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House of Assembly - Fifty-Third Parliament, First Session (53-1)
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Bills

Stamp Duties (Off-the-plan Apartments) Amendment Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr PEDERICK (Hammond) (15:40): We were having a bit of debate before we adjourned about the population of Adelaide about 100 years ago and I was relying on information passed to me while I was speaking, whether reliable or unreliable. At last I can now say that I believe it to have been that in 1915 the population of Adelaide was around 46,000.

The DEPUTY SPEAKER: Someone said 100,000, didn't they?

Mr PEDERICK: Yes, someone did, but I will just place that on the record now. I do not think it was a hanging offence to put that other one up.

The DEPUTY SPEAKER: I do not know. That was misleading the house.

Mr PEDERICK: I am correcting the record and from memory—and the Hansard can be checked—I did say that I was advised. What I was saying before the break was that we do not have anything like that population in central Adelaide at the moment and I believe there is certainly lots of scope for room if that is the way you want to live.

Obviously for someone like me who comes from the country, living in a small apartment in a block of flats would not be my idea of a lifestyle, but for some people it is ideal, especially with regard to double income no kids (DINKs) and professionals. These days a lot of professional people and their partners work and they are keen to save money and put things away for when they change their lifestyle into the future. It certainly suits many people but, as I said, it would not be for me.

What we see nowadays, not just with apartment living but in urban living and in larger towns, is that a lot of the blocks are subdivided into smaller and smaller blocks where you see houses with very limited garden, if any at all. In fact, in some areas there is barely enough room to park a spare car on the lawn, but that is the way we are.

I think as a population in South Australia—especially people who are living in the more urbanised centres and the larger towns as well—we are busy. With many couples, I should say, both people work and so people do not have too much spare time on their hands. I do applaud the people who still like living in the broader areas and also the ones who have the older traditional style of urban living, but when the quarter-acre block can be subdivided into four blocks or more at some stages, it is a different arrangement.

Under this bill, the extended area of the stamp duty concession will apply to developments within Adelaide City Council, Bowden, and Park 45 Gilberton, as well as around the inner metropolitan area bounded by Regency Road, Hampstead Road, Portrush Road, Cross Road, Marion Road, Holbrooks Road, East Avenue and Kilkenny Road. If you look at the bill, it is mapped out quite clearly for people to see.

One interesting thing I note from the minister's second reading speech is that the extended area also includes sites that are contiguous to the boundary of that area; for example, it will include sites on both sides of the bordering roads. I think that if I was on the other side of any of those roads I would be getting good advice to make sure I was getting the stamp duty concession. The minister may like to help us out with that during his closing remarks.

I note the Housing Industry Association have indicated that they welcome any stamp duty relief, and they would like to see that extended to other areas. They also indicated that multi-unit apartments make up only around one quarter of new constructions and that conditions in the building industry are quite tough at the moment. I think, as has been outlined throughout the notes, that this will allow for more of a mix of commercial and residential developments to these targeted areas in the inner city, and that is why this is being extended to areas close to the centre of Adelaide.

Applications for these eligible off-the-plan apartments within the extended boundary are currently being submitted to RevenueSA to be paid by way of ex gratia payment until the Stamp Duties (Off-the-plan Apartments) Amendment Bill 2014 comes into operation. I figure the government thought there would not be too much trouble getting this bill through the house to become an act. In speaking to the bill, I note that we support the bill and note that it does come at a cost to the government. I hope that developers do not take it into their sights, that just because they know that people are getting stamp duty relief they add that to the cost of construction, so in the end the purchaser does not really win. I hope that does not happen.

Certainly, in close urban planning this works really, really well. I think as a state we really need to look at our housing developments to make sure that with urban sprawl we do not keep building on the state's best prime agricultural land. The city will extend from Aldinga and Seaford all the way up to Freeling. The country around Gawler and Freeling I know fairly well because both sets of grandparents came from that way. It is a shame to see that land being developed as it is, whereas I think there are some far better opportunities in different areas.

One place that I have been championing in here is the Gifford Hill development at Murray Bridge, with the racecourse project which, apart from the racecourse facilities, will unlock 3½ thousand housing sites on that area and up to 500 more on other areas closely associated with that project in the Murray Bridge area. The new Murray Bridge council will be looking at plans into the future. Before it went into caretaker mode, with the local government elections, the council was having a very good look at what areas could be developed if Gifford Hill does not go ahead. I think we really need to have a look. We have seen the debacle at Mount Barker—and it was a debacle—with development going in and services still catching up. We note the Bald Hills interchange is finally going to go in one day—thanks to the federal government—and we just need to have things planned a lot better.

I look at areas in my electorate like Murray Bridge where you are an hour from the centre of the city, with very good value-for-money housing and it is very quick to get into Adelaide central on the freeway. I know a lot of people do that: they get value-for-money housing in Murray Bridge and travel into the city.

In regard to other housing and planning and looking at the development of not just the city but the state, there needs to be a lot more work done on where the better spots are to house the growing population, and we need a growing population to develop the economic base so that we can get the right outcomes for this state into the future. I certainly think in regard to this bill, even though it does come at a cost to the state—and, hopefully, some of that will be recouped in other rates and taxes that people who will live in the apartments will pay—it will open up a real opportunity for Adelaide to get a more thriving populace here and make Adelaide an even better place than it already is. With those few words, I commend the bill.

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (15:51): I rise to speak on the Stamp Duties (Off-the-plan Apartments) Amendment Bill 2014 and indicate that I will be the lead speaker for the opposition. As has been suggested by other speakers, the opposition will support this bill. It is not without criticism, and I have criticised this program before, not because it offers relief to those who are proposing to invest in off-the-plan apartments within the metropolitan area (within a more restricted area as applied up until 1 June but now we will be expanding it under this bill), but because it is not universal. It is not across South Australia. It is not even across the whole metropolitan area.

I have been critical of that in the past, and I have also been critical of the fact that it is curious to me that I think the biggest single beneficiary of this type of legislation is not just those who may avail themselves of some stamp duty relief as a concession within this geographical area, but the owner of property within this area (which is owned by the South Australian government) is significant, very significant. With the expansion of the boundary under this bill, it will be so even more, and I want to refer to that in a moment.

The revenue that is lost as a result of these types of initiatives is actually very much less than what had been budgeted for when it was announced several years ago and, again, that gives an opportunity for, I suppose, that saving to be better utilised to continue to make this benefit available. As I point out, it is a stamp duty concession of which the state government is the biggest beneficiary.

The Stamp Duties Act 1923 itself essentially makes provision that certain instruments, namely, documents, are stampable and that a duty applies to them, worked out on the basis of the value of the consideration of the transaction in the document. It is something we have had for a very long time. It is a very significant income earner for the state, and it applies, as we used to say at law school, on just about everything except the letter to your mother. Anything in writing, pretty much, is stampable except certain exceptions, and certain concessions are allowed in a schedule of concessions under the legislation.

I should go back to say that a couple of years ago the government introduced this concessional stamp duty relief for off-the-plan apartments within the city plus the Bowden and Gilberton zones, if I can describe them as that. The Bowden zone covered a major government development, the Bowden Village on the old Clipsal site in the north-west precinct just off Port Road. The Gilberton site was earmarked already for a development which has limped along a bit since, but I am assured by various developers who have interests in it that it is going along pretty well for the sale of apartments there.

The government had decided not just to say, 'We want to support the vibrant city and increase population within the city square but we are going to add on two little bits that suit us.' Why? Because they want to fast-track the sales for a property at Gilberton and they certainly want to get some stimulus into what was otherwise a staggeringly slow cumbersome development of the government. By that stage, I think something like $100 million of taxpayers' money had been already spent on that site to prepare it for development, and the government was desperate to try to recover some money for it.

They provide these little initiatives, concessions as it were, I think to hasten their own sales. Remember that the government had got into the business itself of building apartments as a result of the nation-building money, the stimulus money that the government had showered us all with. Some of it had gone to some good projects, some of it had gone to some shocking projects like pink batts and school buildings and all sorts of things that were a disaster but, in relation to applying money to give the opportunity for people to build apartments, the government got into the apartment-building business big time.

Where did they build them? They built them in the city of Adelaide. Unsurprisingly, in 2012, when it wants to tell the world that it is going to do this great new thing of giving a concessional advantage, guess what? It gives a big concessional advantage to itself—a very significant and I would suggest the single biggest owner of assets within the precinct that we are talking about. Having done that, they said this would be a stamp duty concession. It was capped, payable on up to a $500,000 apartment, and there were partial concessions over the next two years.

In October last year, the government announced the policy was to revitalise the inner metro area, allowing up to 18,500 new homes. The government announced that it would then extend the stamp duty relief for off-the-plan apartment sales to rezoned inner metropolitan areas. Again, this would offer a saving to the public. It was all pre-election. It was all the hype around how we were going to expand the boundary of this and now take it out to the area bordered by Cross Road, Portrush Road, Regency Road in the north, and essentially along Marion Road and Holbrooks Road in the west. That is quite a significant expansion.

It is a very big area, now from the state electorate of Bragg, Norwood, in the state seat of Adelaide, West Torrens—the Treasurer's electorate gets a big kick-along there—and the seats of Ashford and Unley. I will skip over the Treasurer's electorate and the benefit it has to his constituents, although he might have thought he was under a bit of pressure before the last election, so he might have needed to prop up his vote out there. In any event, I have absolutely no doubt whatsoever about what was being propped up in the seat of Ashford.

While I mention Anzac Highway, where development plans have been done and amended to provide for development, I got a report today under FOI in respect of the Wayville train station. It had a staggering number of people who were going to the Wayville train station in the last two years—a daily pickup of some 300 people a day. Can you believe it? We have just spent I do not know how many tens of millions of dollars on a new station for such a small number. I concede that it will probably increase a bit. There is always the show—you have to add this extra provision for the show.

But let me say that this report, now it has finally been disclosed of course, tells me that what it is hoping to do is to have a major development down in the Ashford area on the Keswick site, which I actually think is a very good idea. There are lots of good transport initiatives right next to it—Anzac Highway, trains, trams, beautiful new stops—and you have proximity to the city, you have proximity to parks. It is a brilliant area to develop except that the federal government owns it, so unless it is actually going to become available for development for housing, that sort of infrastructure build down there is, frankly, a bit of a waste at this point.

Nevertheless, I detract from the importance of what was happening here. Prior to the election, the government wanted to say, 'Yes, we're still into vibrant cities. We're still into bringing people into the city, but now we're going to expand it around. We're now going to talk about providing that benefit to a whole lot of inner metro areas.' Guess where one of the other big property sites is? Of course, along Greenhill Road, Housing Trust—owned by the government. Then there is that magnificent Caroma site, which was bought under the former infrastructure minister Patrick Conlon.

We have very significant asset purchases by the government within the metropolitan area of the city square itself. They are big investors in this. They are the ones, of course, who are going to be the greatest beneficiaries of whatever stimulus comes from this initiative, so I am not under any illusion as to who is really the beneficiary here. I am just hopeful that those out in the real world who are investing their money in an attempt to have some benefit and provide stimulus to the general economy will at least get some benefit. We are not opposing it, but I point out who is actually getting the stamp duty relief in a huge lick.

The other thing is that the expiry date for this is 30 June, so we need to deal with this bill to be able to cover the ex gratia payments that the government has been giving to people, as I understand it, either as some benefit up or as a refund to enable them to continue to have the benefit of this. Obviously, the legislation needs to be dealt with. I am not sure whether it could have been dealt with by regulation or whether, in fact, the ex gratia payment that it is currently giving is under regulation. All I know is that obviously we were at least advised that it needs some legislative cover to provide for the legitimate relief that has been offered to those who have benefited under this scheme as of 30 June 2014—so, over the last four months.

Industry generally in the housing sector obviously welcomes something like this because it does mean that they have some chance to have some stimulus in the lower end of the market. It does not help those who are trying to build houses or rebuild or upgrade or sell property that is already developed, but at least in this small niche of under $500,000 apartments, as I say, it provides some relief.

Whilst the government has a 70:30 brownfield-greenfield development policy within its 30-year plan—and I do not have any objections to that—my biggest concern is that the government keeps saying they will support some greenfield in their 30-year plan and, next thing, when something like the proposal at Roseworthy comes along, they just want to crush it because it is politically expedient to do so in an election campaign. After stringing developers along for a couple of years, they just say, 'No, we don't need it; we've got 15 years' supply of available land for greenfield development, so go away. We're not interested in approving your proposal.'

The reality is that they do make these decisions and provide these incentives and you can bet your bottom dollar that, when they do, it is for their benefit directly as it is in this case and indirectly if they are able to stimulate other people, real people, to invest in these projects. Then they want to be able to get the land tax and the benefit of all the other costs of developing a dwelling and then living in it. Unlike previous governments which, since the Hon. David Tonkin's day, have protected the right to be able to live in your own house without paying land tax, the Treasurer's great new initiative for this last budget is to give us a backdoor land tax and give them a huge whack when it comes to their own home.

I think that is shameful, because the government was not even up-front prior to the election to allow for it, to actually tell the people of South Australia that it was going to tax people to live in their own home, which is a disgusting approach given the commitment the government says it has to South Australians. Not only that but with the cars that everyone is driving around, most people have not even got their renewal of registration yet. Wait until they get it and find the emergency services levy on that.

So the tsunami is coming on this and I am only thankful that our Leader of the Opposition has had the initiative to come into this parliament and say that, for all of the appeals, for all of the reviews that we are going to have to have on emergency services levy assessments—whether it is on aggregates or whether it is on the assessment or whether it is on the categories on which the emergency services levy is to apply—we must have a review process, an appeal process, different from going off to the Supreme Court at great cost, and be able to have an accessible and affordable review process, and he was instrumental in bringing that to the parliament.

The government finally agreed to take up the valuation review on that, and our leader has taken up the initiative to present to parliament that all of the reviews in respect of this area be able to have an expedient process of appeal, which they richly deserve, especially given the government's disgraceful approach in hitting the people. Do not be fooled by this government who comes in here and gives some relief on this basis. It is like saying, 'We are going to give you a new asset or we are going to give you something that you can thank us for, and then we are going to rape and pillage you for the rest of your life on that asset.'

Do not be fooled by this. It is a small relief, it is a start. We do not say no to some tax relief but, on its current form, it is inequitable in not applying to all South Australians. All South Australians should have the right to be able to acquire a property with some stamp duty relief, not just those chosen few who the government is trying to stimulate to come and buy one of their apartments.

Mr TARZIA (Hartley) (16:07): Broadly, today I will speak in support of the Stamp Duties (Off-the-plan Apartments) Amendment Bill. I will support the bill, firstly, because I think it is necessary to support a struggling construction sector. We have heard comments from the Property Council of Australia recently in support of this, but one thing I will note from the report that I have in front of me from 2010-11 is that the property industry is South Australia's largest private sector industry adding $8.1 billion to the state's economy in 2010-11.

It generates 10 per cent of the state's gross economic product and, of even greater importance, the property sector is also the state's second largest employer after the public sector, employing 73,000 South Australians. I have them in my electorate and, if they are not their own proprietors, they are employing people. I talk to these small to medium business owners, especially in the construction sector, and they are all struggling at the moment. The margins are thin, the work is slowing down and we need to support them, and so I will certainly support any incentive that gets behind the struggling construction sector.

Secondly, as the member for Schubert pointed out, I believe this is also going to be positive for inner-city traders. Again, with the ones who are struggling at the moment, I think if we can support them that would also be beneficial and have wider implications for the rest of the state. Thirdly, I will also be supporting it because I think we have to try to keep people in South Australia. We need an incentive for young people to want to invest in South Australia. We need an incentive for young people to buy in South Australia, to buy houses in South Australia and to stay in South Australia.

I am running out of friends from university. Do you know why? Not because I am unpopular but because they are leaving, they are going interstate, because the jobs are not here and the opportunities just do not seem to be here like they were. I think we as policymakers and lawmakers need to incentivise our youth especially in these days of rising property prices. If we can incentivise them to stay here, then why not?

Fourthly, it is also important for a vibrant city—and we have heard those arguments time and time again. If you have more people in the city and if you have more people coming into the city, that also flows onto other parts of the economy, and it makes more opportunities and prospects for things like public transport in the city. If you have more people in that central business district that is a good thing.

I was reading a paper recently with regard to the inner-city model. This is not the way out forever, but I think in the short term we should all be focusing on creating a sustainable inner city model where businesses can grow and residents can prosper, but not only into the city, we want to grow them so that they can then export out of that central model. There has to be that little bit of, I suppose, economic self-interest. Without that economic self-interest where is the incentive to invest? Where is the incentive to grow? There has to be a genuine competitive advantage. I think this is a good initiative that will at least start that.

In terms of criticism, you could always criticise this bill as well. The main criticism that I would like to make on it, and to be as constructive as possible, is that it does not go far enough, it definitely does not go far enough. The Housing Industry Association has indicated that whilst it does support and welcome any stamp duty relief, it should be extended to other areas. So, I say to the government: go out to consultation, talk to a few more groups and if there is opportunity in the budget moving forward I think we should do this for more than just multi-unit apartments because I note that they only make up around one-quarter of new constructions, and industry conditions are certainly very tough.

When the government introduced the Stamp Duties (Off-the-plan Apartments) Amendment Bill in 2014, I was keen to look at it. I note that it does introduce the legislative amendments to extend the stamp duty concession for apartments bought off the plan. There are always arguments concerning the extent of that zone, and we have heard some very good ones from the member for Bragg. At the end of the day, we do need to, at least initially, draw a boundary somewhere. Perhaps that could be reviewed down the track.

I think that, all in all, this bill does go to the heart of creating a much more vibrant city. I think it is a much-needed aid for the property sector that we should all be supporting. I commend the bill to the house.

Mr WHETSTONE (Chaffey) (16:11): I too rise today to speak about the Stamp Duties (Off-the-plan Apartments) Amendment Bill and to put my support forward for it. The bill introduces legislative amendments to extend the stamp duties concessions for apartments bought off the plan to include the inner metropolitan area. In 2012, stamp duty relief for off-the-plan apartment sales in the city and Bowden and Gilberton was introduced. Then, in 2013, stamp duty relief was announced for off-the-plan apartment sales to be rezoned in the inner metropolitan areas. It is estimated that there have been about 200 applications to date, costing the government about $4 million.

The additional concession applies to developments within Adelaide City Council, Bowden and 45 Park, Gilberton, as well as the inner metro area bounded by Regency, Hampstead, Portrush, Cross, Marion, Holbrooks and Kilkenny roads and East Avenue. So, while I support the initiative, it is clear that the stamp duty relief does not stretch far enough. As the member for Hartley has said, stamp duty relief is not inclusive of all South Australians. It is there for a minority group in the metropolitan centre. Where is the wider, broader support for many more South Australians? Stamp duty has been described as a necessary evil, but the extent of stamp duty in South Australia, on a national scale, is certainly not encouraging, and it is certainly not encouraging growth.

A stamp duty calculation on a $300,000 residential property in South Australia, and I have not been into the real estate sphere for some time, is $11,330. If we go to Western Australia, it is $8,800 and in the ACT it is $7,500. If we go to Queensland, how can Queensland do it for $3,000, on a $300,000 home? Stamp duty on a median average house price of $390,000 in Adelaide in 2000 was about $4,200 but today, for that $390,000 home, stamp duty exceeds $15,000. So, in the year 2000 it was $4,200, today it is more than $15,000. That is outrageous. That is one of the biggest disincentives. My son recently purchased a home in metropolitan Adelaide and I was gobsmacked at what stamp duty cost him. Many people, particularly young ones, are saying, 'Why buy? Why not just continue to rent? Renting is the easy option.' Obviously, in many cases, banks do not lend money for stamp duty.

In the Riverland and the Mallee, there are many 30 to 40-year-old houses on the market, and a number of those properties have been for an extended period of time. People are being told the stamp duty costs and, as I said, they continue to rent. One thing that I have picked up, particularly in regional areas, is that there are very few houses for rent, because people cannot afford the extension of payment on buying a house when they have to pay stamp duty and all the other associated costs. The result is that we have people who are under increased financial pressure.

Let's face it, it is the Aussie dream to own a house, but these huge financial burdens on top of the house price is something that is turning people away. This is a scenario which we do not want to see continually happening for families looking to purchase homes. Do they continue to rent? Do they move interstate? Do they look at other ways? I know of people who cannot afford to buy a home and cannot find a place to rent, so live in caravans or in tents until they can actually find accommodation. This is too common a theme.

Industry bodies have condemned the government's exorbitant and debilitating stamp duty, and have said that the state government's reliance on stamp duty was incarcerating and blocking potential investment into South Australia. I say that the stamp duty component is just a drug that the government are relying on; they are addicted to this high stamp duty.

When first home owner grants of up to $23,500 ended, we obviously saw the impact on the construction and housing industries. That incentive helped offset the high cost of stamp duty, so where is that incentive now? To look outside the metropolitan Adelaide square, where is the incentive in regional South Australia? Is this about building the pointy end of Adelaide and making sure that the rest of the state is less relevant? We need to build on South Australia's economy by providing affordable housing, particularly in the agricultural sector of regional South Australia, which is the heartland of the economy in this great state. Why isn't there some form of incentive or attraction to purchase a property outside the pointy end of metropolitan Adelaide?

To continue to have a strong housing construction industry in those regional areas there has to be something there to give people a sweetener, to give people some form of comfort that investing outside of the Adelaide metropolitan area is a good incentive, and that the government is prepared to acknowledge that. Housing is obviously one of South Australia's largest industries: it makes up around 40 per cent of the state's generated revenue, around 11 per cent of the gross state product, and represents around 10 per cent of the state's employment.

Government fees on purchasing an established residential home in South Australia are also astronomical and must be reviewed. The transfer fee is just blatant thuggery. In South Australia—and this is relevant to house prices of $300,000—the transfer fee is $2,146. In Victoria, the transfer fee is $873; in Queensland, it is $532; in New South Wales, $214; Western Australia, $210; and in the Northern Territory, it is $137. How do we compare a transfer cost in South Australia of $2,146 to $214 in New South Wales? That is outrageous. That is an addiction that this current state government has to this extra tax burden on trying to buy a house here in South Australia. For the young ones, when dreaming where they would like to go, it reinforces the thought, 'Why here in South Australia?' 'Why do we buy; why not rent?' 'Why don't we move interstate? The cost is cheaper.' As I say, South Australia is a great state, but it is becoming the bleeding obvious that the cost of buying a house in South Australia is burdened with too many taxes and charges.

The Real Estate Institute of South Australia has previously called for first home buyers purchasing at or below the metropolitan median house price to be exempt from paying stamp duty. I wonder if the Treasurer will look at that. Stamp duty also hinders investment and therefore stalls the economy. I do support this bill and I look forward sometime soon to some amendments to give people an incentive to buy a home.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (16:21): Can I first thank all the speakers in the house for indicating their support. I listened to members' contributions intently. I do not think the government charging stamp duty is an addiction, but we have some tough choices to make in the upcoming tax review about how we tax transactions in this state.

The entire country has an identical system for transacting. That is, if you want to enter a property, we tax the duty, the conveyancing, on that property. You are taxed while you hold it, and then someone who wishes to purchase it from you pays a fee as well. We have to ask ourselves, as a growing economy, whether that is the most efficient way of taxing people.

I agree with members that lowering conveyance duties does stimulate the housing property market, but again I caution, if I am shown concrete evidence that cutting stamp duty will generate more growth across the sector and a corresponding hit to the government and therefore the corresponding lowering of services and revenue that we get, what is the bang for our buck that we get?

We know that by targeting first homeowners and targeting apartments we can stimulate one part of the economy. The real question is, if we cut conveyance duty across the board, as some members have articulated, what is the outcome of that? Will we see the entire housing market stimulated and overheated? Will we see that money, those cuts to conveyance duties, reflected in increased property prices, or will we see that benefit go directly to the homeowner? These are difficult questions to be answered, although I believe that when you target a section of the housing construction industry you can make a very big difference.

Members opposite also raised other questions about why we are targeting just the city and not rural areas. That is a very valid point. Why would we not want to stimulate some regional towns to try to consolidate regional communities, to have a higher density so people can get services closer to the centre of town? It is more efficient; it is cheaper to provide those services if people live in close proximity to each other. I point out that some property values are lower in some regional areas, so the stamp duty impost is less, but I accept what members opposite are saying. Again, it is a question of cost and its impact on the budget.

The Deputy Leader of the Opposition talked about the emergency services levy. I remind her that it is a tax that was introduced while she was president of the Liberal Party. It is a tax that was designed and implemented by the former Liberal government, and I heard no complaints from candidate Chapman, or the member for Bragg, at any stage that the Liberal Party had abandoned South Australians by imposing on them a tax on their principal place of residence. Instead, what the formal Liberal government did was introduce a levy which abolished levies on insurance policies to cover emergency services. Every dollar raised by the emergency services levy goes towards our emergency services.

What the Liberal Party did when it was last in office was create a remissions scheme, and that remissions scheme gave the highest remissions to people in rural areas. On top of remissions, there were already factored-in discounts. What the government has done is remove those remissions and allow the discounts to remain in place.

I note that the Deputy Leader of the Opposition is outraged by this tax, but at no stage has she said that if they are successful in 2018 they will reinstate the remissions. I look forward to her actually backing up her outrage with some action. If she is legitimately outraged by this she has two avenues: the first is to contact her colleagues in the commonwealth and ask them to reverse the dramatic cuts to our hospitals, schools and South Australian pensioners, and option two for the Deputy Leader of the Opposition is to announce that if they are successful in 2018 they will immediately reinstate the remissions. Of course, on both those fronts the opposition is silent.

While it is okay to take a swing at me in this debate—she is entitled to do that—I think it is also appropriate that we point out what I think is a flawed argument by the opposition. You cannot claim injustice but offer no solution. That is not a viable political argument. It is probably why members opposite keep on losing elections, because all they do is point out a problem and offer no solution.

The government is doing what it can to try to stimulate activity. I am concerned about the housing construction industry, but I do think there are some very good signs in our economy. The clearance rate at auctions has been very, very good, and there are benefits to extended periods of sunshine in South Australia, with the housing market doing exceptionally well in November and December (we should see those figures come through in Treasury predictions in January and February). I think the clearance rate is very good—speaking to local real estate agents they are telling me that it is an exciting time to be selling or purchasing property—so I will be interested to see what happens.

Of course, ultimately the Premier has announced tax reform. In my view tax reform is best done when you know that it is going to actually mean a decrease in the total tax we take. Making tax reform revenue neutral is very difficult; it can be done, but that is a conversation we are going to have to have with the people of South Australia.

Regarding the map we have chosen, I know the Deputy Leader of the Opposition is calling conspiracy on it, saying that we were trying to campaign in certain seats because she felt that we were trying to take advantage and win those seats. I can give her my assurance that at no time do we take winning the seat of Bragg seriously—

Ms Chapman: You ran a candidate.

The Hon. A. KOUTSANTONIS: Yes, we ran a candidate, because there are people who live in the seat of Bragg who would like to have—

An honourable member: Name them all.

The Hon. A. KOUTSANTONIS: There is a good 35 per cent, I think. What is your margin?

Ms Chapman: A lot more than yours.

The Hon. A. KOUTSANTONIS: What is your margin?

Ms Chapman: I'm not telling you.

The Hon. A. KOUTSANTONIS: I will look it up. I think that argument falls on—

An honourable member: How much money did you spend on the campaign?

The Hon. A. KOUTSANTONIS: Hopefully, none. If we did spend any money in the seat of Bragg I want to find out who did it and sack them. We run marginal seat strategies on this side of the house, and we do not spend money on seats we cannot win.

An honourable member interjecting:

The Hon. A. KOUTSANTONIS: That's right, because we focus on the main game, and, quite frankly, we do not want to lose you. You are one of our secret assets.

We were talking about the maps. There is no perfect line that we can draw on a map that gives the best outcomes. You can shrink this or make it as large as possible. What we are trying to do is make a few decisions about where we want to see higher density living. It makes common sense that if you have a lot of existing infrastructure in place—the north-south corridor, the ring route around the city, the O-Bahn taking nearly 100 buses every hour off that intersection of North Terrace and Park Terrace to try to open up the arteries of the city—then the strategy the government has in place is to try to get as many people as we can living in and around the CBD.

The reason we do that is that there is plenty of infrastructure in place already. We are building a brand-new city school and we are investing in public transport. Of course, this was part of a larger strategy which involved the transport development levy. Unfortunately, members opposite voted against that, which means that a lot of the infrastructure that we would have built to try to move those people to and from their place of work, without forcing them to drive there, will not be built. People who might have wanted to do commerce in the CBD could have freely driven in and utilised those car parks, rather than city workers. Of course, members opposite have been frustrating that because they want to support—

Ms Chapman interjecting:

The Hon. A. KOUTSANTONIS: We want those nurses not to spend money on car parking; we want those nurses to have very cheap travel time and cheap fares on high-quality public transport that is safe, clean and world class. I am just getting the latest figures in from Bragg: 68.8 per cent, so there is a good 30 per cent there who vote Labor. Of course, we run a candidate to make sure that they have a voice; 31.3 in Bragg is a bit high for my liking. What is the swing to lose?—18.8. I would be worried about that.

The DEPUTY SPEAKER: It's doable.

The Hon. A. KOUTSANTONIS: It is doable. A good by-election could do it.

Ms Chapman: Your vote went down when you handed out how-to-votes at the Rose Park Primary School.

The DEPUTY SPEAKER: Are we back on stamp duty? I think we have lurched.

Ms Chapman interjecting:

The Hon. A. KOUTSANTONIS: Yes, the Deputy Leader of the Opposition is right; her seat is a safer Liberal than mine. There is no perfect line in the sand that we can draw. To answer the question from the member for Hammond: yes, contiguous land is available. It was designed to have both sides of the border be eligible for a concession. We took this to the election, so people know what the zoning laws are. People know what height and density we are chasing. We have told them that we are going to incentivise it. We had that conversation with the people—

Mr Pederick: Their blocks have to connect with the road to be contiguous, is what you're saying?

The Hon. A. KOUTSANTONIS: Well, yes. We want people on both sides to be able to take advantage of it. If members opposite think that is a bad idea, they can express that through their democratic rights here.

Mr Pederick interjecting:

The Hon. A. KOUTSANTONIS: I understand. As a growing city, where we cannot make our roads wider, where we cannot increase the footprint of our arterial roads, what we need to do is have high density and try to work out a way to get those people to and from their place of work with as little interruption as possible to the traffic network—that is complicated—and at the same time stimulate growth, stimulate activity and stimulate people who live close to the city. We do not want people being pushed further out south and further out north. Affordability is a very big issue in this country, and it is important that people are able to get affordable housing close to where they live, close to where they grew up and close to where there is existing infrastructure and existing schools.

What we used to do as an area urbanised and people started having children is we built a school, and what would happen is that people would not move out of that area. So we had very good infrastructure in place to cater for young families but, of course, the people living in and around that infrastructure did not have young families. What this enables us to do is to create a renaissance of those inner-city schools, where people can live in higher density and have access to existing infrastructure which we can upgrade, which is cheaper than building on greenfield sites further out north or further out south, not push infrastructure further away from where the higher density population is.

What we do not want to see are these large, vast areas of suburbs where there is no work. We want people close to where there is employment. That is what this bill fundamentally is attempting to do. It is attempting to: (1) give young family homeowners the ability to be able to afford property close to the CBD so that they are not priced out of the market like they are in some other capital cities across Australia; (2) keep the diversity of the people who are living in and around our inner city and make sure they are close to existing infrastructure; and, most importantly, (3) stimulate our building sector. That is why we are doing this.

I know that the building industry is very supportive of this. Do they want more? Of course they do. Do members opposite want us to cut more taxes? Of course they do. Do we want to cut taxes? Of course we do. We always do, but there always has to be a corresponding price and a corresponding cut in service whenever you do something like this or, of course, you reduce your surpluses or increase your deficits.

I commend the bill to the house. I thank members opposite for their support. I understand the opposition has some questions for us in the committee stage, and I hope the bill has a speedy passage through both houses of parliament.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 and 2 passed.

Clause 3.

Ms CHAPMAN: At the time of the announcement of this initiative, which was in October last year, it was estimated that there would be a cost to the government to provide this of some $7 million and this was reiterated again in the Mid-Year Budget Review. How much of that has been lost in revenue so far, or at least to 30 June this year, and is there any update from then as to whether that $7 million is still the expected loss of revenue?

The Hon. A. KOUTSANTONIS: To date, the cost of the concession is about $4 million, but I am advised that we have a contingency in place for a further $3 million. I can get those figures to the house as they come in.

Ms CHAPMAN: That is the information we have so far, but what I am saying is—and this has been going from October 2013 to June 2014, which is part of a financial year—there must be a figure that relates to that. Is that the $4 million or is the $4 million to November?

The Hon. A. KOUTSANTONIS: Are you asking us what we have budgeted for, or are you asking us what we think the take-up will be of the option in the extended zone?

Ms CHAPMAN: No, I am just talking about the money at this point. You announced it in October last year, so for the part year of October to June this year, which is a part of a financial year, there must be an identified amount that you have actually missed out on. Is that the $4 million or is it the $4 million up until November that is forgone?

Bear in mind that my understanding of this scheme is that it was a $20,000-odd benefit for the first period and then for the next two years, up until 2014-16, it is actually only a partial benefit that one gets. I am assuming that that explains why it would be a big up-front amount that people have gone in and applied for and that has been at a cost to the government. Is the $4 million effectively to 30 June this year or is it to November?

The Hon. A. KOUTSANTONIS: The advice I have is that that figure of $4 million is up until 7 November. That is the advice I have.

Ms CHAPMAN: Is it still your estimate that the total amount, on the basis that there is a reduction of available amount per dwelling, will still be around $7 million?

The Hon. A. KOUTSANTONIS: The advice I have is yes but, of course, that is subject to change. We do not know how many people will take this up, for example, depending on fluctuations of the rest of the market and what is happening with other types of properties. So, there is a lot of guesswork involved here.

What I will attempt to do between the houses, for the benefit of the Deputy Leader of the Opposition, is to get some further advice from RevenueSA, so that I do not give you arbitrary numbers here, and try to give you our best estimate of what we think it may go up to or whether it will make costs. Ultimately, what we are attempting here is not so much to try to meet a budget figure; we are trying to stimulate activity.

Ms CHAPMAN: I appreciate that, and I will come to that aspect. I thank the Treasurer for indicating that he will make that available. Can we go to certain assets that are within the zone? First, the site at Bowden, which is otherwise known as Bowden Village, under the management of Renewal SA as an asset of the government, which is in the process of developing: what is the total value of concessions that has been made available for sales on that property since the inception?

The Hon. A. KOUTSANTONIS: We do not have that figure here. From memory, I remember attending a debate, when I was housing and urban development minister, with the Deputy Leader of the Opposition, when she spoke of our competing with the private sector. I think that I know where the member is going with this, but I will endeavour to get the member those figures between the houses; I just do not have them here.

When you have these large blocks of land, whether it be the Tonsley site or the Bowden site, the government does play a role in trying to develop that land. Are we seeking a financial return? Yes, we are. But, more importantly, what we are seeking is a demographic change to try to encourage people to live closer to infrastructure and higher-density living, with higher energy ratings, experimental types of building, experimental types of energy efficiency, to try to encourage and incentivise new industries, and there are some in the sector who do not like it when a government locks up, in their mind, parts of that land.

I suppose the question we will never know the answer to is: what would have happened to that land had the government not developed it? What would it have been had we not intervened and encouraged and, indeed, directed a type of development? What would we have there now: would it be industry, would it be residential? Yes, we can control all of that, but the government has attempted to get an outcome, but it is, of course, trying to get a return. That is why we are making these concessions available to the private sector on a much broader footprint.

We are not just saying that it is just our land; we are expanding it so that other people who have private property can indeed take full advantage of it. Gilberton, the old Channel 7 site, is a very good example of that. They were not initially in the zone; now they are, and of course we have expanded it even further. We are doing our best to try to incentivise private owners and private development as well. I think I know what the Deputy Leader of the Opposition is attempting to do, and I will get her those figures between the houses so that she has an exact number.

Ms CHAPMAN: While we are on 45 Park Terrace, Gilberton, which is the second site which has special significance in this program of concessions, can you advise the committee how much has been provided in the concessions for sales of property at that site? Again, I appreciate that you may not have it with you, but can that be provided between the houses in writing?

The Hon. A. KOUTSANTONIS: Yes, I will provide that between the houses.

Ms CHAPMAN: Can you tell the committee what the basis was for adding 45 Park Terrace, Gilberton, which, as we know, is a private development, and not others?

The Hon. A. KOUTSANTONIS: Madam Chair, that is not before the house, but I will give the member an overview. I am not sure that I was the minister responsible for it at the time of that decision, but what I suspect was occurring is that there was a spine down the middle of the city, and we should not have allowed one development at one end to be disadvantaged by a development at the other end.

I think the decision process at the time—and I am at a disadvantage because I am not sure I was even in the room when the decision was taken, but I will have to check—was that we had Bowden at one end, a whole series of infrastructure programs going on between the NRAH site right up through to the universities past the Casino, past the Festival Centre, going right up to Gilberton, and why would you not include two developments at the end of it to try to encourage this sort of spine development. That is what I think the thinking was, but I would have to find out for you because I was not the minister responsible at the time—I think.

Ms CHAPMAN: It is just that outside of the then boundary, which is now being incorporated in this but expanded, as we know, they were the only two sites outside of metropolitan Adelaide as such—City Living. You may be able to clarify this, but there appears to have been no inquiry, invitation or offer to have an expression of interest from any other developer on the peripheral area of Adelaide, in the west, south or east, as to whether they might want to be incorporated, and, of course, correspondingly, nothing was included for relief in that regard.

I appreciate you taking it out again now that we have another new boundary, which, on the face of it, just looking at the map, does not appear to particularly go around any little site as the other one did, but I would like to have some understanding of the opportunity that was given to any other developer outside of the ring or, indeed, whether there has been any invitation on the current boundary for anyone else, or any basis upon which the boundary is currently drawn, or whether it was just simply followed that in a metro boundary it is as per the planning laws.

The Hon. A. KOUTSANTONIS: It think it probably was about the maturity of the developments at that time. Bowden and Gilberton were quite advanced in terms of sales and planning. What the government, I am advised, was attempting to do was that there were two developments that looked as if they could have been disadvantaged by the previous economic climate. Whether any other developers were spoken to about their area or their development, I am sorry, I cannot give any light to that other than to say that I do not think there were any other developments nearby in that precinct that stood out, but I will go back and check, but I cannot remember.

The important thing here—and this goes back to the Deputy Leader of the Opposition's initial complaint—is whether we are just favouring a government development. I cannot speak for the former minister for housing and urban development (Hon. Pat Conlon), but I am assuming that what he was attempting to do was to say, 'We cannot disadvantage one government development. There's another private development that is almost in exactly the same position but at the other end of town; it would only be fair.' That is what I am guessing happened. I do not know what other discussions were taking place with other developers.

I do not know what other developers were doing at the time, but to deal with all of that we have now expanded the zone quite dramatically to go from Regency Road and, indeed, all of the City of Prospect council boundary right through to Cross Road. So there is ample opportunity for developers there, and, of course, from the eastern suburbs, from Portrush Road and Lower Portrush Road right through to Hampstead Road right through to Holbrooks Road and Marion Road in my electorate.

We dramatically expanded the footprint to make sure that, first, it takes into account a large number of existing developments that are already on the books to try to incentivise them and get to the next stage; and, secondly, to encourage all those people who are sitting on a property, and unfortunately in Adelaide—and my father is as guilty of this as everyone else—people buy a piece of land and do not touch it ever again. My father's property can be given only to my daughter. He will not let me anywhere near it and he will not let my brother anywhere near it; it is for his grandchildren.

I understand that, but, with the imperative that the state has, we want those properties developed now. We want activity now, we want those houses built up with higher-density living, we want them turned over and we want people transacting. That is why we have increased this zone to take in a larger area. It is a valid question the deputy leader is asking. I do not know the answer to it, because it was probably pre my time, but I have to say, looking at it now, it makes intuitive sense that you would not just benefit the one government operation, you would benefit the private one as well.

Ms CHAPMAN: Have any other parties or councils made an application since the announcement for the stamp duty relief for other areas in South Australia, either regional or metropolitan?

The Hon. A. KOUTSANTONIS: I have just heard the member for Hammond call for one in his electorate. I heard the member for Chaffey call for one in his. I am sure every member would like one. I am sure the member for Giles would like to have stamp duty relief in the City of Whyalla and Coober Pedy. I am sure the member for Reynell would like to have more in her community. I do not know whether there have been any unsolicited proposals put to government on this or whether there has been any other correspondence. I assume there has been. I do not have that information with me, but it would not surprise me. If I was mayor of a council outside this area, I would say, 'Me too, please'—of course they would. But the government has limited resources and we have tried to choose a boundary which we think makes economic sense. I will try to find out for the member and get back to her.

Ms CHAPMAN: Have you done any assessment of the applications that you have granted to date as to the value of sales they have generated as a result of this initiative? That is, rather than just the cold facts of how many might have been sold within that zone, what has been sold as a result of this initiative being offered as at least a factor in the purchase.

The Hon. A. KOUTSANTONIS: Very good question. I am very interested in the answer to it as well, because in the scheme of tax reform I really want to know what the impacts are for this incentive. From the discussions I have had, it is still too early to get any accurate details that make any meaningful sense about what the impacts of it are. I can give you raw numbers about how many people have taken it up, etc., but we will do a deeper dive as this process rolls out to try to understand exactly what type of developments we are stimulating: who are the people buying these homes, where do they work, what are their education levels? We will do a bigger assessment later.

I suspect that will take probably a bit of work from the tax review, because what I want to know as Treasurer is very simple: out of all the levers I have—payroll tax, land tax, stamp duty, and any other transactional taxes and levies on insurance policies—which one of those levers would for me as Treasurer (1) generate the most economic activity, (2) give me the most stable form of revenue and income to the state, and (3) give people the ability to transact and maintain a level of profitability? I am just as interested in that question as the deputy leader of the opposition. I think it is a very smart question and when I find out the answer I will share it with her.

Ms CHAPMAN: Is that assessment happening at present? My understanding is that, of the $4 million odd that has been provided in concessions to date (in other words, money forgone in stamp duty), that is as a result of some 260 applications. So, you have the raw data. I appreciate that you do not have the answers yet, but is anyone actually assessing this? We have now moved out of the big incentive period, we have smaller incentives tapering off in the next couple of years, and surely that October to June period would be identified as the most effective in identifying benefit.

I appreciate the economic benefit for the building industry, but we are really talking about residential housing here, and it may be for an investment purpose. I just want to know at this point whether any of that modelling and assessment has actually been undertaken yet or whether you are interested to find out.

The Hon. A. KOUTSANTONIS: No, that work has not commenced, but we do collect the data so we can begin that work at any time. The reality is that the government's tools are very blunt. I know exactly what the Deputy Leader of the Opposition—I think I know what she is thinking.

Ms Chapman interjecting:

The Hon. A. KOUTSANTONIS: Yes. I suppose, in a broader sense, the more information we find out about this is a very useful tool for the government to have, and the data is not going anywhere any time soon, so we can always do it.

I suppose the next question is: once you have that information, what do you do with it and how can you better target tax concessions and can we legally actually do it? The question then is: rather than linking the tax concession to the physical property, the other way we could do it is why don't you link the tax concession to the individual? Why don't you link it to a demographic? Do you link it to an age group? Do you link it to a professional cohort? How do you offer these tax concessions? Obviously, there are some legal issues about how you do it but the government's tools are fairly blunt. I am just as eager as the Deputy Leader of the Opposition to get that work started. Like I said to her in my answer, I would like an analysis to begin once we begin the tax review.

Ms Chapman: That's going to be years away.

The Hon. A. KOUTSANTONIS: No, the tax reform is not years away. The government's term is four years. We are now in November. I am very keen to get my skates on.

Ms CHAPMAN: Unless somebody does the work to review this, it is not going to provide any information which you will be able to use for the assessment of your reform in relation to taxation overall. I am really just asking when your department is going to get started on that aspect? Is it going to be in this financial year? When is it going to happen? You are the minister and you tell me you are keen to get an answer. You have got the data. We have gone past 30 June now. It just seems somebody needs to action it. If you are keen to get it, you are the minister, I would have thought somebody would be opening a file now. My question is: do you expect to have that material, that is, the answer of any assessment or review of the effectiveness of this program, this calendar year or in this financial year?

The Hon. A. KOUTSANTONIS: I cannot answer that question accurately for the deputy leader. I am not trying to be frustrating. It is just that I need to take a bigger view. This is only one tool in my arsenal. This is only one form of tax cut that we have offered. We have offered other tax cuts. We have offered payroll tax cuts, for example. Those payroll tax cuts that we have offered have also had an impact. I want to do an assessment of all the measures that we have done thus far to see what their impacts are. But, yes, I agree with the Deputy Leader of the Opposition that the sooner we begin, the better.

Clause passed.

Remaining clause (4) and title passed.

Bill reported without amendment.

Third Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (16:58): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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