Statutes Amendment and Repeal (Budget 2015) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 10 September 2015.)

The Hon. R.I. LUCAS (12:38): I rise on behalf of Liberal members to support the second reading of this bill. In doing so, I indicate that I made my substantive contribution on the budget bills in the Appropriation Bill debate and do not intend to repeat those comments of a general nature. The comments I address to this measure will be specific issues relating to the drafting of the government's proposals that have been raised by individuals and/or groups in relation to the government's position.

At the outset, I indicate that the Liberal Party's position has generally been, with a few rare exceptions, that whilst we may well object very strongly to the government's budget direction and that we may well object strongly to the individual measures that have been introduced in the government budget bills, as I said, it is only on the rare occasion that we have moved by way of amendment or opposition to specific provisions in the legislation. The most public and more recent of those was the government's attempt to introduce a car park tax in recent budgets. Nevertheless, as I said, a number of individuals and groups are very concerned about aspects of the government proposals. I intend to place on the public record some of those concerns on behalf of those groups and individuals.

Given that we have, I think, a two-week break coming, I would seek from the government or the minister handling the bill an indication as to whether the government is prepared to assist by perhaps providing an early copy of the government's prepared response at the second reading to the detailed issues that some of these groups have raised. If that is possible, it would assist me in circulating it to the individual groups prior to the committee stage and then we can pursue any remaining issues during the committee stage of the debate.

Failing that, if the first we see of the government's second reading response is on the next sitting day in the next sitting week, I flag that we would not be in a position to proceed to the committee stage immediately. We would, at that stage, circulate the government's response to the stakeholders and seek their further advice so that we can raise further questions if need be during the committee stage of the debate.

My proposition, as I said, is to place their concerns on the record during the second reading debate. In particular, there is a very detailed contribution and analysis by one of the foremost tax experts in the state—someone who is, I think, acknowledged by both the government and the opposition as quite formidable in terms of providing advice on state tax issues. I will place on the record a very detailed submission that that person has raised with me to seek the government's response to those issues.

The first issue I want to raise is one that the Local Government Association and individual local governments have been raising. Some of my colleagues in the House of Assembly debate have also raised this particular issue. Within this budget, the government has announced that, from 1 July this year, local government would be liable to pay extractive royalties where land being mined is not covered by permit, claim, lease, licence, tenement or private mine under the Mining Act 1971, and the budget initiative is estimated to raise approximately $1 million per year at a royalty rate of 55¢ per tonne.

It is clear that there was virtually no consultation with local government about this particular measure, and local government collectively is very concerned about the impact on their operations and their budgets. The opposition has been provided with some detail from the LGA and from some councils as to the financial impact. Some of the most affected councils are very small and in rural and remote areas.

We have been advised, for example, that the Kangaroo Island Council believes the financial impact will be $99,783 per year; the Wudinna council believes the impact will be $44,550 per year; and the Karoonda East Murray council believes the impact will be $60,830 per year. In the case of the Karoonda East Murray council, for example, that $60,000 impact, we are advised, works out at approximately $55.30 per rateable property within that very small regional council area.

The Local Government Association has indicated that they believe this estimate of $1 million is very rubbery. That is not their word, but I guess it is mine. The concern they have raised is that they are not aware that, on the current information that is generally provided, Treasury would be in a good position to estimate accurately what the revenue impact might be. We are also advised that in the last 12 months, 39 South Australian councils have reported production of extractive minerals from quarries or borrow pits which are not regulated under the act. Nineteen councils—14 in the metropolitan area—have not been providing any information in respect of extractive mineral production.

The government's position as outlined to the LGA by the Treasurer, as we understand it, was that the primary concern in introducing this was the issue of competitive neutrality; that is, the government was interested in making sure that private quarries would not be disadvantaged because local government did not have to pay the same royalties as private quarries. The Local Government Association is concerned that for a large number of councils, in particular those located in rural and regional areas which are long distances from the metropolitan area and also where quarries are long distances from where road maintenance is taking place, this particular item is more to do with raising revenue at the expense of money being able to be spent on road maintenance.

The LGA has indicated to the Liberal Party that, in their discussions with the government, the Treasurer indicated a willingness to consider a submission from the LGA outlining their concerns and he was also prepared to give consideration to a rebate scheme. As I said, that is the contention of the Local Government Association, and it will be for the Treasurer to indicate whether that is a fair reflection of the discussion he had on behalf of the government with the Local Government Association.

The Local Government Association is obviously lobbying against this provision in its entirety. It does not accept the competitive neutrality argument. However, I believe that one of the options that is at least been canvassed is whether or not the government would be prepared to consider an arrangement where the bill could be amended to ensure that royalties on extractive minerals are only payable by councils where they are engaged in selling the rubble; that is, where they are in competition with private operators. So, for those councils that are not selling it, where they are just using it for their own purposes, whether or not the government would be prepared to make that particular exception.

We are obviously interested to know the extent of the government's, and in particular the Treasurer's, discussions with the LGA, whether it is correct that the Treasurer has indicated a willingness to consider amending the government's position in some way. If that is the case, does that require government amendments to the bill that we have before us or can he achieve that particular policy objective through mechanisms other than an amendment to the bill that is before the council at the moment?

The second issue I want to raise is one my colleague the member for MacKillop raised in the House of Assembly at some length. It is in relation to the stamp duty changes in the legislation. I am indebted to the member for MacKillop, who has done a considerable amount of work in relation to clause 31 of this bill, which amends section 67 of the Stamp Duties Act. He has traced the history of this going back to the original debates in 1990, when Frank Blevins was the Labor treasurer and Stephen Baker, I assume, was the shadow treasurer or finance spokesman for the Liberal Party at the time.

This particular provision in the act, which is being addressed in this bill, was addressed at the time, in that original debate in 1990. Mr Stephen Baker (who was the member for Mitcham I suspect at the time in 1990) sought to move an amendment at that time to the original debate on this provision which read as follows:

…a conveyance that relates to separate parcels of property that is being conveyed by different persons to the same person (whether that person takes alone or with the same or different persons) where the commissioner is satisfied no arrangement or understanding exists between the persons conveying the property otherwise than to convey the property separately and independently from each other.

The opposition on 27 March 1990 sought to clarify section 67 by putting in an amendment which very clearly stated that if the property was being transacted from two separate persons from two separate vendors to the same person it would not be captured under section 67. The Hon. Frank Blevins indicated that the government opposed the amendment and Mr Baker went on to say in his explanation:

We are trying to avoid the situation where a person in good faith happens to buy adjoining properties which are under separate ownerships. I would be astounded if the minister said to me, that in the situation of a person buying property which is vaguely related from two separate individuals, there should be an aggregation of property values for duty purposes.

The Hon. Frank Blevins's response on behalf of the government was as follows:

Where a person enters into two quite separate contracts to buy land—it may be adjoining but under separate ownership—they are not covered by proposed new section 67. There are clearly two separate contracts bought from two separate people, and this section would not apply. It does not apply now and it will not apply in the future. It has never been and will not be a problem…

Further on he states:

…assuming that Parliament passes this Bill substantially as it was introduced. So the answer is 'No,' the Deputy Leader need have no fears that genuine separate contracts will be touched by this Bill, because that is not the intention of the legislation.

It can be no clearer than that: that is, the opposition at the time raised a concern about the new provision in 1990, raised the specific issue; the minister or the treasurer, clearly based on crown advice and Treasury advice at the time said, 'No, no amendment is required because what you're concerned about has never been able to happen and will not happen in the future.'

The member for MacKillop, in his contribution, raised an issue where indeed a constituent of his had recently bought a number of adjoining farming properties; his conveyancer had sought a ruling from the commissioner of stamps as to the amount of duty payable and the commissioner said, 'We will aggregate this land as per section 67 notwithstanding that the properties involved were from individual vendors.' He went on to explain subsequently that there had been a document, dated February 2008, relating to interpretations of section 67 and where the stamp duties commissioner or RevenueSA had indicated it was now going to interpret this particular section 67 in a way completely contrary to the assurances that had been given by treasurer Blevins and the government in 1990.

That is the history of this and I think, not unreasonably, the member for MacKillop has raised these issues with the government. The Treasurer's response is as follows:

This advice that was provided incorrectly to the parliament at the time, not intentionally—unintentionally—but the outcome is the examples you have shown to the parliament.

The Treasurer said:

I am advised by the commissioner that section 67 of the Stamp Duties Act 1923 has always been the subject of some dispute between the commissioner and taxpayers. In the year 2000 Revenue SA received comprehensive advice in relation to the application of section 67. That advice has applied to this day and it is the basis upon which Revenue SA has issued its document guide to section 67 of the act. The advice in 2000 made it clear as to how this particular provision was going to be interpreted.

I am seeking from the Treasurer some further assistance in relation to this. I am assuming it is the year 2000—I think the member for MacKillop has referred to a document on RevenueSA's website dated 2008, and it may well be that that is just an update of the 2000 advice. But assuming the Treasurer's statement is accurate, that the new position of RevenueSA was adopted in the year 2000, can the minister just indicate as to the nature of that advice that was provided to RevenueSA?

I obviously have a degree of interest in this because if it was the year 2000, as opposed to 2008, that was when I was treasurer. I seek confirmation as to whether it was on the basis of a particular court case that has been fought and lost or fought and won by RevenueSA. Generally this is the way new rulings eventuate through RevenueSA; that is, a particular court case is fought and won, a precedent is established, and RevenueSA and Treasury advise the Treasurer of the day, 'Here is the case and this is how we will now have to rule in the future.'

It may well be the case that no member had a constituent in the last 12 months of the Liberal government who raised this particular concern, and it may well be that it has only been a concern in recent years where someone has raised this issue with a member of parliament and someone such as the member for MacKillop has taken up the issue in the public forum of the parliament. I seek the government's responses to whether or not there was a court case and the advice that was provided as to why it needed to be interpreted in this way.

I guess the issue that remains, irrespective of whether it was in 2000, 2008 or whenever it occurred, clearly, as the member for MacKillop's homework has demonstrated, the current rulings of RevenueSA are contrary to the assurances the former treasurer Blevins gave to the parliament in 1990. This is no criticism of treasurer Blevins: his advice to the parliament would have been based on crown law advice, RevenueSA advice or Treasury advice at the time. Something has obviously occurred subsequently to change that advice.

But it is clearly within the capacity of the government to further reflect on this issue and to consider whether or not the original assurances given by treasurer Blevins should be confirmed by way of legislative amendment, and that is the assurances given in 1990 to the parliament and, if the most recent crown advice indicates that incorrect advice was given to the parliament, whether or not the government is disposed to correcting or altering the position to be consistent with the advice that then treasurer Blevins gave to the parliament.

To conclude this particular point, my request to the government then in relation to this bill, whilst I understand the history and why we have got to the position we are and the people's positions, what are the government's arguments for and against making an amendment along these lines in terms of the original assurances treasurer Blevins gave and what might be the costs to Treasury should those changes be made? With that, I seek leave to conclude my remarks later.

Leave granted; debate adjourned.