Legislative Council Fifty-Fourth Parliament, First Session (54-1) 54 1 Parliament of South Australia Legislative Council published Question Time Land Tax Land Tax The Hon. J.A. DARLEY Legislative Council Land Tax The Hon. J.A. DARLEY (14:56): I seek leave to make a brief explanation before asking the Treasurer questions regarding land tax. Leave granted. The Hon. J.A. DARLEY Legislative Council The Hon. J.A. DARLEY: Treasurer, under the draft bill, division 6, clause 13H(5): Corporations are related corporations if 1 of those corporations is a related corporation of a corporation of which the other of those corporations is a related corporation (including a corporation that is a related corporation of the other of those corporations because of 1 or more other applications of this subsection). My questions are: 1.	Can the Treasurer please explain what this means? 2.	Does the Treasurer expect laypeople, that is, mum-and-dad investors, to be able to understand this? 3.	Given this passage demonstrates the complexity of the bill and the fact that the government has provided no other information to assist the community in providing feedback on the draft bill, how is this considered meaningful engagement? 4.	Will the government be providing a plain English explanation of the bill so that feedback can be provided on something that people can actually understand? The Hon. R.I. LUCAS Legislative Council The Hon. R.I. LUCAS (Treasurer) (14:58): I thank the honourable member for his question. I have to say, that is one of my favourite clauses in the land tax reform bill. It does indicate the extraordinary complexity of the land tax legislation. Indeed, I could quote existing provisions of the existing Land Tax Act, which has existed for decades, which are equally complex. The honourable member has also ventured, as I have, through the intricacies of the stamp duty legislation over a period of time that he has been in this parliament, and it is even more complex and complicated than the land tax legislation. The plain meaning explanation of those particular provisions and other provisions is that they are based on existing provisions in New South Wales and Victoria in terms of their interpretation. I am also advised by Treasury and RevenueSA that they are extraordinarily similar to existing provisions in the Payroll Tax Act. The honourable member will have, I am sure in his time in this parliament, provided advice to constituents in relation to related corporations under the payroll tax legislation. There are similar grouping provisions, similarly drafted, I am advised, in relation to payroll tax, which has existed for many years in South Australia as well. The simple premise is that, I think as I referred to indirectly yesterday, if ultimately an individual or group of individuals control a group of companies, whether it be through a Noodle Nation complexity of related and interrelated companies, if ultimately the control rests with an individual or group of individuals, then they are related corporations, and therefore tax purposes will be aggregated. It is a relatively simple principle: it is the same principle applied in New South Wales and in Victoria, and it is a similar principle as is applied in payroll tax grouping provisions. If you are a related corporation, you are grouped or aggregated and you pay payroll tax on the particular group. The premise is simple but, as has occurred in other states and jurisdictions, and as occurs with payroll tax, lawyers who argue for constituents may well argue against Treasury and RevenueSA and take court action, as is their entitlement, as to whether or not the grouping provisions have been appropriately applied. There is nothing simple in tax law, and the Hon. Mr Darley should be (or would be, I am sure) one of the members in this chamber well versed to acknowledge that tax law is never simple. I can quote any number of clauses, both in the existing Land Tax Act and Payroll Tax Act, but in particular the Stamp Duties Act, which are incredibly complex, incredibly difficult to understand, but the reason they have to be is that lawyers and accountants manage to work their way around various provisions, whether it be payroll tax, stamp duty or land tax legislation, and case law establishes that you need to do this and make an amendment to that, as governments have done over the years. There is no simple way to draft tax law—commonwealth or state—there is no simple way to draft tax law. You rely on the best advice your lawyers can give you, and in this case it is the Crown in terms of trying to draft the law. In simple terms, as I said, it is modelled on existing provisions in New South Wales and Victoria, and it is very similar to the payroll tax grouping provisions that already exist in South Australia and have existed for some time.