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House of Assembly - Fifty-Third Parliament, First Session (53-1)
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Stamp Duties (Off-the-plan Apartments) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 29 October 2014.)

Mr KNOLL (Schubert) (12:35): I rise today to speak about the Stamp Duties (Off-the-plan Apartments) Amendment Bill and I will indicate at this point that I am not the lead speaker. I want to make some remarks about this bill specifically and a bit more broadly about this type of incentive as a way to encourage or discourage behaviour.

The bill quite simply seeks to continue concessions for stamp duty relief that have been given to inner-city apartments. It is extremely straightforward and something that I am supportive of. As a Liberal, can I say that this is a fantastic measure to be brought to the house because it lowers tax. It is quite unusual that this government decides that lower taxes are the way to go, especially after our discussions last week of the Premier's talk about increasing charges as a way to increase productivity, but we can have that debate another time.

I would like to contrast this concession with other budget measures that the government has brought to this place, but mainly the car park tax. I want to speak about it in the general sense and not reflect on any vote that may have happened in the house. A car park tax, by its very nature, is trying to discourage behaviour. It is trying to make it more expensive for people to park in the city, therefore making alternative forms of transport into the city more viable.

I have a problem with those types of taxes because, if they work, then the revenue base that the tax would collect diminishes, rendering the tax inefficient, obsolete—anything you care to call it—and if it does not work, it becomes a beautiful, ongoing revenue mechanism for the government, punishing people who otherwise do not have alternatives to the behaviour that the government seeks to modify by the tax.

I do not think it is a good way to raise revenue because, by its very nature, if the tax does work, the revenue base is not stable. According to the 2012 Economic and Finance Committee report on state taxation, a tax should be stable in the amount of income that it delivers so it can deliver certainty to government and help with forward planning. This concession does the opposite.

This concession seeks to take away tax in order to encourage a behaviour and I think that is a more positive way to go about things. I think any measure this government brings forward to this place that lowers tax is something to be commended and the reason I think they have brought this back to the house is that it worked, and they need to extend it. From what I understand, they have been giving these concessions anyway and they are trying to get us to give some retrospective approval.

This bill is about trying to find ways to reinvigorate our city. Increasing urban infill is a great way to take pressure off the urban fringe and greenfield sites that require a lot of new infrastructure. It is a way to slow the ever-creeping boundary of metropolitan Adelaide and I think that is a good thing. I think that higher density living is good for more efficient government and, again, that is why I am happy to stand up here and support this measure because it is about trying to improve the efficiency of government service provision, especially in relation to public transport.

In South Australia the fares that are collected from our public transport system—i.e., the transport users' contribution to the public transport system—are only around 20 per cent of the total cost of providing that public service, and higher density inner-city living will help to encourage public transport use by a number of mechanisms.

It will mean that people living in inner-city apartments and city-fringe apartments will not have long distances to travel, and jumping on and off a bus will be a lot more time efficient than getting in a car and parking somewhere. I think that is a good thing, and helping to make our public transport system is a good thing.

It also helps to bring vibrancy to a city because it is only through population density that services and retail opportunities can make money. As somebody who has looked at opening up retail outlets in many shopping centres across the state and, indeed, across the country, population density or the number of people who visit a shopping centre is extremely important in understanding whether or not a retail outlet can be viable.

Increasing that density will be good for inner-city traders, for city-fringe traders and for increasing service provision by all the wonderful small bars which have popped up all over the place. I see a lot of positives by trying to increase the density of the city. Of course, I see a lot of benefits for that beautiful institution we call the Adelaide Central Market—I am sure it very much appreciates this bill.

The bill also helps to change the mindset around apartment living. South Australia is one of the least dense cities in the world. One report I read (and it is probably out of date now) said that Adelaide is the second least dense city in the world, behind Houston, Texas. That makes life very difficult for government and therefore, again, I think this bill is a good idea.

I believe that if we are to make housing more affordable we need to realise what our ambitions are for the type of house we live in. As someone whose family has travelled all over the world, and all over Europe, where high-density living is the norm, in Adelaide, in South Australia, and even in Australia, we still have a mindset around green open spaces. That is not necessarily a bad thing, but it makes it difficult for governments to be able to provide services to keep those dreams alive. It also increases the costs for people to live. So, again, this is a very good idea.

Urban infill developments are often less attractive to developers of greenfield sites because by their very nature they are smaller, they tend to run into a lot of planning difficulties, and certainly greenfield developments are easier for developers to just come through, block out whole areas and build new housing. Any measure this government takes that can help to ameliorate those expenses is a good thing.

I would like to highlight some comments that have been made from housing industry figures in relation to this issue which state that for South Australians, about $80,000 is put on to the cost of a new home. So, for an average house-and-land package worth about $450,000, approximately $80,000 goes directly to the government in the form of taxes, fees and charges—and that is a huge amount of money.

The Executive Director of the Urban Development Institute of Australia, Terry Walsh, commented that it is enough to buy two brand-new family cars or put four kids through private schools—$80,000 is phenomenal and a huge disincentive to build a new home. Fully 20 per cent of the cost of building a new home goes to the government, so anything we can do to ameliorate that cost and stimulate development can only be a good thing.

I was a great studier of the 30-Year Plan for Greater Adelaide and trying to understand the implications it had for my electorate, and for the city more broadly, especially in the context of the Barossa and McLaren Vale preservation zones that are in place. From that, the numbers are quite stark, and especially for Schubert and the surrounds of Schubert the 30-year plan has some very strong implications.

The plan breaks up Adelaide into eight different districts, and it shows what the developments will look like in each of those areas. By 'developments' I mean are they infill sites that are centred on a transport-oriented development, are they infill sites outside of those developing corridors, are they urban fringe developments, or are they developments within townships within country areas?

For Adelaide city over this time, they were only talking about 2,250 new dwellings. In eastern Adelaide, they were talking about 18,500 new dwellings, of which only about 8,000 would be centred on transport-oriented development corridors. In western Adelaide, the total figure is 42,500, with 33,000 to be around the TODs and the remaining 9,500 not to be. However, northern Adelaide is where things start to get a little bit more interesting, especially in relation to the urban growth boundary and the ever-creeping urban sprawl that creates difficulties for future governments.

In northern Adelaide, infill TODs new dwellings will be 20,500, with a further 6,000 outside those TODs, but fringe development in the northern Adelaide zone is 36,300 new homes and then townships are a further 4,800. So, fully half the new developments in the north of Adelaide will be fringe developments that contribute to urban sprawl.

In southern Adelaide, the figure is slightly less stark, with 19,500 new homes for infill around transport-oriented developments, with a further 12,500 outside of that, and 8,500 new homes around the urban fringe. So, in the south there is likely to be a lot less growth of metropolitan Adelaide, but in total about 40,500 new dwellings are to be built over the time.

Then we get to the Barossa area, which is actually wider than the Barossa; in fact, almost all the development they are talking about is outside the Barossa proper, but it certainly has plenty of implications for the outer north and the rural north, where over this time they are suggesting that 46,400 new homes will be built, of which 8,500 will be in the townships. The Barossa Council, which comprises the bulk of the Barossa, is the 10th fastest growing council in the state out of 68. I can very much see where those 8,500 new dwellings will go. It is fairly well identified in the preservation act, and the prescription of townships and the vacant land within those townships that are there to be built.

However, it is the 37,900 new dwellings that are due to be built on the urban fringe that are really going to have implications for the Barossa. Those developments come in the form of Roseworthy, Concordia and the expansion of Hewett, and Gawler East is put into that category, with the Springwood development. There is a lot of greenfield urban development going on in the outer Barossa area, and that certainly has huge implications for service provision.

We talk about the backfill and the backlog of maintenance on our rural roads, and that certainly would need to be addressed. If I look very specifically at the Gawler East, Hewett and Concordia developments, the main street of Gawler struggles now to deal with the volume of traffic that travels down that road. If we are to have this number of new dwellings, we need to see new infrastructure.

The first piece of infrastructure that would need to be built in order to facilitate this is the south-east link road that would link Barossa Valley Way, east of Gawler, and track through the gorge and meet up with Tiver Road, therefore bypassing all the Gawler main street traffic and bypassing the traffic centred around the STARplex and Trinity College. It would be a hugely fantastic development not only for the people of Gawler and for the people who seek to go into these new developments but also, indeed, for the Barossa more broadly.

Since the bituminisation of Gomersal Road—and we will call that one of the crowning achievements of the former member for Schubert, Ivan Venning, which sadly only sits at 90 km/h and not 100 but that is a different argument—that road was built for 1,000 cars a day and has now been expanded and currently moves 8,000 cars a day. It has shifted the traffic from the Barossa and, instead of coming up through Gawler through the southern vales via Barossa Valley Way through Lyndoch to Tanunda, people go up the highway and get onto Gomersal Road, and it is a beautiful drive and I do it almost every day except when I have to come to this place.

It has moved traffic, people and visitors away from the southern vales, and I think the south-eastern link road is hugely important to be able to redress that balance because, unfortunately, Gawler is a block that stops visitors from easily passing through to get to the southern Barossa, and I think that that is a shame. Not that Gawler is not beautiful, and it is nice to drive through, but it certainly puts visitors in more of a frustrated mood when they manage to get through it and out the other side.

On that point, I urge ministers opposite and I urge the member for Light that anything they can do to bring forward that piece of vital infrastructure, not only for the electorate of Light but very much for the electorate of Schubert, would be very much appreciated, and I will continue my advocacy in that gentle prodding way in which I try to go about things to achieve that.

Lastly, and to bring my remarks back to the bill at hand, can I say that an ever-expanding footprint is a legacy that will burden future governments and it will make it harder to bring the budget back to surplus. I know that members opposite have had trouble bringing the state government's budget to surplus, and we on this side of the house are always here to give free tips, free bits of advice—

The Hon. T.R. Kenyon: They've never had a surplus; never actually delivered a surplus.

Mr KNOLL: Sorry, you have never actually delivered a surplus, was that, member for Newland?

Members interjecting:

The DEPUTY SPEAKER: Order! I will start having to call people to order by the name of their seat shortly. Let's not do that.

An honourable member interjecting:

The DEPUTY SPEAKER: I do not want to hear another word. Member for Schubert.

Mr KNOLL: Thank you, Deputy Speaker. We could talk about budget savings in the form of what types of hotels ministers who go on overseas trips stay in.

The DEPUTY SPEAKER: That really has nothing to do with the bill, so off you go or I will have to call you to order.

Mr KNOLL: Stamp duty concessions will hopefully incentivise and have incentivised the building of apartments and high density, inner city living. I think that is a fantastic idea because it takes the pressure off the urban fringe. I think it is something that will help to increase the vibrancy of business to improve service provision within the inner city area. As I said before, it will help people to stop off at these beautiful small bars and have a nice glass of Barossa shiraz before they catch the bus on their way home to Gilberton, and all the other places that will benefit from this policy.

Ms Redmond: Where will they go to the toilet?

Mr KNOLL: The member for Heysen asks where they will go to the toilet.

The DEPUTY SPEAKER: No, you would not want to entertain that, would you? You would like to go on with your debate; you have two minutes left.

Mr KNOLL: This is a bill which we are happy to support and I would hope that over my time in this place, over the next 3½ years, we will see more of these types of initiatives from the government as they realise that increasing taxes is not an effective way to improve vibrancy and, indeed, is counter intuitive. Whether it works or does not work, it does not seek to give the outcome and the social engineering that the government hopes it will, but instead uses tax cuts as a very effective mechanism to be able to increase the affordability of housing but also to have all sorts of other flow-on benefits for the City of Adelaide and the surrounds.

Mr PEDERICK (Hammond) (12:54): I rise to speak to the Stamp Duties (Off-the-plan Apartments) Amendment Bill 2014, and note that it was introduced on 29 October 2014 and concerns amendments to amend the stamp duty concession for apartments bought off the plan to include the inner metropolitan area. I note that back in 2012 the current Labor government introduced some stamp duty relief for off-the-plan apartment sales in the city and also at Bowden and Gilberton. This provides a full stamp duty concession for off-the-plan contracts, entered into up to 30 June 2014, and these are capped at a stamp duty payable on a $500,000 apartment, and that stamp duty is $21,330. There is a partial concession for the ensuing two years.

It is noted that in 2013 the government announced a policy to revitalise the inner metropolitan area, allowing for up to 18,500 new homes. It was the government's intention that it would extend the stamp duty relief for off-the-plan apartment sales to rezoned inner metropolitan areas, saving people the stamp duty on the cost of purchasing a new apartment. This was effective from 28 October 2013 up to 30 June 2014. As I indicated earlier, this has partial concessions of between $3,250 and $15,500 of stamp duty for the next two years.

Applications currently submitted to RevenueSA have been catered for with ex gratia payments, and this bill is to confirm the legal authority to provide the concessions. The government has indicated that the expansion of the targeted stamp duty grants will cost up to $7 million. This figure was confirmed in the 2013-14 Mid-Year Budget Review, and represents the amount for the three-year period up to July 2016. There is an estimation that around 260 applications have been processed so far, costing about $4 million.

We have to be aware of the hit on the budget, knowing the state of the budget deficit. In saying that, it is a good idea to try to revitalise the city. We note that 100 years ago there were tens of thousands of people living in the inner city of Adelaide.

Ms Chapman: It was 46,000.

Mr PEDERICK: There were 46,000, I am advised by the member for Bragg.

Ms Redmond interjecting:

Mr PEDERICK: I am getting different figures.

The DEPUTY SPEAKER: Well, you shouldn't be listening to them. The member for Hammond.

Mr PEDERICK: Thank you, Madam Deputy Speaker. The member for Heysen indicates that it was over 100,000 about 100 years ago. There has been a steady population drift out of the central city area, and obviously a lot of that has come with better access to outer areas, and obviously better transport—we are not all riding horses, and thankfully we are not all riding bikes, but that is another matter.

The Hon. L.W.K. Bignell: You'd look good in lycra.

The DEPUTY SPEAKER: Order!

Mr PEDERICK: Thank you for your protection, Madam Deputy Speaker.

The DEPUTY SPEAKER: Lycra is such a vicious fabric.

Ms Redmond: It is we who'd need protection, Adrian, if that happened.

Mr PEDERICK: Absolutely.

The DEPUTY SPEAKER: He would need more than my protection in lycra, wouldn't he?

Mr PEDERICK: Are we just going to go to lunch now?

The DEPUTY SPEAKER: Would you like to seek leave to continue your remarks?

Mr PEDERICK: I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 12:59 to 14:00.

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