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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-04-07 Daily Xml
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HOUSING TRUST LAND TAX

90 Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (30 September 2008). With respect to the SA Housing Trust's land tax liability—

(a) why do South Australian public housing authorities pay land tax under the tax equivalent regime and then have this liability reimbursed for no net budget gain;

(b) why is South Australia the only Australian jurisdiction where public housing authorities pay land tax; and

(c) how much government money is spent annually on processing public housing land tax payments?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations): I am advised the following information:

(a) In accordance with provisions in the Commonwealth's Competition Principles Agreement relating to the tax treatment of government enterprises, commercial government enterprises, including the South Australian Housing Trust (SAHT) in its capacity as a property manager, became liable for the full range of state taxes, including land tax, from 1 July 1997.

The land tax paid by the SAHT does not provide additional revenue to the State as funding is provided to the SAHT to meet its land tax liability.

This arrangement was entered into so as not to breach the funding arrangements under the Commonwealth State Housing Agreement whilst capturing, to the extent possible, the competitive neutrality objectives of tax provisions in the Competition Principles Agreement.

Clause 4(20) of the Commonwealth State Housing Agreement provides as follows:

'The Allowable Uses of funds outlined in subclause 4 (19) do not include meeting those parts of any costs of providing housing assistance that may be attributable to obligations arising from the operation of a Tax Equivalent Regime, where that would involve a net reduction in funds available for housing assistance.'

(b) Other jurisdictions have placed their own interpretation on the scope of the tax provisions in the Competition Principles Agreement as they relate to public housing authorities, having regard to the structure and operation of their authorities. In some States (e.g. New South Wales), public housing authorities are constituted as government departments rather than public enterprises whereas in South Australia, the SAHT operates as and is classified as a public non-financial corporation (PNFC).

(c) It is estimated to cost $3,000 annually to process the public housing land tax payment.

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