia, the now government, shut down debate, and those South Australians who had approached members of the opposition and members of the crossbench with dozens and dozens and dozens of unanswered questions they had put to the Treasurer or to Treasury or to RevenueSA and had not yet got a satisfactory answer relied once more on the people's house, the parliament of this state, and the opposition to try to get them some answers.

It is not lost on anyone in this place that we are being asked to vote on amendments that we do not even have. Apparently 90 seconds ago they came into the chamber and now we are asked to make a decision on tens of millions of dollars more of taxpayers' expense.

Members interjecting:

The Hon. S.C. MULLIGHAN: Remarkably, we hear interjections from ministers who say that they are tax cuts without realising that they are further expenditures from the budget. Maybe the Premier is not the only one who misses important cabinet appointments when it comes to considering land tax.

This is the final act in what has been a high farce from this government, led ineptly and incapably by the Premier. How on earth could any competent government find itself in the position where at budget time they hand down a $40 million tax hike only then to revise it to a $118 million tax hike on thousands of South Australians who will face, in many cases, an abrupt impact to their livelihoods as a result? And what do they choose to do? Not use any of that additional revenue to try to smooth that passage on those people, but pick up the phone to talk to their close mates, their Liberal Party members who have infiltrated the Property Council of South Australia, and say, 'How much of this extra $78 million would you like in your back pocket?' to the people who own literally millions of dollars worth of land.

An elector who owns three investment properties, their only source of income in their retirement, and it has been more than 10 years since they stopped working, with their net income of barely $30,000 a year, sees a $7,000 increase in their land tax bill, whereas, a corporation that owns at least $5 million worth of property gets a $65,000 tax cut thanks to this government. Where is the equity in that? How is that fair?

Each time we have seen a change from this government, the state has been flat out lied to. The government says, 'Well, it's this or it's nothing. If this isn't accepted, we will take the tax reform off the table and we will go and do something else.' That is what we were told in September, 2½ months ago. As soon as the next capitulation came, that was the green light to everybody.

We have seen every industry group and every crossbench MP come at the government demanding further changes, and there has been capitulation after further capitulation after further capitulation. So now, rather than a $40 million tax increase, trying to bring more revenue into the budget, the government are coughing up something in the order of $30 million a year. They have gone from a $120 million over three-year budget benefit to a nearly $90 million over three-year cost. That is the most incompetent effort at tax reform I think this state has ever seen.

A fish, they say, rots from the head, and I am not surprised that the Premier, the member for Dunstan, is not willing to speak on this because he will do his best to shake responsibility for this absolute shambles.

The Hon. S.S. Marshall: Wind it up!

The Hon. S.C. MULLIGHAN: And now the Premier is telling me to wind it up. Yesterday, he was demanding I pay him more respect. The Rodney Dangerfield of the South Australian parliament 'can't get no respect'. Do you know why? Because respect has to be earnt. You have to have runs on the board. You have to have some successes and some accomplishments, none of which this Premier has, not in this term of government. It has been failure after failure after failure, a symphony of incompetence by the Premier—absolutely extraordinary.

At the end of this, what have we got? Thousands of South Australians paying thousands of dollars more a year in land tax so that when the Premier travels interstate he can tell those corporate and commercial landowners, who own millions of dollars of land here in South Australia but do not actually live in this state, that they have massive land tax cuts. Well done, Premier—well done!

Once again, the Premier shows his chops when it comes to selling out South Australians. If it is not land tax, it is water; if it is not water, it is submarines; if it is not submarines, it is our automotive manufacturing industry—dead silence every time he sells out this state, and he has done it again. Shame on the Liberal Party of this state for once again selling South Australians down the river, if you will pardon the pun, as apt as it is. It is absolutely extraordinary.

They all sit there in silence knowing that they have to put up with him. They have to wear what they have been asked to do to South Australians—absolutely outrageous. They should hang their heads in shame for doing this to South Australians. Thousands of people will face massively higher bills so that Westfield, Centa Group or Centro can have tens of thousands of dollars of tax cuts. All 400 of them who have more than $5 million worth of property, the 50 of them who do not even reside in South Australia, they are all getting tens of thousands of dollars of tax cuts. This is why they will not release the modelling: because they do not want their dirty little secret about their land tax reform to get out.

All those landowners who actually live in this state, who have actually worked hard for decades—who in many thousands of cases came to South Australia from Europe, who migrated to this place with nothing but the shirts on their backs, who worked seven days a week and more than 12 hours a day to put food on the table and to save up to buy a house and, once they had some more savings, try to provide for their own retirements—they are the people who are being left out in the cold by the Premier, the member for Dunstan, and all his colleagues so that they can show some further favour and make some further tax cuts for their corporate mates.

Well, shame on all of you. If that is not bad enough, we also know what is coming next, and that is the dead silence and the refusal to act from those opposite because they know that tens of millions of dollars extra per year are flooding into the budget from their revaluation process. These land tax bills not only will go up due to aggregation but they will go up, and up, and up.

I see the member for Unley has gone quiet because he knows that people are having their properties revalued in his electorate by up to 114 per cent. I tell you what: I would be staring at my phone if I were him as well. I would not want to engage. He knows the impact he is having on his constituents—absolutely outrageous. Shame on all of you. What a disgrace that you could do this to the people you are meant to represent. Shame on all of you.

Mr MALINAUSKAS: I rise to echo the remarks that I think were aptly put by the member for Lee. I think we have learned a lot throughout the course of this debate that has been consuming the entirety of the government's agenda and the state political process now for the better part of six months. At the heart of this exercise, I think it is important that the parliament reflects upon who is affected the most by this because this is not now just a political shemozzle.

This has not just been a disjointed piece of the legislative process that has now resulted in a bill the objects of which are fundamentally different from the first version that entered the parliament. What this is really about is people, real people who have gone out of their way over the last five months to express their very legitimate and grave concerns about the implications of this retrospective tax change on them. It is important in the lead-up to this vote that the house reflects on what those implications are for those real people as we cast our votes.

I would like to share with the parliament some real stories that we on this side of the chamber have heard firsthand—not through some farcical process of consultation where written submissions were ignored one after the other, not through some online survey, but through a traditional exercise of actually inviting people to come forward and have the courage of their convictions to express their views and convey to their political leaders, their representatives, what this means to them.

It was an incredibly telling exercise because we saw people coming along to these forums who have never done it before in their life—people who have come to this country with literally nothing at their disposal apart from their own hard work, people coming along sharing their stories about why they came to this country seeking nothing more than opportunity. They understood that Australia was a place where they would be able to come and work hard and then enjoy the benefit of that work. Those people, one after another, decided to come along and explain to us how this land tax change was going to fundamentally undermine their standard of living and that of their children and their children in a way that will never be able to be compensated for.

They were real people. I think of Helen, who came along to our forums that we held in Lockleys, a woman whose only crime, according to this government, is working hard, investing in land and then obeying the law of the land. The price that she is now paying as a result of the prospect of this law passing the parliament is having her retirement income decline in the order of 30 per cent to 40 per cent—and a modest retirement income it is.

These are people who have not had the benefit of ever having access to compulsory superannuation, people who do not have the luxury of owning shares, but instead have made a legitimate and lawful decision to invest in property through their hard-earned savings. Just at the point where they are reaching the opportunity to reap the benefit of that as they approach retirement, overnight none other than the Liberal Party of South Australia has decided to retrospectively change the law on them, move the goalposts on their retirement, and now their standard of living has been compromised. For the sake of what?

Is it for the sake of our budget now being in a position where we have more money to invest in schools and hospitals? No. Is it for the sake of reducing the dramatically increasing debt under this state government? No. The reason why those people are now paying an enormous sacrifice is so that the people who invest in huge portions of land, in excess of $5 million in the most part, are getting massive tax cuts.

I do not know if the Liberal Party in South Australia has been paying much attention to the global economy in the West over recent years, including in South Australia, but there is a challenge on our hands that policymakers around the world who have half a brain are trying to grapple with, and it is called income inequality. We now have an economy in most parts of the world that is not acting or not functioning in a way that is genuinely fair. We see working and middle-class people throughout the West, including in South Australia and Australia, continuously being left behind by bad public policy decisions, particularly when it comes to tax reform.

Now what we face is a piece of legislation that does not seek to ameliorate that problem but instead to exacerbate it in a way that we have not seen for generations. Working and middle-class people who have invested in land, approaching their retirement, are facing the prospect of the Liberal Party imposing upon them a retrospective tax hike in the order of up to 2,000 per cent so that people at the very top end of the land ownership scale get a massive tax cut. That is bad public policy that will exacerbate the problem of income inequality in this community, and it is a shame on the Liberal Party.

If there is one virtue in this exercise, it is that we now know what the Liberal Party in South Australia really stands for, because as sure as goodness it is not the middle class, and as sure as goodness it is not small business in this state. The other group of people who came out of the woodwork during the course of this exercise to start to engage in political advocacy, which they are not ordinarily accustomed to, was small business after small business.

I often reflect on the panelbeater who, again, started with absolutely nothing apart from his own father's hard graft. Over time, that family decided that once they started to accumulate a bit of wealth they would acquire the land on which the business operated. It helped protect the business. It helped de-risk the business from a landlord who would seek to jack up rents unreasonably, or indeed try to move their tenant on.

They acquired the land, which is exactly what we continuously tell people to do, making long-term investment decisions so they can employ people in this state. They then did a little better and acquired the next business and then that land, then the next business and that land, all because they wanted to do nothing more than provide an honest service to the community of this state and employ people in the process.

Now, as a consequence of making those investments, abiding by the law and following the advice of their accountant, they face the prospect of a massive retrospective tax increase. This of course does nothing apart from incapacitate them to continue to employ people—particularly young people—into the future. We heard these stories from panelbeaters, petrol station owners, bakers, GPs and physiotherapists.

We had one representation make it abundantly clear that this would actually compromise bulk billing rates in South Australia, particularly in outer metropolitan areas. GPs now face the prospect of massive increases in the rent they will have to pay their respective landlords. That will compromise their ability to continue to engage in bulk billing, and now people in outer metropolitan and regional communities face the prospect of losing a bulk billing service as a consequence of this land tax change.

Consequence after consequence, after consequence. Again, I come back to this point: for the sake of what? Nothing more than a face-saving exercise on behalf of a Premier who literally has no idea what he is doing. What we now see is the consequence of a party coming to government that had literally no agenda—a party that sought to promise everything to everyone in the lead-up to the election to finally break a cycle of losing four elections in a row.

They promised they were going to deliver more jobs. They failed. They promised they were going to deliver better services. What we have seen is cut after cut after cut. They promised they were going to deliver lower costs. This land tax hike on those middle-class families represents a very big cost indeed and they will now be opposed to them. They promised they did not have a privatisation agenda. That has turned out to be the single largest broken promise of all. Group after group after group. Promise after promise after promise—and breaking every single last one of them.

Right now, in this place, we are going to see the cherry on top at the end of the 2019 calendar year: the ultimate broken promise of all. This Premier said to the people of South Australia that he was going to take an axe to land tax. What we are seeing now is the exact opposite for those working and middle-class people and small businesses who face a tax increase in the order of in excess of 2,000 per cent.

We have done our level best to rail against these tax increases. Alas, it appears that our efforts have not succeeded because the government have the support of the Greens. I think it is incredibly telling that they are now relying on the support of none other than the Greens to get their tax changes through. There will be an opportunity for the people of this state to have their say. It might not be right now, but it will happen in March 2022—

The Hon. D.C. van Holst Pellekaan: Absolutely, correct.

Mr MALINAUSKAS: As the Minister for Energy and Mining interjects, I can say to him with a degree of confidence that if you faced a 2,000 per cent retrospective tax increase you would remember, too. We will continue to hold our consistent policy position, as we have throughout the entirety of this debate.

We are the only party that has had any consistency—unlike the Liberal Party and this Premier, who have chopped and changed all the way through, and unlike the Treasurer, who is taking his negotiation advice from the member for Black and capitulating every step of the way. We have remained consistent. We have remained true.

We are a party committed to making sure that hard work gets rewarded. We are a party committed to making sure that tax policy is founded on a principle that says that if you work hard and make the appropriate savings you should not be faced with retrospective tax hits. If you have the capacity to pay, you should acknowledge the fact that you should pay, but you should never face the prospect of a government exercising a policy of sovereign risk by retrospective changes. They know where we stand, they know where they stand and your time will come.

The Hon. J.A.W. GARDNER: I move:

That consideration in committee of the suggested amendments from the Legislative Council on the Land Tax (Miscellaneous) Amendment Bill be concluded by 6.30pm.

Motion carried.

The Hon. A. KOUTSANTONIS: In 1942, Robert Menzies gave a speech about his 'forgotten people'. I want to read to the parliament the speech that Robert Menzies made, which I think is pertinent to members here today. He said:

Quite recently, a bishop wrote a letter to a great daily newspaper. His theme was the importance of doing justice to the workers. His belief, apparently, was that the workers are those who work with their hands. He sought to divide the people of Australia into classes. He was obviously suffering from what has for years seemed to me to be our greatest political disease—the disease of thinking that the community is divided into the relatively rich and the relatively idle, and the laborious poor, and that every social and political controversy can be resolved into the question: What side are you on?

Now, the last thing that I would want to do is to commence or take part in a false war of this kind. In a country like Australia the class war must always be a false war. But if we are to talk of classes, then the time has come to say something of the forgotten class—the middle-class—those people who are constantly in danger of being ground between the upper and the nether millstones of the false war; the middle-class who, properly regarded, represent the backbone of this country.

We do not have classes here as in England, and therefore the terms do not mean the same; so I must define what I mean when I use the expression 'middle class'.

Let me first define it by exclusion. I exclude at one end of the scale the rich and powerful: those who control great funds and enterprises, and are as a rule able to protect themselves—though it must be said that in a political sense they have as a rule shown neither comprehension nor competence. But I exclude them because, in most material difficulties, the rich can look after themselves.

I exclude at the other end—

us—

…the mass of unskilled people, almost invariably well-organised, and with their wages and conditions safeguarded by popular law. What I am excluding them from is my definition of the middle class. We cannot exclude them from problems of social progress, for one of the prime objects of modern social and political policy is to give them a proper measure of security, and provide the conditions which will enable them to acquire skill and knowledge and individuality.

These exclusions being made, I include the intervening range—the kind of people—

Menzies claims he represents in parliament—

…salary-earners, shopkeepers, skilled artisans, professional men and women, farmers and so on. These are, in the political and economic sense, the middle class. They are for the most part unorganised and unselfconscious. They are envied by those whose benefits are largely obtained by taxing them. They are not rich enough to have individual power. They are taken for granted by each political party in turn. They are not sufficiently lacking in individualism to be organised for what in these days we call 'pressure politics'. And yet, as I have said, they are the backbone of the nation.

They are the people Menzies spoke about—the forgotten Australians—and this government is now introducing legislation that will hurt them and hurt them hard.

There are families today who, for the first time in their lives, are watching this broadcast live because they are the forgotten middle class. They are the ones who have traditionally always turned to members opposite. They have turned to them in the eastern suburbs, in the Adelaide Hills, in some of the inner suburbs. They are the artisans, the shopkeepers, the professionals, the farmers and so on. They are the ones Menzies described as unorganised yet not individualistic enough.

The Hon. S.K. Knoll: Farmers are exempt from land tax.

The Hon. A. KOUTSANTONIS: Yes, for now—for now.

Members interjecting:

The CHAIR: Order! Thank you. Two things—

An honourable member: Time is up?

The CHAIR: Not quite. The member for West Torrens will not respond to interjections and those members who are in their seats will not interject.

The Hon. A. KOUTSANTONIS: There is not a single forgotten Australian who would have thought in their wildest dreams that the Liberal Party would move this legislation. It is not beyond the realms of expectation that farmers who are watching this think that they are next because, if the Liberals would go after the middle class in the suburbs, why would they not go after farmers?

Importantly, those people Menzies spoke about traditionally looked to the member for Elder, the member for Colton, the member for Kavel, and the member for Heysen—those members who traditionally would have stood up and fought for them on these issues. But, unfortunately for them, for those forgotten South Australians, they are not standing up for them. They are standing up for the 400 corporations and individuals who are the major beneficiaries of this new measure, the ones who do not live in South Australia, the corporations, the Westfields—they are the ones that are the beneficiaries here, not the forgotten Australians.

Tonight, there are families who are watching or hearing about this who have never contacted political organisations, as the Leader of the Opposition said. They are the ones who, for the first time in their lives, have called Parliament House and asked to speak to the Hon. Mark Parnell, or the Treasurer, or the Hon. John Darley, or the member for Waite, who capitulated I think four versions ago.

The Hon. S.C. Mullighan: Early.

The Hon. A. KOUTSANTONIS: Early—who gave in early. There is only one member on that side who can hold their head up, and that is the member for Davenport. He is the only one who had the courage of his convictions not to be part of this train wreck, not to be part of this disaster.

For those families who are watching this, who are going to watch this, who are going to read about this tomorrow—what has the government done? They have increased their anxiety. They have increased their fears. They have made self-funded retirees feel anxious about their future. Governments are there to reassure, not to increase anxiety. The world is complicated enough without having the Premier and his cronies come along and retrospectively change tax rules on retired people.

I say to the member for Colton that he has a distinction in this house: he has, residing in his seat, the highest percentage of self-funded retirees in South Australia. The second is the member for Morphett. I look forward to the conversations that we will be having with the constituents in those electorates about what those two members are doing today.

Mr Malinauskas: There is still time yet, though.

The Hon. A. KOUTSANTONIS: That would take courage, leader. That would take conviction. That would take what Menzies called standing up for the forgotten people. Of course, Menzies had great admirers, one of them being Sir Thomas Playford. Menzies and Playford were the ideal for the Liberal Party, looking after the middle classes. But the strange alliance between the Greens and the Liberal Party—where all of a sudden we are taxing low and middle-income people to reward 400 of the richest corporations in this state and in this country—is obscene. They will have to explain that in their respective constituencies.

The forgotten Australians will stop looking towards the members opposite because they no longer represent them. If they did, they would not be voting for this. They would be voting with us, the Labor Party. We are the ones who are standing up for the shopkeepers. We are the ones who are standing up for people who aspire to a little bit more. We are the ones who are standing up for people who, because of cultural issues, do not buy properties as an investment that they will one day sell to enjoy their retirement but who are buying them to hand over to their children. They cannot realise the value of these investments; they will not do it. They would rather die than sell these properties. But the Treasurer says, 'Well, if you can't afford the tax, sell a property. You are rich.' They are not rich. They are not rich.

While I know members opposite agree with everything I am saying, I do not understand for a minute why they are still going through this facade of support for this Premier and this policy. You do not have to speak to me about this. Speak to Senator Antic about it. Speak to the conservatives in the federal Liberal Party who are speaking out about this. They are tripping over in the corridors of Canberra to talk about how stupid this is and how the Premier has got this horribly wrong. They will tell anyone who will listen about how wrong the Premier has this and how strange it is that he is doing this. Yet members opposite seem quite comfortable with just following him off the cliff.

I have to say to you, the class of 2018: what does it say to you about your influence in this party which you are a member of, and for which you gave up your other careers—whether it be on the land, in a business or in the law—when you watch Tammy Franks having more influence on Liberal Party policy than you? The Hon. Tammy Franks has a direct line to the Premier. What does it say to you that the Hon. John Darley has more influence than the member for Waite? The member for Waite capitulated on this deal four iterations ago. If only you had hung out, Sam, who knows what else you could have got?

I have to say to those forgotten South Australians that the Leader of the Opposition is listening. We are listening because the Premier is not. We are the ones who are going to fight this. We are the ones who are standing up for you. We are the ones who are trying to lighten the anxiety, not make it worse. Tom Playford looks down in shame on you lot opposite.

Members interjecting:

The CHAIR: Order!

The committee divided on the motion:

Ayes 24

Noes 21

Majority 3

Motion thus carried.

At 18:33 the house adjourned until Tuesday 3 December 2019 at 11:00.