Land Tax

The Hon. F. PANGALLO (14:54): Just to clarify that, Treasurer: yes, I know that aggregation does exist, but where did the proposal to aggregate trusts come into effect?

The Hon. R.I. LUCAS (Treasurer) (14:54): The issue isn't just in relation to the aggregation of trusts. The issue as it exists in New South Wales, Victoria and Queensland does relate to trusts, companies and individuals. As we indicated in the lead-up to the budget, a range of difficult decisions had to be taken by the government when, in the lead-up to this year's budget, we saw a $2.1 billion writedown in expected GST receipts. There were a range of difficult decisions that the government had to take. We are committed because people had been telling us that people were no longer investing in South Australia because of the 3.7 per cent top rate of land tax in South Australia.

We had been told for years that people were already not investing in South Australia; they were investing in the western suburbs of Sydney and the western suburbs of Melbourne because our land tax rate was too high. Whilst I hear the concerns being expressed about the impact on investment, we have already been told by people in the property market that the property market has already been impacted for many years because the former government was unprepared to change the 3.7 per cent and the very low threshold at which that came in, which was $1.2 million. You are paying 3.7 percent.

So for somebody who had bought three modest properties in Newton or Campbelltown 20 years ago, when $1.2 million meant a lot more than it does today, all of a sudden they were paying 3.7 per cent on their three modest properties in Newton. The former government was unprepared to do anything in relation to the reform. We said that it was unacceptable at 3.7 per cent and that we had to drive that top rate down and increase the threshold. Because of the GST writedown, a way of generating that particular reform was through actually mirroring some of the aggregation provisions that exist in the other states.

I conclude by saying again to all the opponents—and I challenge the Hon. Mr Pangallo and anyone else who wants to oppose the legislation—explain to me the fairness that I, as an individual, can next year own seven properties worth $400,000 each, but because I structured myself into seven separate Rob Lucas trusts, Nos 1, 2, 3, 4, 5, 6 and 7, I won't pay a single dollar in land tax, yet I own almost $3 million in property. I challenge the Hon. Mr Pangallo—I hope this gets on the video tonight—and indeed those who might support his view, as to how it is fair that I can own almost $3 million in properties next year and not pay one dollar in land tax just because I structured myself into Rob Lucas trust Nos 1, 2, 3, 4, 5, 6 and 7. I hope that makes the cut.

The PRESIDENT: The Hon. Ms Bourke, a supplementary. This will be the last one on this topic.