Land Tax

The Hon. F. PANGALLO (14:36): I seek leave to make a brief explanation before asking the Treasurer a question about land tax.

Leave granted.

The Hon. F. PANGALLO: Bank SA CEO, Nick Reade, one of the state's most prominent economic experts, and who also happens to be one of the Premier's handpicked members on his Economic Advisory Council, has today come out and criticised the government's proposed land tax aggregation reforms. Mr Reade has said the proposed aggregation reforms are 'worrying a few people', and, 'Higher taxes aren't much good for business or confidence.'

He also believes the government's windfall from the proposed land tax overhaul will be significantly more than the $40 million per year the Treasury says will be raised. In an excellent article in InDaily today by Tom Richardson, Mr Reade is quoted as saying he expected the figure to be more north than that, like about $90 million a year. Mr Reade is a member of the Premier's Economic Advisory Council, a group of well-respected and diligent business leaders, handpicked by the Premier himself, whose main role is to provide—and I quote from the Premier's own website:

…strategic advice to the Premier on the State Government’s range of bold ideas and policy initiatives aimed at stimulating strong economic growth and jobs creation.

This is the same prominent businessman who backed the Liberals in leading the charge against the former Labor government's controversial and failed bank tax in 2017. My question to the Treasurer is:

1. Are you surprised by Mr Reade's public comments today given his prominent role on the Premier's Economic Advisory Council?

2. Do you agree with his assertion that the government's windfall will be closer to $90 million a year instead of the $40 million a year guesstimate through your proposed land tax reforms?

3. Has Mr Reade made his concerns known to you and/or the Premier prior to today?

4. Was the Liberal government's economic advisory committee asked to comment on the aggregation land tax policy? If so, what was that advice? If not, why does the council exist at all if it is not going to be asked by the government to comment on the impact of one of its most significant economic reform policies that will impact on our economy and the property sector, which happens to be one of the biggest sources of government revenue?

The Hon. R.I. LUCAS (Treasurer) (14:39): I thank the honourable member for his question. Given that we end up on SA-Best video, I thank the honourable member for his wonderful question and a series of wonderful questions. Where's the camera?

Members interjecting:

The Hon. R.I. LUCAS: That way, is it? I would like to thank the Hon. Mr Pangallo for his wonderful question, following a series of other excellent questions he has asked in recent days. Yes, I am aware of Mr Reade's views. I met with him and had discussions with him yesterday. I welcomed him back—I think he has just returned from a well-deserved rest or vacation—and had a discussion with him yesterday about these issues.

Mr Reade indicated to me that he was not in a position to accurately estimate the impact of the government's land tax revenues. He does have the view that it is likely to be more than $40 million, but he conceded that because the government hasn't actually finalised the structure and nature of the bill it is going to put to the house, he is obviously not in a position to give a definitive estimate or comment in relation to that, because he has not seen the final detail of the proposal.

I think if one looks closely at the summary of the statements made in the InDaily article, he indicates what he indicated to me yesterday, and that is that until there is a chance to see the final proposal that the government brings to the parliament, no-one is in a position, including himself, to make an estimate. But he does have a view that it will be more than $40 million.

As I said in response to another excellent question from the member yesterday, and somebody else's excellent question, if it is more than $40 million then the government will, as is its commitment, return more in land tax cuts by either more quickly implementing the reduction to 2.9 or even further reducing the 2.9 per cent. The government's land tax reform package is designed from a reform package to collect less land tax revenue than before the introduction of the reform package.

So, by increasing the threshold, by reducing the rate and on the other hand introducing changes to the aggregation, we are committed to collecting less land tax from those particular provisions. If ultimately it is more than $40 million, as is Mr Reade's view, then we will return more by way of increasing thresholds, reducing rates more quickly or reducing the top rate, or a combination of those sorts of initiatives.

I think what will be very interesting is that I understand in the next week or so we are likely to see the BankSA monitor, which monitors the impact of government decisions and announcements in relation to the investment climate in South Australia. I think it will be useful to see that, when it comes out, as to whether or not there has been the impact the Hon. Mr Pangallo and others—the Property Council and others—have said, that there is this all-pervasive, terrible view in the South Australian business community and South Australia about the government's budget and the land tax reform proposal.

I think that will be useful because it is an ongoing monitor that is being conducted for 10 or 20 years. It monitors the business environment in terms of the investment climate. I will certainly be watching with interest the results of that particular monitor's results in the next week or so when they are actually released, because that will give some evidence or not in relation to some of the concerns the Hon. Mr Pangallo, the Property Council and others have been raising in relation to what the concerns might be in the investment climate in South Australia and the business community in particular.

Is it as comprehensive, pervasive and all-encompassing as the Hon. Mr Pangallo and the Property Council believe it to be, or is it not? I guess that will be a useful independent assessment done by a respected monitor, which has been going, as I said, for some 10 to 20 years.

The PRESIDENT: The Hon. Mr Pangallo, a supplementary.