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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
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Bills

Land Tax (Miscellaneous) Amendment Bill

Second Reading

Debate resumed.

Mr DULUK (Waite) (19:30): Today, I also rise to speak to the Land Tax (Miscellaneous) Amendment Bill.

Members interjecting:

Mr DULUK: Sir, please, I have barely started and look at them going at me already.

The SPEAKER: Order! The member for Waite has the call.

Mr DULUK: Sir, as you know, in the lead-up to the state election, our side—the Marshall team—said that it would be a reformist government, and I think in many senses we have continued down that very path. We said that we would bring a reformist agenda to government, one that is focused on the economy, one that is focused on creating jobs, which I know those opposite are so interested in, yet when we have good job statistics, as we recently had the other day, they do not celebrate them. In fact, they do not like good stats because it takes away their ability to counter—

Mr Malinauskas interjecting:

The SPEAKER: Leader of the Opposition!

Mr DULUK: —their poisonous attitude in their conversation with the people of South Australia.

The SPEAKER: Member for Waite, be seated for one moment. The Leader of the Opposition spoke to this part of the second reading speech unhindered pretty much. It was pretty good behaviour from the government side, and I ask the Leader of the Opposition to return the favour to the member for Waite.

Mr DULUK: Thank you so much, sir, for your protection. As you know, they hate good news. They hate it that job numbers are—

Members interjecting:

The SPEAKER: Order, member for West Torrens!

Mr DULUK: —positive for South Australia, as they were most recently. They hate that we are out there creating jobs, which we are. They hate it that we are out there reforming the VET sector and the TAFE sector, as the Minister for Education is doing, putting money back into the system, investing in jobs. They hate that. They hate good news.

We have had 16 years of Labor here in South Australia and we need to reform, and land tax is part of that reform we need to undertake. That is why we want to deliver tangible benefits to South Australians. We made a commitment to the people that we would lower taxes and other costs—and we are doing that. We have abolished payroll tax for so many small businesses in South Australia. Do those opposite thank us for that? No, it is something they never did, something they did not want to do. They do not like people who employ people. They only like the unions. That is what the Labor Party is in for.

We have put back the remissions on ESL and returned cost-of-living savings to households across South Australia. We remain committed to capping council rates, reducing electricity prices and cutting water bills, but there is plenty more to do and, as part of that, far-reaching land tax reform is very important. Major reform is never easy. It is not even popular and it is often controversial. However, that does not mean that we should take the easy road, as it says in the Good Book. We have an opportunity for true economic reform—

The Hon. A. Koutsantonis interjecting:

The SPEAKER: The member for West Torrens is called to order.

Mr DULUK: —reform that will benefit South Australia's economy, reform that will benefit businesses large and small, reform that importantly will actually support mum-and-dad investors and, ultimately, reform that will benefit the community. Governments must have adequate revenue to provide essential services, but I believe in growing that pie—

The Hon. A. Koutsantonis interjecting:

The SPEAKER: Member for West Torrens!

Mr DULUK: —to provide those essential services, rather than increasing taxes to deliver those essential services or privatising government assets, such as the Motor Accident Commission, which goes straight into general revenue, or ForestrySA, which goes straight into general revenue—which those opposite did so easily in their last term of government.

True economic reform will achieve this important end. I appreciate that there are many voices in the debate on the nature of the reforms that we should pursue, but there is one thing that has unanimous support—that is, urgent reform is necessary to send a clear message that South Australia is open for business, that South Australia is indeed the best place in the nation to invest in property and that South Australia is the best place to run a business large or small.

As we seek to grow our economy and repair 16 years of Labor mismanagement, the stakes are too high for any missteps. There is no doubt that the proposed land tax aggregation changes have caused significant angst and uncertainty amongst the community. I am the first to admit that the land tax journey to this place since the state budget announcement has not been an easy one and I, too, was an early critic of the process undertaken. At this point, I would like to thank the many constituents who have contacted my office, as indeed they have yours, sir. I include industry bodies such as the MTA, the UDAA and the MBA—

The Hon. A. Koutsantonis: UDIA.

Mr DULUK: —UDIA—who have contacted me seeking a better overall land tax reform package. I acknowledge many of their concerns. I know that the bill before us that we are debating this week and the additional amendments proposed yesterday by the Treasurer seek to address many of the concerns raised about thresholds, rates and trust aggregation. I am glad to see that we are proposing to adopt a more Victorian aggregation system as opposed to a Queensland one and also a provision where companies that act in a development capacity are treated as trusts in their proposals.

We must not lose sight of our objective to create a competitive advantage over other states. This was certainly the mantra when Sir Thomas Playford was premier of South Australia: to make South Australia a low-cost jurisdiction. It is something that South Australia has lacked since the Bannon Labor disaster of the State Bank. I know that members opposite do not like to talk about the State Bank disaster.

Members interjecting:

The SPEAKER: Order!

Mr DULUK: Since the State Bank disaster, this state has not enjoyed a competitive advantage in almost any industry, especially in state-based taxation across the nation, mainly due to the monumental catastrophic devastation that the State Bank had on South Australia so that it was unable to grow over that period of time. When it comes to tax policy, I really think that South Australia has been too dependent on the other states. We have been too dependent on grants from the commonwealth, and this needs to change.

We need to grow our pie in South Australia. We need to grow our economy and grow jobs. I know that this government is committed to growing jobs: Labor only pay lip service to jobs growth. We need to grow the pie so that we can become a competitive, low state tax jurisdiction. Sir, I am driven, as I know you are, by conservative principles that lower taxes give us a competitive advantage so that we can grow our economy. I want South Australia to be known as a state with a fair and competitive tax system, a state that is an attractive place in which to invest and live.

For South Australia to achieve its population and economic growth targets, we must make sure that there is a competitive advantage relative to other states in terms of affordable housing, and we must also ensure that the tax burden is not disproportionately applied across the community. We must strive to achieve a fair and equitable system. South Australia's existing land tax regime is unfair and broken.

What we are really dealing with now are the so-called reforms of former treasurer Foley. The member for West Torrens was in the parliament and the government at that time and presided over the mess we have today. When he was treasurer in the former Labor government, he did nothing to fix this land tax mess we are in. He sits there, and he has been the best friend—

Members interjecting:

Mr DULUK: —of the Property Council for the last six months.

The SPEAKER: Order! The member for Finniss gesticulates. I ask the member for Waite to cease provoking the opposition, and I ask the opposition not to respond to that provocation.

Mr DULUK: Sir, as you know, the member for West Torrens served Her Majesty diligently as treasurer in the former Labor government. In that time, he did not once seek to reform land tax, but we are doing it. This government, the Marshall Liberal government, is doing it. We all know that, across South Australia, a top marginal rate of 3.7 per cent is too high and uncompetitive. Those opposite who do not want to support this bill are basically saying that it is okay to have a top land tax rate of 3.7 per cent.

Members interjecting:

The SPEAKER: Order! Member for Playford, be quiet!

Mr DULUK: If Labor oppose, they are saying, 'We want the highest land tax rates in the country.' They want the highest land tax rates in the country. It is unfair that South Australian investors pay the highest top marginal land tax rate in the nation. Land tax should be as broad as possible and as flat as possible. It is important that land held for investment purposes is treated the same from a tax perspective no matter what the ownership structure is. I think that is so important.

If we do not get it right, we will turn away investment and we will stifle economic growth. So the changes we are proposing—looking at lowering rates over time, looking at increasing tax-free thresholds—will help investors in South Australia and tell people that we are open for business. For years, investors have preferred to place their money in other states because of our historic 3.7 per cent top rate of tax. Over time, I believe we must also look further to reform the thresholds and rates paid for rateable land between the $755,000 mark and $1.1 million. It is important that we further lower the rate in that bracket.

The top tax rate must be reduced. We must release that handbrake on investment. The legislation before us aims to create a fairer land tax regime than the current arrangements. These changes will result in a lower tax burden for more South Australians. These changes will also result in a fairer tax burden on South Australians. The payment of tax should be equal; it should not be based on how you structure your investment. But investment should not be a dirty word; in fact, investment should be encouraged.

We should not view the holding of an investment portfolio, whether it is one property or many, as a negative thing. We should not be singling out property investors, many of whom come from multicultural communities, and bemoaning their hard work, risk taking and resourcefulness. Property investors are not only key cogs in keeping our economy moving but they are essential to our economic growth and prosperity. They underpin our residential rental market and are an important source of rental stock. They are an important driver of residential real estate prices. A flatter, broader tax system is essential to providing incentive and reward to those who take risks. A tax system that makes lawyers superfluous to investment decisions is important.

The Hon. V.A. Chapman interjecting:

Mr DULUK: I apologise to the Deputy Premier for that. A tax system that is world's best practice, a tax system that encourages investment in residential and commercial real estate, and the positive flow-on effects this activity would bring would be of enormous benefit to our economy.

Middle-tier investors should not be disproportionately affected by changes in comparison with smaller investors and the big end of town, and vice versa. Investors should not be disproportionately affected by the approach they take to structuring their investments. Government, industry and investors all agree: reform is essential, but we must reform land tax with a positive impact. Too few have carried the large land tax burden in South Australia for too long. It is time we pursued a pathway of reform that reduces red tape, is easy to understand and is economically more efficient.

I welcome the amendments as flagged by the Treasurer yesterday that see a further flattening of the land tax rate with a new 2 per cent threshold, which sits at $1.1 million at the moment and ultimately increases to $1.6 million by 2023-24. I am pleased to see that self-managed super funds are exempt from land tax and, of course, that the primary residence is exempt from land tax. I know that members opposite would love to charge land tax on the primary residence.

It is actually in the DNA of those who love the politics of envy, which is the Australian Labor Party, to talk about taxing the family home. That is what they want to do. I know that that is what the member for West Torrens has previously floated when he was on this side of the house. The member for Enfield shakes her head, but she knows that that is what the Labor Party wants to do to her constituents as well, and that is put a land tax on the primary home.

I am more comfortable with the trust surcharge aggregation provisions than those first announced, but I note that caution should used in the implementation of these provisions, ensuring that those who legitimately use trust structures are given time to transition under the new rules and are also aware of their obligations in regard to beneficiary nominations. I urge Treasury to proceed with caution as they go about implementing this new regime, should the bill pass the house.

I also welcome the legislated independent review of these land tax changes in 2023, and I hope an independent review will call for further reductions in land tax. If I could finish with a few words of caution, any scope in the budget to fast track these tax cuts must be utilised, and of course there is the Mid-Year Budget Review coming up later this year. The drawn out debate over land tax reform this year, I believe, has impacted to a certain extent market and investor confidence. I encourage my colleagues to remember the Marshall Liberal team's commitment to an open, transparent and accountable government.

The development industry and those who are developers play a vital role in housing affordability and jobs. Land tax reform should respect the contribution this sector makes to the South Australian economy. The current statewide revaluation being undertaken by the Valuer-General began under the former Labor government, which they hardly ever mention in dispatches. But the process by the independent Valuer-General, which began—

The Hon. A. Koutsantonis interjecting:

The SPEAKER: Order!

Mr DULUK: —when the member for West Torrens was treasurer, may have a significant impact on the tax burden for all property owners. Investors may reach a tipping point in a concurrent process of land tax reform, if not managed carefully. We should not and we must not adopt a system that discourages multiple residential and commercial ownership in this state.

As we move forward with this legislation, we must tread carefully to avoid any unnecessary damage to the property sector and the state economy. To this end, I encourage my colleagues, the Treasurer and the Premier to work with key stakeholders to navigate our government's challenging reform agenda to ensure we deliver the best outcome for our state and for all South Australians. Anything less than that risks taking a wrecking ball to the economy.

The Hon. A. KOUTSANTONIS (West Torrens) (19:45): And with that, we see the complete capitulation of the financial conservatives to the wet moderates of the party. With that, we see the humiliation of the member for Waite, who went on radio not three weeks ago lauding initial changes that the Premier had made saying that these had gone far enough, only to be humiliated when the Treasurer had in his pocket further room to move, and this is the point I make in my remarks today. How irrelevant is the Liberal Party backbench? How irrelevant are they?

It takes someone who is not even in the party room to call a meeting with the Treasurer on the weekend, despite what we were told by the Premier to this house that there was unanimous support for the original land tax measure that the parliament was going to be considering today before the amendments were proposed. Members opposite were removed from deliberations, and Daniel Gannon and Steve Maras were brought into the tent, the Treasurer heard their concerns and they acquiesced to his amendments.

If you are a Liberal member in a marginal seat and you see the Treasurer meeting with people who are not in this room—despite, I suspect, some members making concerns known to the executive and the cabinet and being ignored—how irrelevant are Liberal backbenchers that their views are not taken seriously, that their views are not heard or taken up by the cabinet, but someone like Daniel Gannon's are?

How irrelevant is the former mayor of Holdfast Bay? How irrelevant is the member for Newland? How irrelevant is the Government Whip or a former lawyer or a dairy farmer? How irrelevant is the member for Waite? All their concerns—dare I say it, Mr Speaker, even the Presiding Officer's of this house—are not listened to and are ignored. They are not taken seriously.

I do not believe that any member of this current Liberal government will vote against these measures. I believe they all wholeheartedly support aggregation of properties in land tax. I think that they think it is a rort. I think that they think that people who have bought properties in different ownership structures are tax cheats. I think that they think that they should be taxed more, and that is why this measure is here today, and that is why all of them, every single one of them, is voting for this, including you, Mr Speaker.

All of you support this measure. All of you support aggregating all properties, regardless of the legal instruments that were available to people before this. All of those opposite support retrospective tax changes to arrangements made in the ownership of property. All of them. Every single one of them. Not one today will get up and say that they are reserving the right to cross the floor. Not one will speak for the mum-and-dad investor. Not one will speak for someone who has gone without to build a property portfolio. Every single one of them will vote for this Premier's attack on aspiration—every single one of them.

Ask Timothy Goh what happens to you if you dare to oppose them, if you dare to stand up to the Liberal Party. What happens if you attempt to say that what they are doing is unfair or unjust? Well, they will parade your acquired wealth on the front page of a paper, they will attack you as being aspirational, they will attack you as being rich or, even worse, call you a rorter.

Imagine the Labor Party holding these forums and hearing from a wide range of people about their concerns about land tax. The one thing that struck me at all these forums was the consistent theme that came up from a lot of people. Without being accused of being a misogynist, overwhelmingly it was from men. Overwhelmingly it was from blue-collar working men, who said the same thing over and over again to me: 'I missed out on going to my kid's sport. I'm not as close to my children as my wife is. I'm not as close to my family as others are because I worked weekends. I wasn't home. I worked two jobs. Why? To pay off the mortgage or the borrowing costs of the second, third, fourth or fifth property. Now I am being told by a party that I have voted for my entire adult life that it was for nothing. On top of that, they imply that I am a tax cheat, that it is a rort, that I have somehow done something wrong.'

Now that person is turning to a party that they have never voted for, that they have never seen as their ally, as their only hope, because the member for Elder, the member for Newland, the member for Adelaide, the member for Morphett and the member for Colton will not support them. The member for King is oblivious to all this, but the other members know what they are doing. They are ending what they think is a rort. They think that people who have the intelligence to establish trusts because they want to protect their assets are somehow rorters. That is what the Liberal Party is telling them.

I do not believe that there is a single person in the Liberal Party who does not agree with the Premier, because all the lecturing we receive in this parliament and outside this building from Liberal members is, 'We are free to vote as we please in the Liberal Party and not be expelled.' Well, we will see it in this vote. All of them, every single one of them, will be there sitting alongside their Premier, voting for these reforms. Why? Because they believe it. They think it is the right thing to do—every single one of them. I can see the member for Heysen nodding in agreement. He thinks it is a great idea. He thinks people who have disaggregated their properties through trusts are tax cheats and they should be taxed the same way or have all their properties aggregated to increase their holdings.

Imagine being a Liberal backbencher who made complaints to the Treasurer on behalf of their constituents being ignored, seeing this backflip yesterday. I will go so far as to say that not one Liberal backbencher knew that the Property Council were in discussions with the Treasurer over the weekend—not one. I will go so far as to say that a majority of the cabinet did not know. They were out there on weekends at street corner meetings telling their constituents, 'No, no, this is the right thing to do. The Premier has given us the best package we can have,' and meanwhile the Treasurer was having secret meetings to undermine them.

How impotent would they feel that the Premier has done this to them? Yet members will walk in here and they will all vote the same way without any remorse or any fear that they are doing the wrong thing. All of them think this is the right thing to do, because we are constantly told by them that if they disagree with the government they are entitled to vote against it—so no doubt there will be some who cross the floor. Of course there will not be, not one.

The member for Waite, the Premier, the Treasurer, the Deputy Premier, the default treasurer, the aspirant to the role, have all told us that 92 per cent of people will be better off. Yet for some reason my Facebook page, my Twitter account, my email, constituents walking into my office, at the supermarket, everywhere I go I am being stopped by people telling me that aggregation is a disaster. So someone is lying. Someone is not telling the truth.

The Premier today told the house, in front of all of us, that this bill we are debating now is a net cost to the government. That is not true. The bill we are debating now raises more revenue for the government. That is indisputable. This bill raises more money, with the amendments, for the government than they currently collect with the land tax reforms they made last year. That is indisputable, yet the Premier and members opposite are attempting to foist onto the people of South Australia something they well know is untrue: that aggregation will not increase their costs.

That is a lie. Aggregation will increase the cost of investing in property, yet members opposite, knowing that, are still voting for it because they think it is a rort. I look forward to those members, who have lifelong commitments to the Liberal Party, who all swear an oath to the altar of the free market and aspiration, explaining why they think it is a rort. Someone has structured all their investments in different structures and it is completely legal; there is nothing illegal about it, yet members opposite say it is a rort. What a joke.

There is also the point to be made of the dishonesty of this measure. The Treasurer and the Premier said before the election, when they were the shadow treasurer and the opposition leader, that they were going to take an axe to land tax. There is no mandate for this bill. There is no mandate for this tax increase. The Liberal Party never said once in any of its information—indeed not a single member opposite who was on the backbench and not in the cabinet knew before the budget was delivered—that the government was planning an aggregation measure in the budget. They found out about it on budget day after the cabinet had approved it. It was not taken to the election.

On this side of the house, we took the transport development levy, otherwise known as the car park tax, to the election. We won the election and members opposite still voted against it. Yet here they are using their majority, built on a lie that they would lower land tax, to increase land tax. They want to use the numbers they achieved at the last election to try to achieve that result. There is a word for that type of behaviour, but we are in decent company so I will not repeat it.

I also heard the remarks made by the member for Hammond about equality. Well, let's talk about equality. Let's say, for example, that we have a commercial venture in Murray Bridge. That commercial venture on a commercial property is subject to land tax. Down the road on a farm they are not subject to land tax. I say to the farming community of regional South Australia that if the Liberal Party today is prepared to come after people who have made arrangements that are legal, to aggregate properties and increase land tax on commercial holdings, why not farmers next? Why won't Steven Marshall, the Premier, the deputy leader, come after the family farm next? It is a commercial venture; why not charge them land tax? It flows.

An honourable member: What about equity, fairness?

The Hon. A. KOUTSANTONIS: It is all about fairness, member for Hammond. You cannot have one cohort of people owning commercial property paying one rate and others not. Why not farmers? The Liberal Party's next target will be the family farm, and if the farming community, the regional members, cannot stand up to the Premier now, why does anyone in regional South Australia think that they will be able to stand up to them in the lead-up to another election or after an election for increasing land tax or placing land tax on the family farm?

What is the argument against it? If you are prepared to do it to someone who owns a service station, a mechanic shop, a GP practice, a delicatessen or residential properties, why would you not do it to a farmer? The Liberal Party here has no credibility anymore. None. The marginal members, who know exactly what they are doing to end what they call a rort, are hurting people who have voted for them their entire lives. Those people are feeling damaged and they are feeling betrayed.

I want to get to the cultural issue of this measure. There are many people in my community, who I would call postwar migrants, whose first language was something other than English. They did not want to be a burden on the state. They worked hard in factories, they worked hard on farms, they worked hard in their own businesses or for someone else and they invested in property. It is something they understood, it is something that did not require language skills and it is something that they thought would be safe. They view these changes as a cultural attack. They view these changes as a cohort of the elite turning on them.

Imagine how you would feel if you were a postwar migrant and you bought four properties under four different trusts because you have four children and you want to make sure that you protect your property for the next generation, after having seen the campaign against franking credits with the entire country and the Liberal Party elite standing up for those who invest in shares, yet when it comes to investing in property members opposite call them rorters. Getting franking credits for tax that has already been paid: legitimate. Paying land tax on disaggregated properties: rort. That is what the Liberal Party is saying to these people.

The Labor Party is saying to these people, 'You have a home with us. We agree. You are being treated unfairly by a Premier who has lost touch in less than 18 months. You are being treated unfairly by a party that does not understand the aspirations of ordinary people, does not understand the cultural issues of people who have gone out and bought a property and want to leave it to their children, will not ever recognise the capital growth in their property, rely on the yield from the property as their retirement and are ineligible for pensions because they own those properties but cannot sell them for cultural issues.' The Liberal Party calls them tax cheats. How do you sleep at night? How do Liberal members of parliament who rely on these people's votes in Hartley, Morialta, Dunstan, Morphett, Colton and Adelaide sleep at night, knowing that these people put their trust in you and members opposite have betrayed them?

If the Liberal Party had any decency they would take this to an election. They would say, 'We will change the date of operation to 1 July 2022 and let the people decide.' But they are cowards, they will not do it, they are afraid of the people. They are hoping that members in the upper house block this because none of them have the courage to stop their Treasurer or their Premier, none of them have the fortitude to stand up for the battlers, and now here we are trying to stop debate because the deputy leader has sold out working people.

The SPEAKER: Member for West Torrens, there is a point of order.

The Hon. V.A. CHAPMAN: There is a level of robust debate, but this is personally offensive that he should be bullying and attempting to bully members into their voting situation. I ask that the member get back to the substance of the debate and not his offensive remarks in relation to the members opposite.

The SPEAKER: I have allowed the member for West Torrens to enter into debate in quite a robust fashion. I do note he is starting to go near reflections on members to a level that is probably not where I would like it to be, so I caution the member for West Torrens for the remaining time that he has left.

The Hon. A. KOUTSANTONIS: Doesn't that point of order say it all? Doesn't it say it all, Mr Speaker? Anyone who dares to question the brilliance of the Liberal Party is somehow a thug, a bully, a misogynist or something else. Here we are again: don't you dare stand up to the genius of those who want to fix this rort on land tax that members say it is. It is not a rort. It is not a rort at all.

People have worked hard. They have bought their assets and they have paid for them. They have worked hard and gone without. They have not gone on holidays to Spain and they have not gone on holidays and stayed at resorts: they have gone without. They have not bought their second, third and fourth cars: they went without. They went with one fridge and one TV to try to build their wealth. They came to a country looking for something different that they did not have in postwar Europe.

Other investors who have worked hard have done this country a service by investing, and they offer a service to people who cannot afford to buy their own properties by having a robust rental market. The Liberal Party has sold them out. Tom Playford's portrait is here for a reason. He looks down on all our deliberations. I note that there are no Labor luminaries looking down in here: not Don Dunstan, not Mike Rann and not Jay Weatherill—none of them, not even the first Labor premier anywhere in the world. But there are Liberal premiers up here, looking down, arguing for a free market and arguing for aspiration. What have they got? They have the member for Dunstan and the member for Bragg. That is the best the modern Liberal Party can do.

What do they do? They are going to tax their way to prosperity. When has that ever worked? Never. The Liberal Party are making a strategic error here. They are hurting their base. Their base are turning to us, and we are ready to receive them with open arms.

Members interjecting:

The SPEAKER: Order! The member for Playford has the call.

Mr BROWN (Playford) (20:06): As difficult as it is to follow the robustness of the member for West Torrens, I shall attempt to make some contribution to this bill. I rise to express my opposition to this piece of legislation. In 2017, the then opposition leader, now the Premier, promised that 'a Liberal government will not impose sudden and discriminatory tax changes'. Well, it has taken the Premier 120 days to finally bring this bill to the parliament, so you cannot call it 'sudden', but this delay has no doubt been due to the extraordinary backlash from business, the public and a backbench built on very shaky foundations.

This is the result of the Premier and the Treasurer going back to the drawing board on their so-called land tax reform, not once, not twice, not three or four times but five times, by our count, to finally get this bill before this house. What could they have been doing in this time when they have been frantically redrafting their land tax reform? Could it be consulting the public? No. Could it be seeking advice from their backbench? Absolutely not. They were busy shouting down any opponents to these measures that they could find.

Who can forget the shameless way in which Dr Timothy Goh, a Liberal donor and supporter, was harassed by the very movement he has been so faithful to for all these years? I think it is worth bringing to the attention of the house an article that appeared in The Australian newspaper. The headline almost says it all: 'Bentley-driving dental surgeon at eye of Lib tax reform storm'. The article is by David Penberthy, who is a journalist of some note in South Australia. It says:

A dental surgeon with a passion for luxury cars has been thrust into the war between the South Australian Liberal government and its traditional conservative supporters over land tax reforms.

Despite attempts by Premier Steven Marshall this week to sell his compromise land tax package, which slashes the top rate but keeps a controversial blitz on the use of trusts to minimise tax bills, relations between the government and investors have hit a low, with the Property Council comparing Mr Marshall to former Labor leader Bill Shorten.

What an insult that must have been for the Premier. The article continues:

The blow-up came after it emerged one of the people enlisted for the campaign against the land tax changes—described repeatedly by Business SA and the Property Council as an attack on 'mum and dad investors'—is a dental surgeon who owns a Bentley worth almost $300,000 and a private dental practice in the exclusive Adelaide suburb of Unley. Liberal sources believe Timothy Goh's affluence shatters the 'mum and dad' investor line and bolsters their argument that the only people negatively affected by the changes are a minority of well-off South Australians who use trusts to minimise their land tax exposure.

They also say Dr Goh invited scrutiny on himself by using his Facebook page to mount personal attacks on Mr Marshall.

Dr Goh wrote on Facebook last month that the Premier was 'unfit for his role' when he downplayed the state's unemployment figures and has accused the Premier of 'screwing over' investors with the land tax reforms.

On the same Facebook page, Dr Goh appears in photographs driving some of the world's most expensive cars and drinking $150 bottles of Penfolds RWT, known as the 'Baby Grange'.

It is incorrectly described in the article as Baby Grange. The article continues:

The photographs also include the moment he took ownership in 2017 of a Bentley Continental GT valued at almost $300,000, with a salesman from the car dealership Chateau Moteur photographed handing the keys to a beaming Dr Goh.

A Liberal source said Dr Goh was 'hardly the ideal choice to front a campaign that's apparently about people doing it tough'. 'You can't knock a person for getting ahead but driving around town in a Bentley doesn't really sit with the whole 'mum and dad' investor line', one MP said.

Wouldn't it be nice to know which member of the government benches was happy to use that line to attack Dr Timothy Goh? The article continues:

A furious Dr Goh on Wednesday accused the Liberals of smearing him and knocking him for having gotten ahead through hard work. 'I have never hidden the fact that I have got a good income but I have worked very hard, I have three degrees, I have worked over 80 hours a week for the last 20 years,' he said. 'The fact that the Liberals, a party for which I have held fundraisers and made donations to in the past, would do this to me is abhorrent. They're trawling through my social media.'

He said he had taken a high-profile role on Facebook in attacking the government's changes because had been urged to do so by friends and associates who were going to be 'smashed'. These included an elderly Greek-Australian with a small portfolio of properties and a fellow medic whose land tax bill would increase by $307,000 a year.

In the Business SA material denouncing the original land tax changes, Dr Goh appears as a case study—

Mr PEDERICK: Point of order.

The Hon. A. Koutsantonis: Really?

Mr PEDERICK: Yes, really.

The SPEAKER: Order! Member for Hammond.

Mr PEDERICK: I think people should be just paraphrasing anything out of a newspaper article. He is just reading direct quotes. It is out of order.

The Hon. A. Koutsantonis interjecting:

Mr PEDERICK: It is: you know that, Tom—but you have been here 22 years and perhaps you don't.

The SPEAKER: I do not uphold that point of order.

Mr BROWN: Thank you.

The SPEAKER: But I will listen carefully to the member for Playford's remarks. Thank you, member for Hammond.

Mr BROWN: I have almost finished, Mr Speaker.

Mr Pederick: I am crushed, Tom.

The SPEAKER: Order!

Mr BROWN: I will start again:

In the Business SA material denouncing the original land tax changes, Dr Goh appears as a case study saying he will be so badly affected that he will move his business interests interstate.

In a sign of how savage the debate is becoming, SA Property Council chief executive Daniel Gannon—who until recently was an adviser to Mr Marshall—took aim at his former boss. 'We're now seeing class-warfare language from Premier Steven Marshall, reminiscent of Bill Shorten and Chris Bowen,' he said.

Mr Marshall this week announced a compromise on land tax which slashes the maximum rate but maintains the controversial aggregation policy.

I will not read the rest, in deference to the member for Hammond.

Those opposite should take a leaf out of the book of the opposition leader on what consultation with the public actually is. The opposition leader and the opposition at large have held quite a number of community forums seeking feedback from the public and business. The majority of those taking the time to provide their views and circumstances were far from traditional Labor supporters.

I have also conducted some consultation in my electorate about this particular issue. In fact, I had a constituent in my office only a few weeks ago. He is a tradie who has worked and lived in Parafield Gardens for 30 years and has, through hard work and working usually six or seven days every single week, managed to build himself up a portfolio of four properties in Parafield Gardens. He has no superannuation; this is what he has done to save for his retirement, to have these properties.

He sat in my office and he said to me, 'I can't figure out why a Liberal government wants to do this to me after I have managed to build this portfolio. I am going to be absolutely smashed by these aggregation changes they are bringing in and I don't know what to do.' I had to say to him, 'I don't know. I also don't understand why a Liberal government would want to do this to you, but the fact is that that's what they want to do and the fact is that Labor has to look at how you might best be protected from these changes.'

So we have done the consultation. I have had people in my office. The forums have been conducted. I know many of my colleagues have also had people in their offices they have been talking to. This consultation has allowed the opposition to properly formulate a considered and fair position on the government's land tax changes. The government's position will be detrimental for not only mum-and-dad investors but also retirees who have built their nest eggs on the back of property investments and small business owners that may be renting a shopfront at a small shopping centre.

Thousands of South Australian families, retirees and business owners will be paying significantly more tax. One resident from the northern suburbs expressed in his online submission to the land tax reform website the following—and I must at the start say this gentleman is certainly not a long-term supporter of the Labor Party:

My wife & I have recently purchased a 3rd rental property as I am self employed & haven't got super to retire on & my wife is a low income earner & her super is just under $90k…

He also goes on to say:

…we will go from paying a couple of hundred dollars of land tax a year to be paying at least $6,000 per year…

This position which we have got ourselves in has come about by before I was self employed (20yrs now) I worked full time but also had at least 2 part time jobs, working in a bottle shop at night & weekends & working at footy pk at events. Now to do this my wife had to bring up our 2 boys by herself as I was never home.

He then goes on to talk about how he is certainly no supporter of the previous Labor government but cannot understand why this Liberal government is doing this to the small investor. He also says:

If your reforms do go ahead I will have to sell 2 of our properties…

And this is in a slightly depressed market, further depressing the market when people across the state have to sell properties en masse. This is someone who lives in the northern suburbs, of modest means, who spent years working hard, trying to save for their retirement, and what does the government do? It comes along and kicks them in the guts.

So you can see from this gentleman's experience the panic the Marshall government is causing right across South Australia. The Premier hit the nail on the head when he said, 'New taxes will only serve to undermine confidence and make the situation harder for families, business and employers.' I will just say that again. The Premier said, 'New taxes will only serve to undermine confidence.' Well, what does the Property Council's director, Daniel Gannon, believe the Marshall government's land tax changes will do to business confidence? He said they are 'taking a bulldozer to business confidence'. Of course, this was before he became an impassioned believer in the government's land tax legislation.

While we are on the subject of business confidence, let us look at the ANZ Property Council survey from June to October. Between when the land tax changes were first uttered by this government in their disaster of a budget to now South Australia's business confidence index dropped by 43 points. This is staggering. Those opposite do not understand what that represents. This survey, which has been conducted since 2011, demonstrates the biggest drop in points that has ever been recorded, not just for South Australia but for any state.

This brings me to the number one reason why we on this side will be opposing the Marshall government's land tax hikes: it is due to the negative impact it will have on jobs. The potential for job losses should be ringing alarm bells for the government, who are already presiding over a very high unemployment rate, one that in opposition they declared unacceptably high. But are they listening to those people who actually know best? For example, this gentleman in his online submission talks about how:

…this huge imposition will affect our ability to keep our spending at the levels it has been and we will be forced to let staff go to cut costs.

This small business man understands the situation. According to ABS statistics there are more than 143,000 small businesses operating in South Australia. The damage these proposed land tax changes will make on them is immense, and that is why we on this side oppose this bill. But there is another thing that bears repeating in this place—that is that this bill represents one of the single largest attempts at wealth redistribution this state has seen.

Ordinarily you would say, 'Wealth redistribution? Isn't that the sort of thing the Labor Party is wholeheartedly in favour of?' Well, except in this case it is a wealth redistribution from thousands and thousands of small investors to 400 people at the top. That is what this particular bill does. It takes the savings and the investments from small investors, even medium investors, and gives them to 400 big fat cats at the top of the pyramid.

Who are these people? They are the people the government has deigned to actually engage with, the people the government has deigned to actually speak to, and that is their mates down at the Property Council, not the small investor, not the struggling person who owns one or two houses that they have saved for over the years, but the big end of town, the only people they are prepared to talk to.

We have seen that this bill is not only opposed by small business people but it is opposed by small investors. It will have an disproportionate impact on those people at the smaller end. Do not try to fool people into thinking that somehow it is some sort of major reform package because this bill does not do cuts at the bottom end. This bill does not increase the threshold at the bottom end. This bill just introduces aggregation and gives cuts to your mates at the top. That is what this bill does.

We have already legislated all the changes to the thresholds they did previously, announced in last year's budget. It has already been legislated. All this does is introduce aggregation and then spend some of it giving big tax cuts to the people at the top end. I am pleased to oppose this bill because it is absolutely the wrong thing to do. I urge everyone in this house, especially those opposite who claim that they have the guts to cross the floor whenever they need to, to do the right thing on this legislation.

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (20:20): I rise to speak on the Land Tax (Miscellaneous) Amendment Bill 2019. I start by indicating that I pay land tax. I have for nearly 30 years and I have hated paying it every year—to whatever government. I have waited a long time in this parliament to see some genuine land tax reform. It is something that I follow with some interest.

In terms of the history of land tax in South Australia, it was introduced in an attempt to ensure that those coming into the new colony bought town acres, did not land bank and buy more than one. A tax was supplied for that purpose, and it was a worthy purpose because the whole migration experiment for South Australia relied on new people coming to South Australia and being prepared to invest here and set up their families and businesses and, even harder still, go out into the regions to make a living to ensure the prosperity of the state, in copper and wool in those days. I think the purpose of its establishment was a worthy one, and we seem to have lost sight of it.

I certainly am concerned—and this is why I am a member of the Liberal Party and not the Australian Labor Party—that the Labor Party have consistently maintained a view where they hate people—hate people—who are going to go out and earn and accumulate some asset. They are pretending at the moment as though they care about people who might be affected by tax reform, but this is the reality of it. The Australian Labor Party were so intent on ensuring that people did not aggregate property that they objected even to putting a central railway in South Australia through to the Northern Territory. It ended up having to give away the Northern Territory to the commonwealth. Why?

Mr Brown: That was a while ago.

The Hon. V.A. CHAPMAN: Yes, 100 years ago. Why? Because they could not bear the idea that there would be land speculation developed along the railway and stations throughout the Northern Territory, that the rich of the south were going to go up there and buy more land and speculate. Read your history books. These people hate people who have a go, who have a crack, who actually make provision for their families.

To be absolutely relevant to today, it irks me to come into this house to hear this pretend care for the people who have worked hard to aggregate some extra properties, that in some way we are going to destroy and demolish it on this side of the house. I was frankly insulted by the contribution from member for West Torrens, and not because he quite reasonably made a shout-out for the people who came here after the war to build a life, as though these men were giving up their soccer games with their children.

I lived through a generation where our families gave up a lot. Our fathers did not ever come to sports events. They were out there working lots of jobs. My mother worked in separate employment. My grandmother gave up her opportunity during the war to work extra jobs to be able to support her daughter, to be able to make sure that there was some future for them in the new Australia after the war—yes, great. Let's recognise that there were many people in that generation who—apart from sacrificing the lives of young men, mostly, in those families—also had to work hard. Let's not forget them. They have made a contribution.

I remember the previous Labor government, just in the time I have been here, under treasurer Foley. I remember minister Conlon at the rallies against land tax against the previous Labor government when they were going to make amendments to land tax, when they were going to abolish the rort of removing minority shareholding in companies of ownership of land when there was 5 per cent owned by mum or dad.

What did treasurer Foley say about that? He said that that was just a rort, that he was going to get rid of it, that it was no longer going to be recognised and that there was going to be a change. So please do not come into this place and start giving lectures to this side of the house when we say there must be comprehensive reform. We have some good runs on the ground in the Tonkin administration, which gave to South Australians—

Mr Picton interjecting:

The SPEAKER: Order! Member for Kaurna, be quiet!

The Hon. V.A. CHAPMAN: —the principal place of residence to be land tax free. The previous Labor government could not bring themselves to come in and actually put land tax back on the principal place of residence, so what did they do? They smashed it with ESL instead. They made you pay tax to live in your own house. What did we have to do when we came in? Give the $90 million a year back to the people of South Australia to ensure that we had some remedy. The reality is that these people hate others getting ahead. They hate that, and they have demonstrated repeatedly throughout history their refusal to recognise the blood, sweat and tears of people who make a decision to invest in property.

I can tell you that after nearly 30 years of paying land tax I am very pleased that finally a government is prepared to comprehensively review the rate, the threshold, the obligations in relation to property development who utilise trusts who will have a surcharge and, most importantly, to be able to look at the question of aggregation, which has been with us for as long as land tax has existed, and be able to say, 'Fair crack of the whip. Those who own a portfolio of a number of properties versus those who own the same value in one property are going to share the load.' It is not easy because people have structured their financial arrangements. Sure, they have some time to restructure them.

I do not think the world is going to fall apart. I do not think the sky is going to fall in, but there will be some people who are hurt. There are many more who will be advantaged by these reforms, and for those reasons I will be supporting them. I would like to just indicate on the speculation, perpetuated first by the Property Council and then by others, including the Labor Party, about how this was going to be damaging to mum-and-dad investors who might have a small portfolio. A number of myths were immediately trotted out as though this was going to be the consequence of this legislation. Most of these myths have now been exposed publicly, but let me just list some of them:

myth 1: that a person's principal place residence would be liable for land tax. The fact is the principal place of residence remains exempt from land tax;

myth 2: that a person with a PPR and other investment property—i.e. a holiday home—will have those properties aggregated. False. The fact is that the PPR will not be aggregated with any investment properties;

myth 3: that self-managed superannuation funds will be affected by changes to aggregation rules and liable for trust surcharge. False. The facts are that SMSFs will be excluded from changes to aggregation rules and, if a property is held within an SMSF, it will not attract a trust surcharge. A property held in an SMSF will not be grouped with property owned by a taxpayer outside the SMSF;

myth 4: that a husband with a property in his main and a wife with a property in her name will have their properties aggregated. False. The facts are that the husband with a property in his name and a wife with a property in her name will not have their properties aggregated;

myth 5: that all trusts will be aggregated. False. The facts are that different trusts will not be aggregated if they pay the surcharge. The trustees of existing family trusts—discretionary trusts, most commonly—will have a choice of nominating a beneficiary or paying the surcharge of 0.5 per cent, capped, as we know, under the proposal. Similar rules will apply for fixed and unit trusts; and

myth 6: that individuals who hold property as natural persons, trusts and companies will have all of their properties aggregated. That is absolutely false. The facts are that individuals will be able to hold land as a natural person in a trust and in companies without the properties being aggregated into one single ownership. Property held as a natural person will not be aggregated with property owned in companies and will not be aggregated with property owned in trust if the trust pays the trust surcharge.

This was how it opened. I do not think for a moment (and I said this to the chair of the Property Council) that this opening shot over the bow, I suppose, in reaction to the aggregation proposals in this part of the package—because, of course, they love everything else, they just did not like bits of it—was to try to muddy the waters. The assertion that on this side of the house, the Liberal Party had not consulted with stakeholders was completely and utterly false. I put this on the record: we had been consulting with major stakeholders over a number of years prior to the election. We had discussions with them about land tax reform. They were begging for it and we agreed with them.

We said, 'A rate of 3.7 per cent is completely uncompetitive around the country and is not acceptable and we need to fix it and we will sit down and go through it,' and we did. So that assertion is completely false and, I suggest, mischievous. Then, allowing people to be frightened in a circumstance with an envelope of fear was completely unnecessary. Having said that, we made the commitment that there would be proposals to complement other initiatives we had made to be effective from 1 July 2020. We made a commitment over a period of a number of weeks.

Of course, we have to take the flak from those who want to argue for and against bits and pieces of these proposals; we accept that. But the alternative is to do it the Labor way and just simply announce and introduce and then beg forgiveness down the track. Announce and defend, announce and defend, announce and defend—I had 16 years of that in this place.

Mr Brown: Like in the budget?

The SPEAKER: Order!

The Hon. V.A. CHAPMAN: It is not a model which we accept or respect. We are prepared to do this. We are prepared to do the hard yards. There are still aspects of this that are not agreed, but there are three aspects which are going to be moved in this house in committee and I outline them as follows: firstly, that there will be amendments to the Land Tax (Miscellaneous) Amendment Bill to increase the threshold where the top 2.4 per cent land tax commences. The threshold of the top land tax rate will be increased by $250,000, from around $1.1 million to $1.35 million in 2020-21. The threshold will then be increased by a further $250,000 to $1.6 million from 2022-23. The top rate will be indexed annually by site value growth post 2022-23, consistent with the existing practice.

Secondly, I will propose amendments to introduce a new marginal tax rate of 2 per cent between the previous top threshold of around $1.1 million and the revised top threshold. Thirdly, I will propose amendments to introduce a requirement for an independent review of the impact of the total land tax reform package in 2023. This will include the amendments introduced in the 2018-19 and 2019-20 budget. I will not go into any detail of those at present because we will be canvassing them in committee if it is the will of the parliament to progress after second reading.

I am confident that, for all the pain that comes with genuine consultation with the public and the refreshment of the positive response we have had in relation to this from those who will actually benefit from the aspects of this package, there will be a significant number of South Australians who will benefit from the near $90 million that comes with this package back to South Australians. That should be making the Hon. Mr Lucas of another place, our Treasurer, weep because of the extra revenue that he is going to have to hand back, but that is part of the deal here.

There will some who will be paying the price, as they will see it. There will be significant others who will get the benefit, and that near $90 million returned to South Australians so that they can spend it in the Liberal way, as they choose, will be singularly the most important feature of why we go through the pain of these things, because people do need to be rewarded. They need to throw off the shackle of the previous Labor government. We need to get this state competitive and we are up for that fight.

Ms MICHAELS (Enfield) (20:34): I, too, rise to speak on the Land Tax (Miscellaneous) Amendment Bill 2019. I think it is important to look at the specific bill before us and I will highlight some of the basic features, including a shift to aggregation of an individual's ownership interest in every piece of land in South Australia rather than aggregating properties held in the same ownership structure.

The bill introduces provisions to aggregate properties held by two or more related companies. It introduces a surcharge on land held by trusts and it introduces new rates and thresholds. I think it is important when looking at such a significant reform in land tax to go into the history of land tax in this state. As a tax nerd, for me this is one of the more interesting parts of this debate. South Australia was in fact the first state to introduce land tax back in 1884. It was very quickly followed by all the other states and for some 40 years also by the commonwealth, which had a land tax at the same time as the states from 1910 to 1952.

In looking at what we do with land tax going forward, I think the rationale for introducing land tax is worth noting. Firstly, it was introduced to raise revenue to compensate for abolishing state tariffs. At the time, there were significant community pressures to tax wealthy property owners. There was a strong government desire to break up large estates, particularly in primary production. It was considered then, and it is still considered now by most economists, to be a highly efficient tax.

I said the commonwealth abolished it in 1952 and it is also worth noting why the treasurer at that time sought to abolish it. He gave four main reasons: firstly, it was not achieving the stated objective of breaking up big land banking. Looking at the numbers coming through from Treasury at the moment, that is still an issue, with only hundreds in the top landholders compared with thousands at the bottom end. It was a tax on a capital asset and particularly for farmers, although now farmers are exempt at a state level. There were no similar taxes on other classes of assets and that was a concern for the then treasurer. Again, this is still an issue now.

The growth of revenue from other sources, particularly income tax at a federal level, was a push for abolishing land tax. That is not helpful at a state level right now. There was to be a significant reduction in administration costs by abolishing land tax. At a commonwealth level, compared with other taxes, it was administratively costly to collect for the commonwealth. Inevitably these aggregation changes, which are actually quite complex and deal with quite complex legal structures, will no doubt increase the collection costs to RevenueSA.

So let's go back to basics and look at what land tax is. Put simply, it is a tax on land owned by an owner in South Australia based on the ownership at midnight on every 30th of June. It is based on the taxable value, which in South Australia is site value, which is the value of the unimproved land. Let's assume it is an empty block of land with no buildings or other improvements. That is what we are basing it on.

In South Australia, we have a progressive rate structure with a tax-free threshold, as opposed to a flat uniform rate, so the more land you own, the more you pay per dollar of value. Of course, there are a number of exemptions that are floated through the system, including primary residence, primary production land and retirement villages, amongst others.

The fact that in South Australia we have a progressive rate structure was considered an issue at least as far back as a 1998 Productivity Commission report that I managed to dig out called 'Directions for state tax reform', in which the commission reflected that the existence of tax-free thresholds gives landowners in some states an incentive to subdivide their land into smaller parcels and to create different legal entities to own such properties. Until now, South Australia has only aggregated property values based on a per ownership basis, so if I own three properties in my own name, I would be assessed on the total site value of all three properties. That is how the current land tax system works.

Other states have already legislated to introduce grouping based on land values across related parties. In fact, this bill is based on similar legislation in Victoria and New South Wales. The aim is to group land owned by related corporations, so I cannot set up three new companies and have three properties in each of those and have three tax-free thresholds available to me and the lower rates that would apply.

It is also to group interest in land to a landowner so that if I own 100 per cent of one property with a site value of $400,000, and I own 50 per cent of a property with my business partner with a site value of $500,000, under these new rules I would get one land tax assessment based on a total site value of $650,000. Again, the current system does not work in that way. I would currently receive a tax bill based on $400,000 and the partnership, as a separate owner, would be assessed on $500,000, with both ownerships accessing the tax-free threshold.

The other part of this bill is the surcharge on trusts. I have a particular objection to this part of the bill because it is a blanket penalty on the use of trusts. Under this bill, trusts will be forced to pay an additional 0.5 per cent simply because they are trusts, not because of multiple property ownerships. For example, if I had one rental property in a trust I could be paying nearly triple the land tax that I would have paid if I simply owned it in my own name. It has nothing to do with using trusts to split up property ownerships and nothing to do with aggregation, just one property that I might have chosen to put into a trust for asset protection, for family succession planning, for the perfectly valid use of the capital gains discount that is available at a federal level for trusts. I could choose a perfectly legitimate structure and, under this bill, I would be penalised, and not by a bit but a substantial amount.

I understand that the concept of the trust surcharge is really on the basis that it is considered easier to administer, and true grouping rules relating to trusts are considered much more challenging because they are complex. However, easy does not always mean good policy and we can see grouping rules working quite well with trusts in the payroll tax environment and in federal environments. Another alternative could have been to extend the ability to nominate a beneficiary as the ultimate owner for land tax purposes beyond 30 June 2020, so that the grouping provisions would flow from that.

I also have concerns about some technical drafting in the bill, particularly around the treatment of fixed trusts and unit trusts, not necessarily the concept of tracing through to the unit holders but whether the drafting of the legislation and the definitions used for fixed trusts and unit trusts are such that almost no trust of that nature used in South Australia will actually satisfy these definitions. In my view, these provisions would therefore be ineffective.

I also have some other technical issues that I will no doubt have the opportunity to raise at the committee stage. However, my greatest concern with this bill is the way that it has been progressed from a budget announcement that took everyone by surprise, that is effectively retrospective and is, quite frankly, a broken promise by the Marshall Liberal government. They went to the election promising lower land tax. Their first budget was consistent with that promise but then this huge whack was brought upon the people of South Australia. Small businesses in South Australia and self-funded retirees in South Australia were all hit for a six by these changes.

Tax policy is too complex to be done on the run. As we have heard in this place today, we are now up to land tax version 5.0. I have been at our land tax forums and I have met with landowners in Enfield. I have a number of family and friends, largely the migrants the member for West Torrens mentioned in his contribution. I know the significant pain that will be felt by these people if this bill is passed in its current form.

If we go back to the basic premise of why land tax was introduced, it was introduced on the basis that landowners could afford to pay. But can they afford to pay? Can they actually afford to pay when they are going from a land tax bill of $5,000 to a bill of $15,000? No, they cannot if they are making no more money from their properties, or is the government accepting that residential rents are going to skyrocket, that small businesses are going to pay significantly higher rents to make up for this?

Unfortunately, it seems to me that, in order to get it through the Liberal party room, the Liberal backers and the Property Council, the cost of introducing aggregation and the trust threshold is being borne fairly and squarely by the smaller investor. The top end of town, by my calculations, is being looked after. They are the ones getting the tax cuts, not the small businesses and not the self-funded retirees. That is the problem with this bill: the smaller investors who have structured their affairs quite legitimately are now getting whacked without grandfathering and without any transitional relief, just a new tax hike off the back of a broken promise by the Premier.

That is why the Labor Party cannot support this bill. Can I say in closing that our community and our economy deserve better. It would be disingenuous of me to stand here and say that I have a fundamental objection to tax reform because I certainly do not. I strongly believe that we are best served by a review that encompasses a fulsome consideration of a tax system based on efficiency, equity and simplicity, a review that properly considers diverse views and brings people of this state together in such a process. That is not the process that has been followed by this bill.

Mr PATTERSON (Morphett) (20:46): Before I make my contribution, I would like to note that I am a beneficiary of a family trust that holds properties, but I advise that this legislation will not impact that significantly. I just put that on the record. It also gives me an understanding of the issue that we debate today. Overall, that issue is that South Australian investors are currently paying too much land tax, especially compared with other states. They are subjected to the highest marginal tax rate in the country at 3.7 per cent, and this has been the case for too long.

If this government is to be true to its goals of lowering costs and reducing taxes, then land tax is certainly an area that needs to be addressed by this government. That is what this land tax amendment bill sets out to do: to reduce the overall land tax burden collected by the state government from when we were elected in 2018. Lowering costs is not new territory for the government. Emergency services levy reform will return $360 million over four years to South Australians. Payroll tax reforms have eliminated payroll tax for small businesses with payrolls of less than $1.5 million.

We are also committed to reducing electricity costs and water bills and capping council rates so that people can get more of their money and spend it how they see fit, which then puts more money into our economy. That helps grow the number of jobs, with 15,000 new jobs added in the last 18 months, and also helps to turn around net interstate migration. All these actions combined are setting up South Australia to be a growth state. Lowering taxes to give us a competitive advantage compared with other states is very important so that we can attract capital and in turn grow jobs.

As I said, the land tax rate in South Australia until these reforms was 3.7 per cent, the highest in the nation. If we compare that with other states, Queensland is at 2.75 per cent, Western Australia is at 2.67 per cent, Victoria is at 2.25 per cent and New South Wales is at 2 per cent, so the average of the mainland states is 2.4 per cent. What is the effect of this top rate in terms of being an attractive jurisdiction for investors? It certainly turns investors away from this state. It means that fewer investors are prepared to purchase properties here in South Australia, and that means there is less competition for each property that goes on the market.

We have been left with South Australia-based businesses that understand our state and certainly back it at every stage, but we also need to attract new investment into the state, whether that is from new South Australian investors or from interstate investors who see us as an attractive jurisdiction in which to invest. That is why this government is making this significant reform in regard to land tax. Obviously, this reform is hard; it is not easy. It has been met with opposition, but that should not be a reason to walk away from this important reform for the betterment of this state.

Before I jump into the detail of the bill, I would like to outline some of the factors that influence property investment: obviously, interest rates, which currently are at historic low levels, with the official cash rate set at 0.75 per cent. There are also outgoings: land tax is one that we discussed today, but also council rates, emergency services levies and water rates. There is also capital growth to be considered when investing in property. The lack of competition for properties means that prices are less than they otherwise would be if more competition was involved.

Finally, there is the availability of tenants to whom to lease your property, and to have tenants you need to have businesses that can operate within a strong economy to keep those tenants viable, or, if you are running your own business and want to set up your own premises to operate from, a strong economy so that your business can return profits. One can see that that reinforces that, while land tax certainly is a component in regard to property and the considerations, it is certainly not the only factor regarding the property market, as some would lead you to believe.

Returning to the bill, it is part of a reform package that seeks to reduce the overall land tax paid by South Australians to $90 million. There are four elements to the reform: the first is that we are increasing the tax-free threshold from $391,000 to $450,000 from 1 July 2020, which will provide relief to all taxpayers. In fact, 9,300 current taxpayers will no longer pay any land tax. Another element is an immediate reduction from 1 July 2020 in the top tax rate from 3.7 to 2.4 per cent, which will be equal to the average rate for all mainland states, which I outlined before.

Another element is to introduce a new marginal rate of 2 per cent between the previous top threshold, which was $1.1 million, and a revised top threshold of $1.35 million, starting in 2020-21, running through 2021-22 and then in 2022-23 moving up to $1.6 million. Finally, there is changing the aggregation rules to be similar to New South Wales and Victoria, to now bring in line land that is held in trusts and group companies.

We talked before about who this affects, and, yes, it does affect different companies, individuals, trusts, in various ways, but in terms of numbers, 47,800 individuals will look to pay less land tax. In terms of companies, 7,900 companies, or 75 per cent, will pay less land tax. I should mention that, in terms of individuals, that number of 47,800 is approximately 92 per cent of individuals who pay land tax. This certainly reinforces that the $90 million overall reduction in land tax will be felt across the overall number of taxpayers with regard to land tax.

The government's land tax reform package will certainly help release the handbrake currently on investment attraction. It will boost business and consumer confidence, and in so doing help to create jobs and put more money back into the pockets of hardworking South Australians.

The Hon. A. Koutsantonis interjecting:

Mr PATTERSON: Ninety-two per cent, as I said before. When we talk about aggregation for land tax purposes, we know that it is already in place in South Australia.

The Hon. A. Koutsantonis interjecting:

The SPEAKER: Order!

Mr PATTERSON: Because the principle of aggregation has been in place since the act began, where if an individual owns $1 million of property, whether it is in one property or multiple properties with the combined value of $1 million, then the same amount of land tax should be paid.

To reiterate, the government is not introducing aggregation of properties, as aggregation rules already exist. Therefore, the same principle behind the proposed amended aggregation rules is that two investors who own $1 million of property should be taxed equally, regardless of whether one investor has only one property and the other has multiple properties to the value of $1 million, no matter if the investor owns the property directly as an individual or indirectly via trusts or controlling interests in related group of companies.

The Hon. A. Koutsantonis: It's a different structure.

The SPEAKER: Order! Member for West Torrens, please.

Mr PATTERSON: New South Wales and Victoria, as you know, member for West Torrens, already have aggregation rules in place, and South Australia is seeking to introduce a simplified version of these rules. So landholders' interests would be aggregated across joint and individual ownerships. Joint ownerships will still receive a land tax bill but, if the joint owners own other properties in their own right, they will receive a separate bill that takes into account their total landholdings, which includes the share of joint ownership. The bill also takes into account land tax that has already been paid in jointly owned property so as to not allow double taxation.

The bill also aggregates property held in related companies—again, in line with the current arrangements in New South Wales and Victoria—so that two or more companies will be grouped where there is an established control, for example, where the owner has a 50 per cent or more issued share capital for each of those companies. If you look at South Australia, we already have a similar provision for related companies in regard to payroll tax. We do not let companies set up multiple smaller companies to employ a small subset of their staff so as to make use of multiple payroll tax-free thresholds for payroll tax. That is what the aggregation amendments are aimed at addressing.

In terms of trusts, the design of trusts means that there can be multiple beneficiaries of land held in trust, so there needs to be some flexibility around distributions and sale proceeds to beneficiaries. As such, a trust surcharge of 0.5 per cent will apply for land held in trust with a value greater than $25,000 and it would be levied on the full value of the land. The surcharge will be capped such that the land held in trust will not pay a marginal tax rate greater than the top rate, which in this case would be 2.4 per cent.

There are transitional provisions for discretionary trusts to voluntarily nominate a beneficiary and, in this case, the trust would no longer be liable for the surcharge, if a beneficiary was nominated. The nomination of a beneficiary must be provided before 30 June 2020 and any trust established after the introduction of this bill to parliament, or any land acquired within an existing trust, would no longer allow for this.

Going forward, it is important that trustees of a trust, but also the broader accounting industry across these proposed changes and the time lines regarding nominating a beneficiary, take action before 30 June 2020. Of course, it would be too late if they start preparing their tax returns after 1 July 2020 and then turn their attention to this aspect of the amendment bill, so I think that is something worth alerting people to, certainly within my electorate and that of other members.

Since the June budget, the government has consulted widely and listened to concerns expressed about aspects of this reform. I have had inquiries in my office regarding land tax. A number of them have been from investors who have one property, so no aggregation applies to them. I have also had inquiries from people who own multiple investment properties in their own name, so again they are already subject to aggregation, if the value of their property means that land tax is applicable. They will only benefit from the increased threshold that we are proposing to be put through.

Also, exclusions from land tax for applicable properties that are currently protected are certainly still in place. The principal place of residence would not be subject to land tax nor would it be used to aggregate with other investment properties, so that is important and is a question that has been asked. Property held in self-managed super funds will also not be affected by these reforms, nor will charitable trusts. Land tax used for primary production will also not be subject to land tax.

Additionally, aggregation of properties that are held individually by partners will not be aggregated. By way of an example, a husband and wife can each own a property individually in their own name and not have that combined together as part of aggregation. It is further worth pointing out that land tax is to be applied on the unimproved value of land, so it does not include the value of any building or any capital improvements that have been made to that property.

If I can touch on the numbers of people who are affected, at present 22,300 property ownerships comprise individuals, companies and trusts that own multiple properties and are currently paying land tax on aggregated land value. That is in place at the moment. In fact, there are 16,300 individual ownerships who own multiple properties, either by themselves or jointly with another individual, who clearly receive a sufficient enough return from their rental income to justify continued investment in multiple properties. The tax changes that we are proposing, with a decrease in the top tax rate and an increase in the tax-free threshold, certainly would look to benefit many of those properties as well.

In terms of a proportion of investors who control properties via multiple trusts or companies, there are varying and valid reasons for doing so. Those reasons include asset protection and allowing for multiple parties to have joint ownership of properties. During this consultation, I was presented with examples of owners who have two sizeable parcels of land that have been commercial premises, that are leased out and are held in different companies. So, if one company gets into financial trouble, that would not impact on the other company's operations on the other parcel of land, which may be running quite well and which would, at the same time, protect the tenants who are operating out of that other company as well.

However, as a consequence of this arrangement, the land is not currently aggregated. As I said, it was set up for reasons to assist with asset protection, but for land tax purposes they are not aggregated. However, this was not the primary driver for the set-up. Yes, the new aggregation measures that come into force would then result in aggregation potentially; however, the offset is that the top rate that was applicable to some of the land value has been slashed from 3.7 per cent to 2.4 per cent.

Alternatively, in a proportion of cases there have been trusts or company structures that have been set up so that each tax trust can receive the land tax-free threshold multiple times rather than in the case of an individual owning the same properties outright. Where the properties are all less than or equal to the land tax-free threshold, it does become apparent that, while an individual would be aggregated and subject to land tax, the complex structures of trusts or companies can in some cases pay no land tax. Certainly, with the present land tax law this is legal. Throughout the debates and the proposals that the government has put in regard to aggregation, opponents to the reforms relating to aggregation have really failed to defend the inequity of the current laws that allow this to happen.

Another issue brought up in discussions with people in my electoral office has been around grandfathering for existing investors. If we did proceed with grandfathering, it would create what could be considered a two-tiered system, which would encourage those who would be worse off under any proposed changes before us to hold onto their existing properties and shy away from purchasing new investments in property. This is not what we are trying to do. It could well distort the market and reduce market activity as well at the same time. As I said, it is the opposite to what this reform sets out to do, which is to reduce the overall land tax burden and encourage investment into the market.

While not grandfathering, the trust surcharge proposed to be put in place does provide some median ground as it does allow properties currently held in trusts to determine if, from a tax planning perspective, it is better to nominate a beneficiary and then that beneficiary be subject to aggregation with any other properties held in their name or accept a 0.5 per cent surcharge on the land held in a particular trust. In effect, the 0.5 per cent surcharge does put a cap on any increase to the land tax applied across those landholdings held in multiple trusts. I also note again that this surcharge does cut out when the rate gets to the 2.4 per cent.

Another argument raised against the aggregation was to delay the introduction because of the revaluation process that is currently underway. One of my constituents and their family have certainly worked hard and built up a portfolio that has been set up in trust structures. We did talk through the current market conditions, which are tough at the moment—we understand that—with online commerce and the outgoings continually increasing. The great thing is that they reinvest into their properties with capital upgrades, which does help employ tradespeople.

Some of their commercial properties have not been revalued for up to 20 years, so they certainly are bracing for a big jump in property valuations across their portfolio. Surely the blame for that delay in the revaluation rests entirely with the former Labor government and their mismanagement to allow this to occur. Any real big jump in property valuations could see these family landholdings moving into the top rate of 3.7 per cent, so we sat down and compared the proposed suite of land tax measures, which included the aggregation measures for trusts and surcharges, with the land tax status quo—

The Hon. A. Koutsantonis interjecting:

Mr PATTERSON: After the revaluation we looked at it, we looked through things, and they were looking at paying less land tax overall under the new measures. With this in mind, it is certainly imperative to drop the top tax rate to 2.4 per cent to help reduce the impact of any of these larger revaluations. That has been missed in the argument around revaluations.

I will just conclude by saying that it is imperative this bill is passed swiftly to provide certainty for businesses and property investors associated with these pending changes. This is the largest reform land tax package contemplated here in South Australia, and it moves us more in line with the Eastern States to become nationally competitive. We will see the top tax rate slashed from 3.7 per cent down to 2.4 per cent, and significant overall land tax revenue reduction in the state by $90 million over three years.

This government's land tax reform package will release the handbrake on investment property, it will boost business confidence and it will create jobs and put more money back into the pockets of hardworking South Australians.

Mr PICTON (Kaurna) (21:06): I rise to speak on and oppose the Land Tax (Miscellaneous) Amendment Bill 2019. It is an interesting name, the miscellaneous amendment bill, and covers all manner of sins and what they are trying to do here. They did not call it the 'aggregation bill', they did not call it the 'increasing land tax bill', they did not call it the 'we're breaking our election promise bill', but they would all have been more accurate than to describe it as the miscellaneous amendment bill.

This is a broken promise. This is a government that went to the election and that was voted in on the basis of a policy of reducing land tax. That is their policy in black and white. It is still available on their website, where they talk about the need to reduce land tax and the land tax that is impacting supposed mums and dads. However, not even 18 months into office and, in their second budget, we have a significant whack of increased land tax hitting South Australians in this aggregation measure. There is no other way to describe it other than a significant increase in tax.

As the Treasurer outlined this morning, his costings on this are that it would be an additional $60 million worth of revenue that this bill is seeking to bring in. That is net, once you take into account the lowering of other rates that is $60 million extra in this bill that they are seeking to legislate here tonight. That is a complete broken promise from what was said before the election. There was no discussion before the election about aggregation, there was no message to the community in the Speaker's electorate of Hartley, in the Minister for Education's electorate of Morialta, the member for Newland's electorate, the member for Adelaide's electorate, the Minister for Child Protection's electorate.

No-one went and knocked on doors and said, 'We're going to introduce land tax aggregation measures.' The reason they did not do that is that they know that their own supporters are the ones who are outraged by this. They know they cannot take this to the next election, they know they cannot save this policy up and face the people, because they know they would face the punishment of their own supporters on this.

We had Christopher Pyne comparing this to the GST. Well, my recollection is that John Howard proposed the GST and then took it to an election and got the endorsement of the people for that policy. He did not try to sneak it in between the electoral cycle. He did not try to sneak it in after he had won the election. He actually took it to the people. That is the complete opposite of what this government is seeking to do.

We all remember—they were on corflutes and they were on ads on TV—the promises Steven Marshall made before the election: better services, lower costs, more jobs. What have we had since then? Well, we have had worse services: take my portfolio of health, for example, where ramping has doubled. We have had the unemployment rate going up. We have gone from being about the national average to being the second highest state. We were the highest state until last month. Now we have higher costs, not just higher costs here but across the whole of this budget that was brought in, some half a billion dollars worth of higher costs that are being inflicted upon South Australians in a whole range of different measures.

If they go to register their car or their boat, if they pay to park their car at a public hospital, such as in the member for Cheltenham's electorate at The QEH, where they are abolishing two hours' free parking at that hospital any day now. If you are a nurse or a cleaner earning not very much money working at a hospital, you are going to get a pay cut because your increased costs of car parking are going up, not by 2 per cent, not by 5 per cent, not by 10 per cent, but by 129 per cent, in one go. An extra $725 a year is being whacked on those people. Charges across the board are going up.

Ambulance fees are going up. Despite the fact that ramping has doubled and response times are down, you are being charged more—much more than inflation, $1,000 now at least a trip to get an ambulance to a hospital. Everywhere they can, they are hitting people and this is one of those measures. It was sneaked into the budget, it was not discussed very much at all on budget day. I think the reporting is that maybe Tom Richardson from InDaily asked one question pointing it out in the budget lock-up and the Treasurer batted it away saying, 'Oh, it is just a minor adjustment, just dealing with some minor technical matters.' You know, 'Nothing to see here,' sort of thing. Well, pretty quickly people realised what was being planned here by the government.

The Hon. A. Koutsantonis: $40 million only.

Mr PICTON: That's right. They said this would only be $40 million in the budget and pretty quickly people realised how far off the mark that was, how much more than $40 million a year this was going to take out of the pockets of hardworking South Australians, to the order of three times as much as what was said in the budget.

So they put it in the budget, they did not do any work beforehand, they did not do any modelling beforehand, they did not have any idea how much money they were making, they did not have any discussion with anybody beforehand about it, they did not even discuss it with their own backbench before they put it in the budget. For all we know it was not even properly discussed at cabinet. The Treasurer, who of course really runs this government, and everybody in South Australia realises this now, put it in the budget; maybe the Premier did not even know. It is highly likely. Probably he was perusing the arts pages, probably perusing what was in it for Lot Fourteen, but probably not looking in the back of the budget.

The Hon. A. Koutsantonis: Mykonos traveller's guide.

Mr PICTON: The 'Mykonos traveller's guide' might be a private joke of the member for West Torrens. The Premier perhaps did not even know that this was in there. What we have seen since then is that people have realised, and we have heard business group after business group, investor after investor and industry groups out there saying what an impact this is going to have.

As our leader, the member for Croydon, pointed out today, the basis upon which we have looked at this legislation is the test that we have for our party. How is this going to impact on jobs and how is this going to impact on fairness? This is going to fail in both regards. There is clearly an impact on jobs obviously. We have already seen a significant drop in confidence in our economy since this was released by the government.

We have already seen investment drying up, particularly in our building and construction sector, and no doubt there will be an impact on housing from that. We have already seen unemployment going up since this measure was announced. There is also clearly an issue of fairness because what this bill is proposing to do in its supposed miscellaneous way is it is aggregating funding, significantly hitting a lot of people—more modest investors—but giving a big tax cut to the biggest property investors in South Australia, the couple of hundred or so people who have millions of dollars worth of land tax liabilities, the people who own shopping centres, the people who own Westfield. I am sure Frank Lowy would do very nicely out of what is being proposed here in this bill.

There are thousands of people across South Australia who will be hit. We know that more money is going to be raised from the aggregation, less money than that is going to be given out to the top investors and we know that the government is getting more money. So the government wins and the big property investors win. Who is going to lose? Paying both of those people are those who are caught in the middle.

We know that there are a huge number of people in this state who have worked very hard for a very long time to build up their businesses, to build up their retirement nest eggs, to build up their investments, to look after themselves in retirement and to pass on to the next generations of their family. They have organised themselves to protect their families and to distribute assets to family members, and they are the ones who will be hit by this. A lot of them do not have a significant amount of assets, but their taxes are going to go up very significantly in this process. A lot of them do not have significant ability to change their asset mix without significant other tax liabilities, so they are trapped. The government knows that they are trapped, and they know that they will be able to get this money out of them.

As members have already said, this will hit a number of communities, particularly a large number of communities who are in the category of people who are postwar migrants to South Australia and who have worked hard. A lot of people came here with just their suitcases; they built up businesses and investments and worked their guts out since coming to South Australia. A large number of those people will be the hardest hit. How do we know this? We know because we have actually consulted, unlike the government who brought this in without telling anybody. We actually did the hard work and went out and consulted with communities.

The first meeting was held at the Marche Club in the member for Hartley's—the Speaker's—electorate. There was an outpouring of concern, an outpouring of stress and an outpouring of anger from the people of that community about what the impact is going to be. We heard from people in Lockleys who have a similar issue in the western suburbs. There was a similar forum in the inner southern suburbs as well. We know that the member for Adelaide held one forum, but she kicked everybody out: the media were not allowed in and no Labor Party people were allowed in. As soon as the people who were concerned about this started to hear and registered for the forum, suddenly subscriptions for the forum ended.

There is such anger about this measure in the community and in many communities across this state, including in the member for Adelaide's community, because this was not taken to the election. If it had been, no doubt there would have been a different result in the election. Of course, this is a retrospective measure. This is not something where people are being grandfathered. This is not something where they are saying, 'From 1 July, if you buy a property, if you set up a trust in this manner, then this will apply to you.' This is being set up to apply to those people who have had their properties and their arrangements for perhaps decades and decades. It is a retrospective measure, which is another reason why people are so angry about it.

We also know that this is version No. 5. This bill that was introduced was version No. 4. Today, we had amendments introduced that were printed, according to parliamentary counsel, at 9.56am this morning, which were version No. 5. How can you trust a government that changes its tune so quickly? Version No. 5 did not come about because of any process of public consultation—it was version 4 that came out of the public consultation, supposedly. Version No. 5 came out of a backroom deal between the Treasurer and his former staff member Daniel Gannon—who is a former staff member of the Premier as well, and a current aspirant for any preselection he can get his hands on in the Liberal Party—to win over the Property Council.

We know that the Property Council's membership represents the largest property investors in South Australia and that the reduction in the top rate for very large investments in property will probably help a lot of people who have a lot of massive investments, but it is not going to help those people who have more moderate investments. They are the ones who will be stuck with this. The Liberal Party claimed that they are the party for small business, but time and time again what we actually see in how they vote, in how they draft legislation and in how they behave in this place is that they are the party for big business, not the party for small business. They are the party for the largest corporations, not the party for people who want to have a go. The Prime Minister talks about, 'Have a go, get a go.' The exact opposite is happening in this legislation.

Have a look at how they have treated some of their supporters during this debate. Have a look at how they treated Adelaide dentist Dr Timothy Goh, who was, I think it is fair to say, one of the former government's sharpest critics when we were in government—there was certainly no love lost there—and one of the Liberal Party's greatest supporters. He has been attacked, he has been singled out and this government has tried to embarrass him. We know that there was a leak of his personal information to try to embarrass him. People were trawling through his Facebook page, sending that to a journalist at The Australian, and trying to embarrass Dr Timothy Goh because he has had some success as a dentist and he has bought a number of assets.

I do not think that that is what people were expecting when they elected the Liberal Party into government. I do not think a lot of Liberal Party supporters were expecting that sort of attitude, and that is why we are seeing so many people saying they are now going to desert the Liberal Party. That is why we are now seeing people talking about setting up 'real' Liberal parties or 'true' Liberal parties to rival the Liberal Party at the next election because they are so outraged about what is happening here.

That is why we have heard all this discussion about how people might cross the floor and how people are secretly upset about this in the Liberal Party. I have to say that there will be a test for that, if people do cross the floor or not. I suspect that they will not. I suspect that this is all chatter behind the scenes. I suspect that we will not see people having the guts to do that. They just want to please their sub-branches or their electoral councils, who are very angry about this, by saying, 'Well, yes, this is all Rob Lucas, but I am totally supportive of you. I didn't really want to do this. I am really worried about it. I am raising concerns about it.' They are not actually going to do anything about it. They are not going to take that stand here in the parliament, but maybe I will be surprised. I guess we will see very soon.

We consulted on this measure. We did the hard work in actually talking to people. I think if the Liberal Party had done the same they would have got the same reaction. I think if the Liberal Party persist with this policy, they will see the impact over the next 2½ years leading to the election. I think we are already seeing talk of some members of the Liberal Party either leaving the party, pulling their donations, or a lot of people saying, 'We want to stay in the Liberal Party, but we are going to try to recruit other people who are offended by this measure to try to change the preselections of a number of people who are in this parliament.'

The member for Unley has been mentioned as one person who might lose their preselection due to a revolt over this measure. I am sure we would all be disappointed to see the back of the member for Unley. He is an asset to our side.

An honourable member: Save David.

Mr PICTON: That's right: 'Save David' would be the measure from us. The government say, 'We've got modelling that shows that this is all a good idea. We've worked this all out.' Of course, they did not have it before the budget. They did not have it immediately after the budget. They have done some since, but they are refusing to release it. They are refusing to show people what the modelling is. We will go through this in some detail in the questioning at the committee stage of this, and I hope that the Premier, who introduced this measure, actually fronts up and takes the questions at the committee stage. I hope that he does not handball this down the line to the Deputy Premier. I could not imagine that he would chicken out so much as to not be able to deal with it, but we will see very shortly.

We will be asking them, 'Where is the modelling of this? What is the economic modelling on what this is going to do to our state in terms of jobs? What is the economic modelling? What is this going to do to our state in terms of business investment or housing or confidence?' All the evidence so far, all the industry groups and all the commentators who have commented are all pointing to this being bad news for the economy and bad news for jobs, and ultimately that is central to our concerns about this legislation.

The Leader of the Opposition talked about some of the small businesses that he has visited. He visited mechanics who have set up their business in a way that is now going to be stung by this measure. I have spoken to an investor in the south who said that he has pulled a building site where he was going to build. It was actually near the member for Mawson's electorate office.

There was a plan to build a significant property development there, but that investor has now pulled that and is planning to invest that money into Queensland instead because of his concern and the impact he is going to face because of this measure. So there are real-world impacts of this happening right now.

We have heard from the childcare industry of the impact it is going to have on childcare centres, which are going to be stung by this new tax. We have heard from GP clinics about the impact on GP clinics, many of which have multiple sites, many of which have trust arrangements. It might mean that a number of GP clinics—if this was to go through—do not offer bulk billing in the future, or offer less bulk billing than they do at the moment, because they are going to be stung so much by this.

We know that there are a number of businesses, as the Leader of the Opposition outlined, which have said they are going to be impacted and not be able to hire as many apprentices as they would have otherwise planned to do. So area after area is going to be hit, and of course central to the concern is: what does this mean for housing developments, what does this mean for housing supply and what does this mean for rental stock in South Australia if we do not see investments continuing, if we see that building supply and building confidence plummeting and further impacts down the line?

We oppose this bill on the basis of its impact on jobs, of its impact on fairness, of the fact that it is yet another broken promise that this Liberal government did not take to the election. In fact, they took a completely opposite policy to the election, and now they are stinging people with this bill, which represents a $60 million hit overall to tax and is only going to seek to weaken our state and weaken our state's economy.

Mr SZAKACS (Cheltenham) (21:26): This is a bill about choice, and I rise tonight to talk about the choices ahead of us, the choice before us as a house, and to explain why I have had some ease, with my colleagues on this side of the house, coming to the decision to oppose this bill. This is about fact over fiction. It is about policy on the run, deals and coffee dates between old friends, and it is also about a fundamental mischaracterisation of the role that Treasury has in the expedition towards a progressive taxation system. It is a bill which I rise to oppose and which we are considering tonight, almost to the minute, 12 hours since the printing of the most recent version, the most recent iteration of the government's pitch when it comes to increasing land tax for South Australians—12 hours since the government decided what to do.

It is a position that has changed not once, not twice, but five times—five separate times that the backbench of those opposite have had the opportunity to stand up in the face of a fundamental change in their ideological disposition around tax. But this evening they are nowhere to be seen, nowhere to be heard. I have some faith that in the hours that are to come some of the true rigour of that ideology will be tested and be on show, I am sure.

It is an utter shambles by any measure, surpassed potentially—maybe—by the chaos that is the Treasurer and Premier effectively fighting it out amongst themselves in the media as to who has the most contemporary facts to furnish the state in respect of this bill. Is it the Treasurer today? Is it the Premier today? I am sure that whoever has carriage of this bill through committee may give us some more detail that we still have not had. If it is the Premier, who I trust it will be, whose bill it is, then I expect we are going to have a fantastic examination of some of this detail.

The pitch from government has been pretty clear—except from their own side, but from our side it has been pretty clear. The government have been as clear as mud in their pitch for these changes. Their very first argument was that this would be a $40 million revenue raiser. Very quickly and, sadly, only upon the inquiry of those on this side of the house, that escalated to $118 million, a threefold increase on their original estimates. Even now, it is only this government that can try, as desperately as they are, to couch a $86 million revenue stream for the budget as a tax cut for investors and a tax cut for mums and dads—$86 million additionally in the coffers of the Treasurer every single year thanks to the decision of those on the other side of the house.

It is an enormous miscalculation by those opposite and it is a betrayal. Not a single word of this was uttered before the 2018 election. Just as with privatisation, not a single word was uttered by this government. It is the same one-line, three-phrase pitch that we heard: more jobs, lower costs, better services. It sounds good. It sounds really good from opposition, but it is a really different story. Not only is it a different story being an executive government but it is a different story because there is nothing about Liberal DNA that has anything to do with more jobs, lower costs and better services. Of course, if you listen to those opposite, this is a great set of reforms. It is the reform that we need and the freedom for those trying to undertake business in this state to finally have the shackles removed.

I said this is about choice, but it is about a quick response to ill-informed choices. It is also a bill that reminds us about what is at the core, what is in the gut, of those opposite: the deep-rooted and fundamental connection that the Liberal Party have to big business. It is this support, in an almost evangelical way, of big capital and big money, overtly and clearly, over the interests of small business and medium family businesses, over mum-and-dad investors and over working families—big capital, big money over mum-and-dad investors—because that is what this bill has done.

It is a friendly deal with the Liberal Party's friends at the Property Council. We heard from a previous speaker, the member for Kaurna, the ambitions of the leader of the Property Council. I will not speak too much about the individual involved because the greatest judgement for that individual involved and the Property Council itself will come from Property Council members. We have already heard it.

We have already heard the rumblings, we have already heard the outrage from members of the Property Council. The question to ask is: are they part of this deal? Is this a deal between the Treasurer and Daniel Gannon, or is this a deal and a settlement between the government and the Property Council? The Property Council is bigger than Daniel Gannon, and I think time will tell where this sits.

This bill demonstrably harms small and family businesses but, as I said, what would you expect from a government that is so set on supporting big capital? They are the same set of individuals who in opposition were quick—in fact, you could not hold them back—to support the big banks, rushing to defend their integrity and the moral standing of our big banks. Well, haven't the big banks returned the favour? Moral failure, a complete and utter disregard for their customers, barely on the fringes of legality, and the royal commission has shone a light on that sort of behaviour. Those opposite were desperate—desperate—to protect the integrity of banks when those on this side of the government sought to impose a fair and reasonable tax on the profits of those banks.

There have been countless representations made to me and to those on this side about the impact of these changes. The thing that strikes me is that over and over again those I am speaking to—the individuals, the mums and dads, those in vastly different situations—are talking to me about the fairness of them making a decision, entirely legal, entirely within the legal frameworks that are presented to them, for a variety of reasons and then waking up to the will of the government's decision to backdate and change structures that have been often and in many cases decades in the making.

These are not legal or financial arrangements that can be unwound, as I am sure all in this chamber who have turned their mind to these reforms would acknowledge. They cannot be changed, they cannot be fixed in a matter of days or a matter weeks, pending the outcome of this debate. They will equally take years to change.

There are also people who have invested in properties who have commercial tenants. They also have residential tenants. In a moment I will talk about two examples that have really struck me about the arrangements that different people have found themselves in. They have challenged me in my own thinking, my own assumptions around some of those arrangements in property investing.

We have also heard very loudly and clearly from peak bodies, from those representing industry and from a vast variety of people from across the state about the impact of these changes. I quote, far from an activist or bolshie body, the Law Council of Australia's Taxation Committee. Their submission to the public call for submissions is, 'The Land Tax (Miscellaneous) Amendment Bill also appears to favour the big end of town.'

Make no mistake, the Law Council of Australia's Taxation Committee know the big end of town. These are their clients. They have also been providing advice, representation and advocacy for the 'big end of town'. If it is good enough for the Taxation Committee to cast a judgement on where this is focused, then surely it is good enough for this house to reflect on that as well. This reform, given the slightest of chances and the slightest of opportunities, has shone a light on exactly where the government sits with their priorities.

I would also like to talk about small business, and a small business that operates in my electorate of Cheltenham. It is a business by the name of Core Physiotherapy and Pilates Studio, which operates in Beverley, as I said, in my electorate of Cheltenham. The partner of Core Physiotherapy and Pilates Studio, Nick Lagos, had this to say:

We have taken out large loans over the years to allow us to do this and made these decisions based on the regulations and tax laws at that time.

Our businesses [and business] have been struggling over the last couple of years due to a slowing down economy in SA and an exodus from private health cover—factors also under the control of the liberal party both federal and state.

As a result of the proposed changes myself and my partners will be up for a large increase in our land tax bill while we are struggling to make ends meet in our business—this will definitely impact our business and without doubt reduce our spending and ability to employ staff and keep the staff on that we have—I can foresee that we will need to reduce costs which will mean letting staff go directly as a result of this large increase in land tax.

These stories from Nick and others who run businesses are all too similar. At a time when we are facing a jobs crisis in South Australia, and nationally, where we see the quality of work diminish, the security of employment diminish and the idea that people now can only hope for a job they can count on, it is desperately scary to be contemplating this bill at such a time.

Another thing that strikes me is the impact that this will have, in an almost perverse way, on migrant communities across South Australia. My local electorate of Cheltenham is an incredibly diverse electorate. We have the United Nations represented, and I have spoken about that at length at various times in this house. What is clear is that the financial decisions and the financial literacy of new Australians—as they were called back in the day, those of a culturally and linguistically diverse background—are different from those who might tinker in the Stock Market, those who might make investments in bonds, those who might buy annuities, or those who might have a comprehensive and equally complex self-managed superannuation fund.

These men and women have invested in property that they will liquidate and draw down on in their older years and in retirement. As I said earlier, these are decisions that have been decades in the making. While we know that those on the conservative side of politics continue to tinker with retirement income in the federal parliament such as superannuation, we would have thought that those in South Australia would at the very least be more respectful of the fact that this does have an incredibly disproportionate impact on migrant communities. It is those people from migrant communities who come and see me and in a loud voice urge and plead with me at times to think about them and about the decisions that they have made legally and justly to secure adequacy and decency in their older years and in retirement.

They are people like Vito who has come to see me, and particularly Rita and George, two local residents from Albert Park. Rita and George spoke to me at length about the small number of properties they own, which are rented by low-income earners. They told me the story about one gentleman in particular who is months and months behind in rent. He is an older gentleman with a complex set of disabilities. They said to me, 'We have never been able to face asking him to move on. The least we can do is try to help and support him with the small amount of advantage that we have.' But with a heavy heart they said to me, 'We can't do that if these changes go through.'

What will happen to people like that older gentleman who are in these arrangements? These arrangements will need to change based upon the outcome of this debate and the outcome of the government's decision. As I said, this is the wrong bill, the wrong reform at the wrong time, for our state. In the face of rising unemployment, more people are looking for work and more people are struggling just to make ends meet. More people are struggling to find a secure and decent-paying job—or even just a well paying job—just to live above the poverty line. When faced with this important but unremarkable challenge, what was the Premier's response? When asked whether South Australia was grappling with an employment problem, the Premier smirked, gave his well-known Cheshire grin and remarked that there was no problem.

The men and women I meet and speak to whom I represent and I was put here to represent are telling the Premier there is a big problem, and it is those men and women who live in the houses of the families of the owners of small business who have pleaded with us on this side to do the right thing—not the easy thing or the expedient thing but the right thing, and that is what we are doing.

We are not deaf. We are not tin eared. We are not waving this through as the easy thing to do, as was suggested earlier by the opposition leader. We are doing the right thing. We are standing in the face of unfairness and we are proud to do that on this side of the house.

Ms BEDFORD (Florey) (21:45): There are two aspects of this issue, and therefore this bill, on which I would initially like to comment. Firstly, we all know that there are limited ways states can raise revenue and there are revenue constraints that the state government faces, but we cannot keep cutting revenue that funds critical public services.

Secondly, the taxes the state collects should be as fair, progressive and competitive as possible. Where there is room for reform, taxes like land tax should be up for change, but the devil is in the detail. There have been and will be many long, detailed and fulsome contributions during this debate, so there is no need for me to add a great deal to the record, except to say that no-one here hates good news for this state, but we all know politics can sometimes get in the way of debate and, in the end, a good outcome. That is why I placed a contingency motion on file to refer the bill to a select committee for review free of the politics.

This review need not take forever. It can embrace the opportunity to have the full and broad conversation needed and will negate the notions that it is better to have something, even if it is imperfect, rather than nothing because we cannot afford to leave the state in this situation; or that no government will ever go near or touch land tax reform again in the foreseeable future.

As we are now onto our third version of this legislation, although some people have said our fifth version—I do not know how I missed two of them—it does seem inevitable for people to think that this is policy on the run or a quick fix to balance the books masquerading as reform. There are many aspects to consider and I believe that, if you cannot explain something reasonably concisely in a way that is likely to be understood by most people, there is something not quite right.

This is not an issue that has prompted debate within and for the residents of Florey to the point where they have made the effort to contact me. In fact, to date, I believe there is still only one directly affected constituent who has contacted our office by email. While I have read detailed communications to the office and spoken with people with particular views for and against, I did seek a meeting with SACOSS as I wanted to better understand why they were so prepared to back this measure.

Despite all I have heard, I still believe there will inevitably be unintended consequences and impacts for those unprepared for these changes, such as needing to amend or abandon development or investment plans, and those unable to weather any additional unintended consequences or costs, such as increases to rental property costs and a reduction in the number of medical practices that offer bulk billing.

These are real examples I have been given that, on the one hand, will impact state growth and employment, but on the other increase day-to-day costs, which in turn will make a big difference to people and families already finding it very hard to make ends meet, particularly those relying on low fixed incomes. These are the people who will not benefit from any of the sweeteners in this legislation.

Nevertheless, should we get to the committee stage, I will be moving amendments in line with those requested by SACOSS to ensure that some of the revenue raised goes directly back into social housing. SACOSS has made representations and believes it has taken:

…account of all the issues in relation to interstate competitiveness, the need for revenue for direct investment in public and social housing and the limited impact of the Trust surcharge.

In representations to all members in this place, they have provided detailed tables and calculations, notwithstanding the fact that SACOSS does not have the resources to model the revenue impact of the tax changes they are proposing. In fact, as I understand it, no-one here has seen any modelling. SACOSS believes the share they are asking of the proposed revenue the bill will raise for government could provide a substantial investment in public housing while still delivering a tax cut. They say:

…the question for government and legislators is one of basic fairness: which end of the housing market is the priority—the big landowners wanting a bigger tax cut or those in need of a roof who support wanting a restoration of public housing?

I believe that accommodation, affordable public and social housing, is one of the most important issues any parliament faces, and I will do my best to ensure, should this bill successfully pass in this chamber, that it reflects the requirements of those in need of a roof.

Dr CLOSE (Port Adelaide—Deputy Leader of the Opposition) (21:49): I appreciate the opportunity to speak on this bill. I want to go on a bit of a journey about the way this bill appears to have been constructed over time and the way the opposition has, over time, formulated its single position on this bill that we received—I do not know—about 18 hours ago now, maybe as long as that.

To start with, I think what we are seeing is an act of hypocrisy on the part of the government. The government went to the election with a pretty clear mantra, and it was an attractive and persuasive sounding mantra, which was that there would be better services, lower costs and more jobs. At no point in hearing that mantra, particularly the lower costs, would anyone have had a clue that the government was proposing to increase a number of charges, a number of taxes and, in particular, to suddenly, in its second year and in its second budget, launch a dramatic change to the way in which land tax is managed and raise an additional amount of revenue from it.

There are other examples, though. The bin tax is one, the solid waste levy increase that was not anticipated and yet suddenly became part of the second budget of this government, an increase that does not appear to be directly attached in any way to an outcome of lowering the amount of solid waste going to landfill. One would think that that would be the correlation, yet there appears to be, on my questioning in estimates, no assessment or estimation made of a relationship between the increase in the bin tax and the expected decrease in the amount of waste going into landfill. In fact, what we have seen is that the bin tax was essentially a way of raising a lot of money largely to move sand around the metropolitan beaches. I may return to that subject in due course.

We have seen numerous other charges increase unexpectedly for people, unanticipated and certainly not signalled by the election mantra of lower costs. We know that better services is a hard argument to sustain in the face of the cuts to public transport, which I will return to, and the closure of Service SA and the closure of TAFE campuses. I think that in an election it is always attractive to come up with an easy mantra, particularly in an election coming from a long period in opposition when it must seem very easy just to promise whatever is necessary before confronting the infinite complexity of being in government.

What was the process that this government undertook in determining this policy? It certainly did not undertake a process that began before the election, or if it did then it is guilty of greater hypocrisy than even I would charge it with. It was not part of the much-vaunted lowering of the land tax rates that appeared in the budget last year. Yet we have been treated in question time, time after time, to the Premier answering questions about this piece of policy that has come out this year and trying to cast it as if it was part of a long thought of, carefully sculptured reform package.

I understand that is necessary for the Premier if he is to sustain the argument that this is of some benefit to the people of South Australia, if he is to sustain the argument that this is not an increase in the tax, because if he allows that the great benefit to people who were paying land tax occurred last year and is law and locked away, then he would have to acknowledge that this round is all about raising more money. He does not want to do that; it was obvious even in question time today. He does not want to talk about this bill as being a revenue raiser, even though his Treasurer is quite happy to be completely frank about the $86 million that will be raised from this.

What we have is not a reform package, a carefully sculpted consideration of the best way to structure land tax: what we have is an election commitment delivered last year to lower the rates and a turn, a pivot, this year to saying, 'We'd better take some of that money back. How will we do that?' That 'how' has been almost entertaining, if you were a dispassionate viewer, because we have had a delightful dramatic contrast in the constantly evolving package as released to the media over the course of a few months versus the Premier's performance in question time.

He is constantly saying that on this side we are wishy-washy and do not have the ticker for reform but on that side they are clear, hard and know exactly what they are doing. That was particularly amusing today, I must say, when we thought we were really clear about what bill we were going to be debating, it having been introduced into this chamber already, but suddenly we discovered that there is yet another accommodation, a desperate attempt by this government to dig itself out of the very unpopular hole into which it has placed itself.

What I have seen in the course of that journey, watching each shift and change, is that the group of property owners being most assuaged are those with the most. I heard my leader earlier today talking about the woman at the forum who spoke about the sandwich and that she was one of the many in the middle of that sandwich. I think no-one can complain about the people below them, but she is watching the people above her increasingly benefiting out of the changes, which means that, given it is a revenue measure, she and her like are going to be the ones who will pay more.

The government could have gone to the election last year and said, 'We think it's time to reform land tax, and this is what that is going to look like. We don't know all the detail because we are in opposition. It is hard in opposition to be definitive, but we can be definitive about our principles. We may not know all the figures, although we may, but we are very clear on the foundation principles on which we believe land tax should be raised.' Had the then opposition then won the election, it would be much more difficult on this side of the parliament to mount an argument that they had no right to do this.

But in no way has the chaotic and constantly shifting policy that evolved from the budget last year, which was reflective of the election campaign, and where we are today with what we imagine might be not only the most recent but the last of the changes—but by no means are we assured of that—made it easy for us to take seriously that this is in any sense a reform package that the government has planned. It is a nonsense.

Added to our concerns and those of so many other South Australians is a complete absence of revealing the modelling. How is it that the government seriously expects the people of South Australia to understand and form a judgement about what this tax is doing, who it is affecting and how it will play out in the economy and with jobs if we do not have access to the modelling? Why is it a secret? Why is it a secret to know which categories of property owners are affected by which of these changes and how many there are?

In fact, I suspect that early on the government did not know because it seems that the government shifted what it thinks it is getting from this over the time when it similarly shifted the package and bill itself. I noticed today that the Premier got caught being a little behind the shift in the policy and the bill versus the modelling by quoting the modelling in reference to the latest version, which simply cannot be accurate because the modelling was done on an earlier version.

Even the Premier appears to have been slightly out of sync with this rapidly shifting, highly political, highly transactional change. It does not appear to be based in any way on principle and on understanding the real impact of this. No-one will believe me if I say that I feel sorry for the Liberal party room, but it must be quite difficult to be in the Liberal party room. It was said to me when I was a backbencher, with the member for Ramsay for those first two years, that the most difficult job in this chamber is that of a government backbencher, because you are required to own and sell all the policies and you are scarcely involved in the decision that creates those policies.

That can be no more true than in this situation, where a somewhat bemused and probably alarmed party room must have seen this parade of changes before it, initially going from the budget position, which was the election position, to suddenly, 'Well, actually, we're going to start raising a lot more revenue from land tax, and then this series of ways in which we are going to do it, but try not to upset people who are getting angry with us too much.' It must have been a lesson in the way that politics really should not work, particularly for some of the people who came in at the last election, who probably rather hoped that it is done with more logic, with more reason and probably with more respect for the party room.

I recall, again, one of our question times when the Premier assured us that his party room was unanimously supportive of one of the versions—I cannot remember whether it was the last one or the one before—unanimous support. I am not sure that is true. I am not sure that it was unanimous. I certainly feel for those who felt that it would be a good idea perhaps for their career, or perhaps they were genuinely sold, that they went out with one of the earlier versions and backed it in hard and said, 'This is right, this is what we should do, this is the land tax reform that South Australia needs,' and then suddenly it was not because it shifted again.

Then they are left, having presumably had a lot of the kind of feedback we have had on this side from the people who are very unhappy, scared and stressed, and those people are suddenly left looking like they wanted something that was different from the one that the government now appears to be putting in. But, as I said, I am personally not convinced that it is the end of the story. I think that there is at least one more chapter in this story.

That was a fascinating process, to try to put forward what is a very, very serious piece of legislation. It is true that my political heart belongs to those who do not own probably even their own home, certainly not other properties. It is true that the vast majority of my political energy is put into advocating for the people who are doing it toughest—that is my job. I am a Labor member of parliament; I represent a very mixed area, but an area with very high levels of disadvantage.

I was an education minister who was desperately concerned about the lack of graduation rates the lower down the socio-economic scale you go. However, I am enough of a broad politician to understand that you do not muck around with tax and you do not muck around with tax on people's investments. I was not listening carefully to all the interactions after the dinner break, but I gather there was a bit of an interaction over migrant people, largely from communities who came post war, who saw property as the place in which they felt comfortable investing, and whether they were the only people who worked hard or the only people who sacrificed in order to make investments.

There are always exceptions and we should always be wary of generalities, but it is true that there are a lot of people without very much money who worked hard and saw property as the way that they could secure their retirement and a chance of their children having a step on the ladder of having property of their own, and we mess with that at our peril.

What we have seen in the feedback we have received on this side—often from Italian and Greek communities, sometimes from Vietnamese communities, but also from Anglo-Saxon and all the rest of the beautiful diaspora of humanity living in this country—has been stress and fear and a concern that led people to tears trying to articulate that they do not feel they have been rorters. They obeyed the law and followed a path that naturally led to holding property in different ownerships, perhaps because they owned a house and then they set up a business and the business owned the property ultimately that it was operating in.

That level of emotional reaction is completely legitimate. For this government to taunt this side for appearing to care—and, in fact, perhaps the allegation is pretending to care—is very unfair. We all represent people who are highly stressed, highly upset and will probably never forgive the government for what it has proposed, whether or not it goes through. What is the larger impact, though, of what is being proposed?

There is the personal impact, the terror, the fear, the anxiety, the worry about how you dispose of a property that you can no longer afford to keep in the context of being amongst many who are likely to be trying to dispose of their properties at the same time. What is the wider effect, though, on the economy? What happens when you have a lot of people who own property, who own businesses, who are employing people, who suddenly need to shift and change the way in which they make their arrangements? What happens is you see a drop in confidence. What happens is that you see an increase in unemployment and you see people unwilling to trust the government that they elected to look after their interests.

None of that is good for South Australia. If we all share one view in this chamber, it is that we all want people to be employed in this state. As a former child protection minister, I know more acutely perhaps than some, that one person having a job in a house makes all the difference to the functionality of that household. One person having a job means that the children are more likely to go to school and finish school, that the family is less likely to fall into the child protection system, that the family's health outcomes will be better.

Yet what we are doing is threatening one of the planks of the way in which our economy is structured, which is the way in which small businesses and investors own and arrange their property. That cannot be good. It might be defensible in the context of a reform package that was taken to an election and everyone understood up-front. It might be understandable in the context of the reform package which we have taken to the election, which everybody understands we have researched, and we have shown the modelling, and we can defend and explain exactly who is affected and how they are affected and how they will have time to make their arrangements, and this is how we are going to spend the money.

As a result of this, we are going to make sure that South Australia has an industry policy again that is going to make sure that the areas that can grow and employ will do so. It might be that the money will be spent properly educating our students at school, having been robbed by the end of Gonski, having had the public schools robbed by the hardwiring by the federal government in an agreement signed by this government that they will always be poorer than non-government schools. That could have been addressed as part of this package.

It could be that the government would say that not only are we going to spend the money that we are raising on economic growth, on industry policy and on making sure that our education system works well so that everyone has a chance to be part of this, we are also going to stop wasting money. We are also not only going to put it on small business that they have to tighten their belt, pay a bit more—it is okay, it is for the good of the government and it is for the good of the state—maybe we would not waste money on such things as cancelling the Port rail spur, spending $5 million not doing it, maybe we would not give eight rangers packages to stop working when we are recruiting rangers and maybe we would put the state first instead of the internal politics that seem to be driving this government apart.

The Hon. Z.L. BETTISON (Ramsay) (22:10): I rise to speak in opposition to the bill. Labor is opposing these Liberal land tax hikes for three reasons: the tax hikes will hurt local jobs, the tax hikes are unfair to small business and small investors and the tax hikes will drive up commercial and residential rents.

When he was in opposition, the Premier promised the South Australian people that he would, that they would, reduce land tax. In fact, the Premier was very, very clear about this, saying that he would 'take the axe to land tax in South Australia'. He said that a Liberal government would not impose sudden and discriminatory tax changes. Now that they are in government, they want to use land tax to generate additional revenue. Initially, it was $40 million, then $118 million and now $80 million. This is just another broken promise by the government.

It is important to remember that this proposal was not taken to the people of South Australia. What the people of South Australia heard was that land tax was going to be reduced. They were going to take an axe to land tax. If this reform was so important and going to be part of this term of government, why was this proposal not taken to the people? Be transparent, be clear to the people of South Australia. If this is so important to reform in this government, make sure that you are clear, make sure that you tell them what you intend to do.

Let's look at this Marshall Liberal government. They have had two budgets since being in power. They have already increased fees and charges. In fact, government fees went up 5 per cent this financial year—5 per cent—on everyday activities and services to South Australians. It is really interesting because we have fairly flat wages at the moment, so a 5 per cent increase is way off the mark. That is an incredible increase.

Let's not forget giving local government a bit of a kick in the guts to say, 'Yeah, I know we talked about you lowering rates.' You know what? Most of them tried very, very hard to relook at their budgets and do that, and then, surprise, surprise: bin tax. For all the good work that local government did, for all the listening local government did while they were being attacked, this last budget whacked them around the head and made every taxpayer pay additional money for this bin tax. Services have been slashed and, of course, the first budget announced the shutdown of Service SA centres. Not actually in this budget but soon after there was the privatisation of trains and trams announcement, despite the overwhelming evidence that it is not in the public interest to do so.

These are all decisions that make life more difficult for South Australians. What is even more galling is that not only did the government not take it to the election but it continues to refuse to release its modelling of these proposed changes to land tax. So all the cuts, first budget, second budget, plans to privatise, the biggest reform of all and they will not release the modelling. How can we believe them? How do South Australians feel about that? We have here before us a government that have broken their promise on the key things in their election platform, and we are being asked to listen and take their word for it that they have the modelling right.

The people of South Australia have every right to feel betrayed. They have every right to feel angry about the behaviour of this government. We know that these changes are driving up the everyday cost of living for South Australians but, more importantly, it is the stakeholders out there who are not being listened to. They are going to see the immediate impact of this land tax. The Master Builders Association of South Australia has said, 'We are concerned about the impact this will have on housing affordability and therefore job opportunities for tradies, apprentices and suppliers.' We know that the construction industry is doing it tough. I think the count is 10 construction companies that are no longer with us, that are bankrupt or that have gone into liquidation.

Business SA has said, 'The state government only introduced the land tax aggregation changes to fill a budget shortfall caused by lower GST growth.' There is no doubt that the land tax aggregation changes have caused a significant amount of uncertainty within the South Australian business community, and all this has been going on while we have shot up the leader board to have the highest unemployment across the nation. Is that really the time to bring increased uncertainty to our business community?

Those probably at the heart of it include people like the Real Estate Institute of South Australia, who say that this land tax increase will be crippling and devastating. They predict the reforms will bring a statewide devaluing of properties, a considerable increase in time on market and a massive upswing in vendor discounting and increasing rents, which will put undue financial and social pressures on tenants and renters.

Colliers, which is involved in commercial properties, says that 'any increases have a real potential to impact debt/equity positions, debt serviceability and short-term market liquidity, particularly for those assets that are lower yielding'. The MTA (the Motor Trade Association) says, 'Should the changes to land tax go through, it is likely to increase costs for your business, if you own multiple sites.'

If passed, this bill will increase costs for residents, businesses and investors. I heard from a senior real estate expert in my electorate who spoke about his concern with this bill. He said that already he sees potential purchasers of property stepping away from the market. They are concerned about the uncertainty. He is a senior person involved long term in real estate in South Australia who predominately sells in the north.

He says that the median rent in my electorate in the northern area is lower compared with other areas in metropolitan Adelaide. If the land tax burden goes up, those increasing costs will end up being passed on to renters. Once again, at a time of wage restraint you have already increased the cost of services to South Australians by 5 per cent when, in my constituency, they are still doing it tough. There is no discussion about the Northern Economic Plan because it is dead, and now they are going to put something in that will increase rent in the north as well.

I have also spoken to families who have worked hard together over many years so that they can save up to buy a second property. We know that these changes are going to impact on them, and no more so than the changes to land tax that will negatively impact many of the state's 22,000 self-funded retirees. Many of these South Australians are self-funded by superannuation based heavily on property ownership. I am particularly concerned about the impact on South Australians who have invested for their retirement through buying property.

It is easy to forget sitting here—and people of my age and younger may not remember—a time when we did not have compulsory super. It has not always been available for workers, so it is easy for us to forget how important building that nest egg, building that investment was for people planning for their retirement, planning for their future. In order for people to secure their future, they worked hard, and we know from our forums on land tax that people talked about how they missed out on time with their families to build a secure future. They missed out on taking them to sport and they missed out on time for holidays because they wanted to build an investment for the future.

Many people have touched on the particular impact on some of our World War II migrants. These people are part of our community and they came to Australia after a time of war. Many of them lost everything and from the time they came they worked hard—they worked hard for their families and they worked to build that property and build that security. I see this repeated again and again with new migrants who have chosen to make a life in our country. Whether they came here for safety, or because we needed their skills or for the lifestyle, I have seen this desire to make wealth and investment for their family's security over and over again.

In my own electorate, after 18 years in refugee camps the Bhutanese community have come here and established their lives, and many have chosen Salisbury as their home. It completely blew me away that in the less than 10 years they have been in South Australia the Bhutanese community, partnering with HomeStart, have purchased more than 100 homes. They purchased those homes because they wanted to set down roots here, they wanted stability and they wanted security. Property gives us that. Property is very important for that stability for our family.

But ultimately it is certainty that is at the core of every financial decision. Whenever an individual, a family or a business takes that leap to borrow, to build, to expand, they do so working within the taxation, planning and legal structures that exist. The retrospectivity of this bill destroys the very basis of the future that those mum-and-dad investors have made for themselves. They have not done anything wrong. They have not broken any laws, but you have made them feel like they are not pulling their weight and now you are making them pay.

The Marshall Liberal government is making all South Australians pay more. If you have invested in houses, the rent for your tenants will have to go up. If you rent, your rent will go up. If you are a business, how will you pay for this increase in land tax? Do you cut expenses? Do you cut workers? Do you cut apprentices? We hear the Premier say that many will be better off, but how do we know that if he has not released the modelling? The reality for many families who have invested in property is that they do not know how much more they will have to pay because this is policy on the run.

You have just heard the member for Port Adelaide talk about the concerns, the very real concerns, that were expressed. It is stress and it is fear. My very dear concern is about people who have focused on this as their way to secure their future. They know that cash flow is an issue for them. They are very proud of the fact that they have funded their own retirement.

The biggest question that I often used to hear from people was, 'I don't know how long I will live, so I don't know how much money I will need,' but they were very proud and very focused that they had saved hard, worked hard and invested for their future. What we have now, with this proposal, is stress and fear. Are they going to have to sell at a loss so that they can afford to pay the bill, or are they going to have to make the changes that they believed they would not have to make because they believed that they had invested for their future?

This government had five goes to get it right, but without the courtesy of talking to the Master Builders Association, Business SA, the Motor Trade Association or the Urban Development Institute of Australia before they announced their final change. Only the Property Council was privy to this change before they took it to the party room. What was the final agreement given, that only a moment ago the Property Council was saying that aggregation was a bulldozer to business confidence?

Last week, let us not forget that the Property Council suggested that perhaps it is best that that all property owners in South Australia pay for land tax: 'Let's broaden it out. Let everyone pay the same amount.' How is it that they flipped from this very strong position to suddenly doing a deal? These are questions that are unanswered. Let me tell you that, for the stakeholders I mentioned, the lack of courtesy to them will not be forgotten. How is it that you only chose to have an agreement with one group of stakeholders? How is that good government? How is that good decision-making?

The Marshall Liberal government, as we know, has changed its position on land tax about five times so far. Will it change again? Are we going to see some changes as it goes forward? It is this change, this uncertainty, that is doing harm. It is making investors nervous. A fairly senior person from one of the community groups said to me, 'We were just about to embark on a major redevelopment, and we've stopped because we don't know what the outcome will be.' If they have made that decision, how many other companies, how many other investors, have made the decision that South Australia is too risky to invest in because this government does not know what it is doing? It is making policy on the run.

Let's not forget that this government already has a bad record on the economy. Unemployment is now the second highest in Australia, at 6.3 per cent. State final demand has gone backwards for two consecutive quarters. South Australia has recorded the biggest fall in retail trade, and our national share of merchandise exports is at 30-year lows. Now the government is threatening to increase costs yet again.

Labor will oppose the Marshall Liberal government's unfair land tax hikes, which will hurt local jobs, hurt small business and drive up rents. We know that not everyone is in full agreement about this, because I am sure that people share my concern that certainty is the most important thing that a government can give when it is seeking security, seeking the desire for people to invest in our state. If you keep changing, it is too risky to invest in our state. You must give people certainty, and you must give them the courtesy of admitting that they have not done anything wrong and they do not have to continue to live in fear about this change.

The Hon. L.W.K. BIGNELL (Mawson) (22:30): I rise to oppose the Land Tax (Miscellaneous) Amendment Bill 2019. One of the things that we should all endeavour to do in this place is to make sure that people are treated fairly. When we look at what people have done in South Australia for decades, probably going back half a century, in the investment choices they have made they have acted fully within the law and within the rules that have been laid down over those many decades. So a government coming in and trying to retrospectively punish those people and bring about a huge impost—and we are talking about increases of 465 per cent, 2,352 per cent, 662 per cent, 1,065 per cent on their land tax rate charges—has to be seen as being totally unfair.

The Treasurer came with this package. Although he changed it five times himself, he would not allow anyone else to change it or, having removed the pin out of the hand grenade, he was going to let it go off and say that he would not accept any amendments, but there must have been a case for grandfathering people and small businesses that have made decisions about their investments over the past half century or so.

We have so many small family-operated businesses that have always acted within the law and acted on the best advice that they have received about the way they have invested for their future and their life after work. We have seen people, many of whom have been migrants who came to Australia after World War II, who have also made similar investment decisions based on the rules of the day. We have a Treasurer who has total disregard for those people and for those decisions that were made by them over these past few decades, and yet this same Treasurer did not think it would be a good idea to change the system of parliamentary superannuation and pension scheme that he is on, and we have had two changes to that scheme since he has been in here.

I note that he has been here since four years before the Speaker was born. He came in here the year the member for Cheltenham was born. He came in here six years before the member for Colton was born, another MP whose constituents are not happy with this government decision. How can it be fair for a Treasurer who has his superannuation, his pension, all lined up, to keep that in place but think it is okay just to rip the rug out from other people who have made a similar decision, maybe back in 1982, which was the year that the Treasurer came into parliament?

That is the thing that I think most people are aggrieved by in this: there was no suggestion of grandfathering this in any way. There was no suggestion of being fair to these small businesses or these people who have made choices—as I said, perfectly legal choices—to set up their financial security for after the day they stop working. These people have worked very, very hard. Day in, day out they have sacrificed time with their families. They have sacrificed lots of things that they could have done, because they wanted to make sure that they could guarantee their future and their life after work.

So the Treasurer has racked his up; he is all good. He has a fantastic pension scheme. We have an okay pension scheme, but do you know what? Before I came in here in 2006, the rules had been changed in 2004. Everyone who has come in since 2004 knew what the rules were, and we are never complaining about what we are getting compared with what happened in the past because that is what the rules are when you put your hand up to come into a place. Okay, some people might be complaining. I see some raised eyebrows. We knew what the rules were, and we made a decision based on what the rules of the day were.

If you wanted to bring this in and say, 'This applies to everyone after 2019,' that might be fair enough, but to hit all these people who made decisions in 1982 or before or after 1982 based on what they were lawfully allowed to do is totally unfair. We have seen a pattern of things that are unfair from this government. We have seen a government that has taken away the concession for people on Kangaroo Island that they have on their motor vehicle registration. The Liberal government have taken half of the 50 per cent reduction away this year, and they will take the full concession away next year. That is hitting farmers, tourism operators and individuals very hard.

There are other examples. The road safety group on Kangaroo Island used to get a $500 a year administration grant, and that was taken away. If you look at all these road safety groups around South Australia, I think it added up to about $14,000 or $15,000. I wrote to the Premier, and thankfully he reversed that, and I am very grateful, as are the road safety committee members on Kangaroo Island. But, at the end of the day, you cannot just keep cutting, cutting, cutting and hurting people. You actually have to care for people as well for so many different reasons. I think that this proposal is just going to hurt another group of South Australians.

It is almost like the Liberal Party do not mind who they hurt and who they offend and who they upset. They do not mind if they are upsetting and hurting the Liberal supporters, the Labor supporters, the big people, the small people. These people would start a fight in an empty room. In fact, the cabinet have started a fight in their own party room. Instead of listening to what their backbench has been telling them—because I am sure the backbenchers in the Liberal Party are hearing the same thing as we backbenchers in the Labor Party, who are out there and on the ground—it is, 'No, we know better. We're going to crash through.' They have tweaked it five times, but when have they been out to talk to the public, like our leader, the member for Croydon, who has held forums and actually listened to what South Australians think about this?

It is very easy to be sitting around the cabinet table and looking at very harsh black and white figures, but at the end of the day we are the representatives of the people and we need to listen to what it is that those people want. I congratulate the leader and I congratulate our shadow treasurer and all the other members of our shadow cabinet who have taken the time and put in the effort to go out and have these forums.

I know they have been out in the Speaker's patch, I know they have been down in the member for Colton's patch, and I have to say there are a lot of unhappy people there. The feedback that we have been getting from people in Liberal-held seats and Labor-held seats is that this is a government that is out of touch and just wants to hurt all South Australians by cutting and not caring.

The member for Hammond mentioned before that there should be an equitable system across the state. I am not suggesting the member for Hammond put it this way, but if we wanted to have an equitable system across the state for land tax—and I am not proposing this, and I know the member for Hammond did not—

An honourable member interjecting:

The Hon. L.W.K. BIGNELL: I am not going to misquote you, member for Hammond, but if you are going to have an equitable system, none of our farmers pay land tax. There are already different rules for different cohorts within our society when it comes to land tax. I am not advocating for farmers to pay land tax—I want to put that on the record—and nor was the member for Hammond advocating that. It is easy to say we need an equitable system, but we already have a lot of differences out there because people, like farmers, are playing by the rules. For people like self-funded retirees and small business people who have made very legal, very proper decisions on their investment priorities over many decades, that is their choice.

For those of us who were lucky enough to be of a generation post Paul Keating and Bob Hawke, we have pretty good superannuation. We should all be very grateful that we can have a reasonably—

The Hon. D.C. van Holst Pellekaan: It's not about your superannuation.

The Hon. L.W.K. BIGNELL: I am not talking about my superannuation; I am talking about all South Australians' superannuation because of the compulsory contribution that came in, and I think that is a great thing. However, people made decisions before those changes were made and they have continued to make those sorts of decisions.

Retrospective changes are never popular. I think the Labor Party learned at the last federal election. It seems the leadership of the Liberal Party has a tin ear when it comes to listening to what the people want. Where has all the money from the state budget gone? We had $20 million in there for fishers. That was meant to come in from 1 July this year to buy back one-third, or about 100 commercial fishing licences. That money just evaporated into thin air. Instead of having $20 million to buy back commercial fishing licences, it has been taken; it has gone into general revenue somewhere.

We do not know where it has gone. It certainly has not gone into the fishing sector. What do we get instead of that? From this week, we will have a three-year ban on fishing for snapper. I tell you what, that is having a huge impact on people at Cape Jervis, Rapid Bay, Aldinga and all around Kangaroo Island. It is just another example of the cruel cuts we are seeing from this Liberal government.

As I said before, people are wondering what group the government has not attacked because it seems that everyone is being hurt by this government. Governments have a role to nurture, to care for and to look after the people they are elected to represent. I think it is a pretty sad day when cuts are so severe that a person in McLaren Vale having very big difficulties breathing rings 000 and says, 'I can't breathe,' is told they will have to wait 23 minutes for an ambulance to be dispatched. No-one has seen the sort of ramping that we have in South Australia. It is unprecedented and it is unacceptable.

Here we have a government that is hurting all these people and at the same time delivering nothing, delivering no better services to anyone. People in McLaren Vale, Aldinga, Kangaroo Island and Rapid Bay are having a hard time grappling with what it is that this government is meant to be doing for them. It came in with lots of promises, such as, 'There are going to be no tax increases. We're going to reduce the taxes.' Well, they have not; they have brought this huge impost. As I said before, some people are paying 465 per cent more. Some will pay 2,352 per cent more, some will pay 662 per cent more and some will pay 1,065 per cent more. That is a crazy impost on people who have made choices under a system that has been legal for as long as most people in this place have been alive.

This government's motto should be 'all cuts and no care'. I think the front bench of the Liberal Party should start listening to the backbench of the Liberal Party because I know there are a lot of people over there who are quite concerned and they are passing on the feedback that they are getting from their electorates, just like we are here. We embarked on a listening exercise. We went out to find what people thought about these changes. The overwhelming response was that they were totally unfair.

As I said, we are seeing people being hit in all sorts of different ways. In the search for whatever it is that this Treasurer is seeking, he hurts people; he hurts South Australians. My plea to this government is to stop the hurt and start the listening. They need to get out there and talk to people, and not break their promises like they did on this one about not increasing any taxes, because what they are doing is hitting and hurting small businesses and families.

Small businesses employ a lot more people than the big banks in South Australia, yet we saw in the last parliament when we tried to introduce a bank tax that would have resulted in $91 million coming into our coffers—$91 million that we could have spent wisely on caring, supporting and nurturing the people of South Australia. That $91 million would have perhaps helped with some of these issues that the present government is now creating. But instead of siding with the people of South Australia, the Liberal Party sided with the five big banks. It is a pretty deplorable thing when a government turns its back on the people it is elected to represent and actually looks after banks that are all based in Sydney and Melbourne.

People in my area who still cannot get bank loans to expand their small business or to start their small business are still outraged that that bank tax was thwarted by the Liberal Party of South Australia. But they are happy to go and pick on the small business people who have made legal investments over the years. They want to call them 'rorters' and say they are using loopholes. No, they have just been investing, as they have been able to do for at least 50 years.

We stand side by side with small businesses in South Australia, and we always have. We stand side by side with that cohort of people who have made investment decisions to buy multiple properties to look after themselves and their families in retirement so that they are not drawing on a pension from the government. They do not want to be a burden. They think that they should look after themselves, and they have very proudly set up their financial affairs for post-work or post-business so that they can do that. The Treasurer, who has never contemplated changing the system so his pension goes to our pension system, is happy to take away their rights and penalise them for something that they have lawfully been able to do.

To the small businesses in my area, to those people who have made investments in my area, we, the Labor Party, have listened to what you have told us, and we are in here opposing this measure by the Liberal Party. It is a measure that I know a number of Liberal Party members in here and in the wider community also oppose. You may have appeased Daniel Gannon at the Property Council, but I am not sure you have appeased everyone within the Property Council. This state has a population of over 1½ million people, so you should not actually be dictated to by Daniel Gannon.

You should actually get out there and listen to what all the people in this state have to say—people who perhaps voted for Liberal candidates and who said that they would be better off with the land tax reductions that the Liberal Party promised at the last election. I have to say that all of the feedback we are getting from our seats—that is, the Labor seats and the Liberal seats, and particularly some of the Liberal seats where there is a high concentration of people and families who have made big investments in a couple of properties to make sure that they are okay after their working life—is red-hot anger against the Liberal Party of South Australia.

The Premier and the Treasurer and his front bench have a tin ear; they do not care. They are all cuts and no care. We will stand up for the people of South Australia. We will make sure that if people have lawfully made an investment in something in South Australia then we are not going to punish them because people are not there to be punished, they are there to be supported, they are there to be nurtured. As I said at the outset, I oppose this bill, the Land Tax (Miscellaneous) Amendment Bill 2019.

Mr ODENWALDER (Elizabeth) (22:50): I rise to oppose the Land Tax (Miscellaneous) Amendment Bill 2019. As the member for Kaurna pointed out, it is quite a benignly named bill, really, considering the angst it has caused out there in the community. I should start by declaring my own interests. Others have declared interests in their various landholdings. I note the member for—help me out—

Mr Pederick: Hammond.

Mr ODENWALDER: —Hammond, made a contribution to that effect.

Mr Pederick: So you are a land magnate?

Mr ODENWALDER: Well, no—quite the opposite, in fact. You want to check my register, member for Hammond. Others have—

Mr PICTON: Sorry to interrupt. I draw your attention to the state of the house.

A quorum having been formed:

Mr ODENWALDER: It is nice to have an audience.

Mr Pederick: It's not going to last!

Mr ODENWALDER: It's not going to last. I thought I would declare my interests, or lack thereof, in land. As far as I am aware, as far as history tells us, the Odenwalders have owned very little land of any value over the years, and indeed I do not know of any Odenwalders who have owned more than one property at one time. I stand to be corrected, but I believe my parents are the first Odenwalders in recorded history to have owned any interest in land at all in the house that they still live in in Elizabeth Downs, which they bought in 1982 for around $30,000. Having declared my interests, as others have, I will continue with my contribution to this debate.

After months and months of confusion and delay, here we are, finally debating the Land Tax (Miscellaneous) Amendment Bill. Today, on this side of the house we witnessed the extraordinary scene of the Premier of this state accusing our leader, the member for Croydon, Leader of the Opposition, of only just arriving at a position on this bill. He was accused of sitting on the fence. We were accused of sitting on the fence, of being afraid of reform. As other members have outlined, this bill has been through at least five iterations over the last several months, since it first peeked its head out from the budget speech of the Treasurer in this place several months ago. The hypocrisy is breathtaking.

I do not make a habit of commenting on our party room discussions, our shadow cabinet discussions, but it is fair to say that we have discussed this measure many, many times in various different ways. However, unlike the government, we discussed it publicly. We held public forums that were open to the media, the public and Liberal Party apparatchiks, if they chose to turn up, and I believe that on various occasions they did.

We all remember the forlorn figure of the member for West Torrens outside the Liberal Party's own land tax forum, hoping to get in, like the media, but of course it was closed. It was closed. The members opposite did not want a public discussion. They certainly did not want the member for West Torrens there, although I can hardly blame them for that, but they did not want the media there. They did not want members of the public there to genuinely express their opinions.

Unlike the government, during the course of our consultations we listened. It is worth going back on the history of the Labor Party in opposition over the last year and a half or so. We have listened and we have made a point of listening. The leader has made a point of visiting all 47 seats across our state. We have held various shadow country cabinets and we have listened and we have engaged. I have been at various shadow country cabinets and on various visits to electorates throughout the state. There has been a genuine desire to engage and listen to the electorate, and we have not seen that from those members opposite.

We did listen and the leader, the member for Lee and others went through in quite a lot of detail what those people said at the forums that were held throughout the metropolitan area in the lead-up to this debate in a genuine attempt to hear what people had to say and to hear what their concerns were. These were what we colloquially call mum-and-dad investors. There were people who were angry. They were livid.

We heard a bit about migrants from the member for West Torrens, the member for Lee and others. I thought the member for Port Adelaide made a good contribution. These are people who see property as real estate. They see it as something they can touch, something they can pass on to their children, something that is very difficult, one would have thought, for the government to take off them, and they are seeing that promise evaporate under this government.

Of course, there are small business people whom the Liberal Party often purport to represent. These are people who have hitherto legitimately organised their affairs to minimise the amount of tax that Rob Lucas can take off them. They are legitimately concerned and appalled. As the member for Lee and others have pointed out, these people are natural Liberal voters. There is nothing wrong with that. People vote according to what they believe. People vote for the people who they think will advocate for them most successfully. Many of these people are natural Liberal voters. Whether they continue to vote Liberal or not remains to be seen, and in many ways that is not the important point, but they are natural Liberal voters.

Here we have the member for Croydon, the leader of the Australian Labor Party in South Australia, with the member for Lee, sitting down with these people and listening to them and deciding to represent them and advocate for them as real people with real concerns. These are people who are expressing that they are caught up in an unfair and retrospective tax grab brought to them by the political party that purports to represent them and went to the election purporting to represent them. But first and foremost, Mr Speaker—I forgot your name there, sir—this is a broken promise.

Ms Hildyard: It's late. It's very late.

Mr ODENWALDER: It is late. This is a broken promise and, as I said, the scale of this broken promise was revealed in the Treasurer's budget speech earlier this year.

The Hon. V.A. Chapman: Have you all got the same speech notes?

Mr ODENWALDER: Me and who?

Members interjecting:

The SPEAKER: The member for Waite will not interject from the Premier's seat.

Mr ODENWALDER: The member for Waite admits that he started listening. You should have listened before. You should have started listening before.

Mr Duluk: Why are you responding to my interjections? I'm not even in my seat.

Mr ODENWALDER: It's your time, sir! It was not front page in the budget, it was not loudly announced, there were no balloons and streamers when the Treasurer announced this measure because he knew that it was a broken promise. It was hidden away as an afterthought towards the back end of the Treasurer's speech. However, he made no bones about what the intention was. He said these were targeted measures to crack down on individuals and companies who have reduced their land tax bills. These were not tax cuts, as the Premier promised. This was a crackdown on individuals and companies who had reduced their land tax bills.

These were fighting words, and these words were heard loud and clear in the eastern suburbs, in Campbelltown, in Norwood, in St Peters and Walkerville, in Burnside and in Unley Park. They were also heard in Adelaide and the inner west and also in seats like Colton along our beautiful coast. We know they were heard because they told us. They told us at these forums, these mums and dads we talked about, these migrants, these small business people—they told us—and, unlike those opposite, we listened. But what is surprising is that there are those on that side of the house who purport to represent a lot of these people who have not only refused to listen but have stayed largely silent in the face of their leadership.

What is the view of the member for Adelaide? The member for Adelaide has been silent throughout this debate, yet she represents a community, a state district with the largest number of small businesses, I would assume, in the state. Has she spoken to her small business community? Has she spoken to the traders in the city? Has she spoken to the O'Connell Street association or the Melbourne Street traders' association? Has she spoken to the people who are investing in the property markets in places like Walkerville, North Adelaide, Prospect and Gilberton? These are the highest growth places in metropolitan Adelaide, with median prices well into seven figures. Has she consulted with these people at all? If she has, what has she told her party room, what has she told the parliament, what has she said publicly? Nothing, I would assume—nothing—certainly not publicly.

We can say the same things about the member for Colton, the member for Morialta, the member for Gibson and even the Premier. I know that the Minister for Education and, indeed, you, sir, represent a seat with a high number of Italian constituents. In your favour, I would say that you are deeply embedded in the Italian community, as the member for Morialta claims to be. You must be hearing what I am hearing. I am not embedded in the Italian community. My constituents are in the northern suburbs. You must be hearing what I am hearing. You must be hearing it and the Minister for Education must be hearing it. I do not know why nobody on your side is listening.

I talk about my constituency in Elizabeth and in the surrounding suburbs, in Ramsay, in Taylor and in parts of Light. We have a very high rate of rental properties up there. There are many people who cannot afford to even begin to enter the housing market at all and they are forced into the rental market. As a result, these suburbs represent an opportunity for investors. There is nothing wrong with that. Sometimes there are significant numbers of rental properties in one portfolio, whether or not it is aggregated. One can assume that many of these investors have arranged their affairs so as to minimise their tax. Again, this is perfectly legitimate and perfectly legal.

Those investors will look at these measures and they will make again perfectly reasonable, legal, legitimate decisions to arrange their affairs such that their incomes do not drop significantly. They cannot do that in any other way than to raise the rents for my constituents who are forced, as I said, onto the property market. They will jack up the rents. They have no choice, they will jack up the rents. In order to continue to realise their investments they will jack up the rents. There is no doubt about it. They will pass on the pain to people in my constituency, to people in Ramsay, to people in Light and, I can only assume, to people in places like Kaurna and Reynell where there are similar situations.

The Housing Trust, as we know, is stretched to the point that getting onto category 1 is a distant dream. We all know that in electorates like mine, where Housing Trust tenancy is very high, it is a distant dream for many people to be even considered for a Housing Trust property to get onto category 1. I have people in my office every day trying to get onto category 1, and we have to be honest with them that there are just not enough places for people. They are being forced onto private rental and, if these measures pass, we will see those private rental properties significantly increase in rent.

A constituent, Jack, comes to mind. He contacts me fairly regularly. I believe he was briefly a media star. He witnessed a murder in his block of units in Elizabeth not so long ago. He has a new baby and lives in a unit with his elderly mum. He wants to be moved. He wants to be put on category 1 in the Housing Trust so he can move, but he cannot move. He simply cannot move. There simply are no category 1 places to fulfil the need. Everyone who deals with the Housing Trust knows this.

These people are forced to either live where they do and put up with circumstances that they find inadequate or else move on to private rental. There is assistance for private rental, but it is often inadequate. I believe that the measures we are discussing here today will, in the ways that I have discussed, force up the rents in private rental properties across the northern suburbs, where there is a significant amount of rental property. The rental returns are very good, and that is why people have chosen to invest there.

People have chosen to have quite significant portfolios up there because there is a need and the rental returns are good. As I said, this will force those rents to be jacked up, and the Marshall Liberal government clearly does not care. This is a broken promise in every sense. The Premier went to the election promising lower costs, but tell that to Jack, who I just discussed. Tell that to a single mum in Elizabeth Downs struggling to make ends meet. She now has to find an extra $10, $20 or $30 a week just to pay the rent, just to pay for this tax, but they do not care.

We will oppose this bill for the reasons outlined by the member for Lee, the leader and others, not because it is convenient politically. It is quite the opposite: we will oppose it because it is the right thing to do. Unlike those opposite, we are driven by a set of values. One of those values is that when you say you are going to do something, you do it, and when you say you are not going to do something, you do not do it. Another value, as outlined by the leader, is a belief in the dignity and value of work. This bill punishes that. It punishes small business. As we have heard at these forums, it will force people either to lay people off or reconsider their decisions to hire more people. It will damage jobs in the state at the very time we do not need that sort of damage.

If we find ourselves in government in 2½ years' time—and I believe that we can and we will—it is my view, and I know it is the view of the leader, the shadow cabinet and our whole party room, that we will govern for all South Australians. This is what Steven Marshall promised and what the Liberals promised. This is what governments often promise in opposition, but we have demonstrated, throughout our year and a half of opposition so far, that we are listening in the ways that I have outlined. It is also demonstrated today by our opposition to this bill, which is not politically expedient: it is the right thing to do.

We will govern guided by values, not by ideology, unlike those opposite. We know that they cannot keep a promise. For instance, we know the promise that they did not have a privatisation agenda. We have all seen the footage of the Premier promising that they did not have a privatisation agenda. That did not last very long. The first big broken promise in that area was in my own portfolio area with the sale of the Adelaide Remand Centre to Serco, which the government in their press release coyly referred to as a 'justice service provider'. They are in fact a huge multinational company with interests in many areas, including detention centres and prisons. Their track record in corrections and detention centres is well documented and very far from inspiring.

I will not go over the detail here, but we saw, for instance in Queensland, Serco's performance was so bad, so suspect, that following a damning independent report the government decided to rip up the contract it had with Serco for prison services and renationalise the site. Not only is this government breaking promises, they are breaking them very badly.

As to the trains and trams, again, there was no mention of this before the election—indeed, there was a promise not to have a privatisation agenda. I lived through my dad losing his job with the state transport authority in the late 90s when that was privatised by the then Liberal government. He still tells stories of his friends, young men, mostly men, with young families who went on the dole or tried to find another job somewhere else or accepted the lower working conditions, the lower wages, that the private companies that took over from the state transport authority were offering at the time—not a very pretty story for a lot of those people.

So this is what Liberals do. This is what they do. This time they tried to hide it. This time they said, 'We don't have a privatisation agenda, we will lower costs, we will lower the land tax rate.' All of those things proved not to be true. After months of confusion and delay we find ourselves here, we find ourselves quite late at night still debating this bill. I hope that it does not pass. I hope that some of those members opposite who represent constituencies with some of the people that we have spoken to and heard their stories will see the error of their ways and will join us in opposing this bill and exposing it for the farce that it is.

Ms HILDYARD (Reynell) (23:11): I rise to speak to this Land Tax (Miscellaneous) Amendment Bill 2019. Our democracy is fundamentally built on and relies on people in this place, and people wanting to represent their community in this place, articulating and taking a transparent and comprehensive platform to the South Australian people at a general election. When they are privileged enough to receive the public's endorsement for that platform and to be sworn in to serve our South Australian community as a government, it is utterly incumbent upon them to do their best to take that platform and to bring the vision within it to life, to ensure that it underpins all that they do. That is the right and the fair thing to do, it is at the core of our democracy.

What brings this government into disrepute is their lack of transparency, their portrayal of their platform in a particular way before the election and then doing both the opposite to what they articulated in that platform and also introducing a range of measures, including this one, never taken to last year's election at all.

We can all remember the so-called platform that those opposite did take to the last election. Alarmingly, there was not much to it after 16 years of opposition. It was more of a mantra, a very clear mantra and message plastered all over leaflets, corflutes, TV ads, T-shirts and any place they could get their hands and stickers on, sent to South Australian people. It was more jobs, lower costs, better services. 'More jobs, lower costs, better services,' they said, repeatedly everywhere they could.

This bill, and so many of the measures that they have heartlessly introduced since coming into office, fail on all three counts. This government has comprehensively broken all those promises. They have utterly failed to deliver on their mantra, and they have failed the people of South Australia. More jobs? We have had unprecedented rates of unemployment since this government took office. We have watched in horror as job creation programs have been slashed.

We have seen, as our leader articulated earlier, an utter disregard for the dignity that comes with working hard and being adequately rewarded for that work, and now we have this measure, a measure that will drive down investment and further reduce jobs in the property sector and in other sectors—a measure which has the potential to hit those South Australians on low or stagnant incomes, employed in insecure work, who are already struggling with the cost of living with higher rent costs.

It is a situation and a measure that sit alongside an unprecedented and heartless hike in fees and charges by those opposite. It is a hike in fees, levies and charges which flies in the face of their lower cost promise, which demonstrates their cruel disregard for just how tough it is for so many families. It is a hike in fees and charges that will be felt by cleaners, nurses and administrators arriving for work at one of our hospitals, local tradespeople, families heading to the footy or The Fringe on the train or the bus for a day out. It is a hike which will be felt by a family buying their school-age children a new Metrocard to get to school, to their part-time job, wherever they need to go.

It is a measure which also sits alongside their broken promise in relation to better services, as South Australians listen in horror to the plans of those opposite to close Service SA centres, to sell off our train and tram network, to slash hundreds of SA Health jobs. It is a measure that threatens to have investors bailing at a time of economic uncertainty and flagging confidence, at a time when we need those investors the most.

Sadly, I and many South Australians do not expect anything better from this government because they just keep letting people down over and over again. They just keep acting in a way that is bereft of any concept of fairness, any concept of just how hard people work to make ends meet and to build a future for themselves, bereft of understanding the day-to-day lives of South Australians and what matters to them, what they work towards and aspire to, what makes a difference to them and what enables them to live their best life, a decent life.

How should the people who voted for this government feel now, having believed that they would produce better quality services, reduce the cost to them and their families and communities and create economic stimulus and jobs? They have been completely let down by this government. How should South Australians feel now that they have been told one thing, only to find out that in reality this government is doing the exact opposite? It is breaking their flimsy oft-repeated promises, or should I say slogans, to them. They have every right to feel disappointed, let down and to feel as if they were not told the truth before the election. They were deceived.

Did those opposite develop and produce this land tax plan prior to the 2018 election? Was this tax increase lurking in the back of the Treasurer's mind—

Mr Duluk interjecting:

The SPEAKER: The member for Waite will cease interjecting out of his seat.

Mr Brown interjecting:

The SPEAKER: Member for Playford, be quiet!

Ms HILDYARD: —in the mind of the Treasurer who seems to be running this government? Was it lurking in the recesses of his mind, waiting to be unleashed on an unsuspecting South Australian public? Was it written down the bottom of a document somewhere, perhaps marked with an asterisk saying, 'Subject this to massive land tax hikes'? Maybe it was. I am not sure exactly which version may have been dreamed up and when—version 1, 2, 3, 4 or 5—but they absolutely did not ever openly share these thoughts and plans, not any of their multiple versions of them, with the South Australian people. Through their lack of transparency, they have let hardworking South Australian families down.

These are families who work hard and have invested in property, who have planned their future retirement and their family's future around that investment. They are families who also work incredibly hard and rent properties from them. They are families who may not be able to afford the increase in rents that those who will face the brunt of this measure have indicated they may need to pass on.

They are families I know, families I deeply care about, who are friends, who I am proud to represent, who devote their time and energy to local sporting clubs, music groups, volunteering at their kids' schools. They are families who struggle to pay the rent, buy the groceries, the nappies, the school uniform, the birthday gift. They are families whose budgets are so carefully, strategically and tightly planned that they will suffer with even the smallest of increases to their rent.

Recently, I had the pleasure of speaking with a lovely family in Hartley, a couple who, on moving to South Australia, invested in a fruit and vegetable shop, not a huge shop but a shop from which they earned their living for many, many years. They worked hard, very hard, to make that shop successful. They also invested in residential property, not a huge portfolio, but property to see them through until their retirement, during their retirement and to provide for their three adult daughters, (two of whom I had the pleasure of speaking with also) to help them get a start in life, women who were very deeply worried about their parents and about the stress that this measure had caused to them and their future.

How is it fair to change the rules on these people—people who worked so hard all their lives to make ends meet, to save for their retirement through property investment, who made decisions according to the law and who planned for a future based on those rules that they fastidiously adhered to? They chose to build their family's future via property, rather than through superannuation and other savings. This was a sound and reasonable decision made by them many years ago as they started their working lives and started their family in our state—a decision that they and their daughters relied on, a decision that they planned their future around that meant they could proudly fund their own retirement.

Through my work as a shadow minister, I have had the deep privilege of constantly meeting and getting to know people from a variety of backgrounds who chose to do this, and I have had the privilege of many of them sharing their stories with me. In fact, it is very fair to say that many of them have absolutely been busting to share their stories with me, crossing rooms, running across rooms and calling me—people who have scrimped, saved and undertaken backbreaking work to purchase and keep assets and property for security and for safety, people who have worked hard towards their dream of owning property and enjoying a secure retirement and towards the pleasure of being able to contribute to the lives of their children and grandchildren and their future.

These people made their plans over many years, believing in the security that comes with bricks and mortar, making personal and business decisions according to the rules of the day. They will now be paying thousands and thousands of dollars more in taxes to this government. This hurts them, this hurts their future and they feel utterly betrayed.

Can the Premier explain why these families have to wear this budget measure that was never, never explained to them, that will punish them, not the big end of town, not those who own the whole shopping centre, but those who own the local fruit and vegetable shop taking up just a small corner of that shopping centre, people who had an aspiration and arranged their affairs to achieve that aspiration? Can those opposite explain why, despite receiving multiple representations from South Australians about how this measure will hurt them, their family and their business, they refused to listen? I have heard—

Members interjecting:

The SPEAKER: Order! Members on my left and right, be quiet! This has nothing to do with the member for West Torrens. The member for Reynell has the call.

Ms HILDYARD: Thank you very much, Mr Speaker. I have heard many members opposite speak about having had representations from people about this measure. Instead of these members listening and standing up for them, these members have chosen not to fight but to acquiesce to a strategy that is all about this government coming after these people and those who may rent a property from them. Submission after submission from South Australians on the government's own website sets out the incredibly negative impact that this measure will have on them and on our state for decades.

In those submissions, some people talk about being enraged by its introduction and others lament that their contribution to our state over many years seems to be sadly and cruelly dismissed and disregarded. Many include very well thought-through and prepared tables that very clearly set out how much more they will have to pay, and those figures, those tables, are both compelling and alarming.

Many who have made submissions rightly decry the fact that their hard work and their playing by the rules seem to be disregarded, and others speak about the risks to employment of young people and others and to the economic and social future of our state that will come about as a result of this measure. However, they are not being heard. Those opposite are not listening, and they are certainly not fighting for these people.

I expected more and I expected better, not from those on the front bench but definitely from some of those on the backbench, who I thought might think differently from what is articulated in any one of the many versions of this policy, who might actually care about those this impacts, those this hurts. It is shameful, and this is from a party that goes on a lot and often about supporting small business owners, supporting family businesses and supporting people wanting to have a go. Frankly, at first glance it is bizarre.

Given the track record of those opposite and their very cosy relationship with particular sections of the very, very big end of town, which may benefit from this measure, perhaps it is not just bizarre but also a very direct reflection of who this government values and who they do not, who they will protect and who they will not, who they are interested in and who they are not, who they will listen to and who they do not listen to, who they will fight for and who they will not fight for.

So many families, both property owners and renters of those properties, will, because of this government, have no choice but to struggle further and reduce any spending they can often ill afford in our already struggling retail, hospitality and other small business sectors. Those who own the properties face increased costs from a few hundred dollars per annum to thousands and thousands, and those who rent their properties face an even harder battle, a harder struggle, to make ends meet.

This government can never explain away nor justify their lack of honesty and transparency in bringing in this legislation. They did not take it to an election; in fact, just before the last election they promised not to increase taxes and spoke about the risks to confidence in our state of doing so. They lied. This bill represents another broken promise. This bill is unfair. It fundamentally treats people unfairly. This bill disregards the rules that people have diligently followed over many years to build their future. This bill hurts people, and that is why I do not and cannot support it.

Ms COOK (Hurtle Vale) (23:28): I rise to speak—I am sure it will be no surprise to the house—in opposition to this bill. This bill has been complete chaos and a shemozzle since the outset.

I might have let the cat out of the bag about knowing a little bit more about a few things when we took out the quiz night a few weeks ago, the Eastern Domestic Violence quiz night, when I ably led my table to victory. However, members might be surprised that I am now an expert in land tax, so strap yourselves in and get your Milo or your cup of tea, away I go.

To be completely transparent, I remind members that I do have one investment property, which does have a mortgage attached. Because I own this particular investment property, under the Lucas land tax version 5 still, I think, I would be approximately $300 a year better off. I do not take my personal situation into account at all in making this contribution, but I feel it is right to make it clear that potentially I am a beneficiary.

In the 2018-19 state budget, we saw changes made initially that increased the tax-free threshold for land tax to $450,000—seemingly fair for mum-and-dad investors, for modest investors. We also saw a reduction in the top marginal tax rate of 3.7 per cent to 2.9 per cent and setting a new lower tax threshold meant investors with much bigger portfolios could access the lower tax rate sooner. This benefits those with bigger portfolios, bigger end of town investors.

We heard that the changes were going to cost the budget some $47.2 million from the next financial year 2020-21 when the changes were slated to come into effect, then around $48.7 million the following year. On balance, however, given how awful a Liberal government potentially could be to average South Australians, we felt it was acceptable. This land tax deal was then stamped as delivered in respect of the election commitment to lower land tax, all part of the more jobs, lower costs and better services promises seen throughout the 2018 election campaign.

Then, just like all good cheap rubbish deals, there was more. We saw only nine months later, in this year's budget, more changes: aggregation. What is this? Well, for decades, mum-and-dad investors, working families and hardworking small businesses have worked to the rules in terms of their investments. It was the done thing that people with land interests across different ownerships in name, in company or in family trust would see their properties now aggregated—judged and tax as a group—not the same conditions as these hardworking Australians had set up themselves.

There was now going to be a difference: land tax could now be levied on the combined value of their portfolios, their landholdings. Ouch! No retrospective acknowledgement, no grandfathering. That is the zinger right there, right between the eyes. The Treasurer did not care. Just to be clear, these people who set up their arrangements under previous rules would not get anywhere near these tax rates. Land tax was applied separately to each ownership. The valuation did not occur with the holdings grouped together. Remember folks, this is all part of the more jobs, lower costs and better services promises made by the Liberal opposition leading up to the March 2018 election.

We then find out that these aggregation measures were estimated to raise $40 million, nearly as much as the revenue that was given back to taxpayers in the 2018-19 budget. What the Liberals giveth, the Liberals taketh away so it seems. It seems that to offset some of the increased tax burden, we then saw the budget further reduce the top marginal rate over time, a little 0.1 per cent per annum, I think it was over seven years from memory.

'Celebrate,' they say. 'Be thankful,' they say. Well, yes, if you are a big investor you will be getting a little bit extra in your pocket money. But hang on, we hear noise, big noise from a wide range of people, mostly about aggregation. And wait, surely these fine financial managers, these fiscal geniuses—the Liberal Party—could not have made a calculation error, could they? Well, yes they could. We saw a revised revenue forecast for the aggregation measure to $118 million. 'Nothing to see here,' they said. 'Oops, only $78 million more than the estimated $40 million.'

We heard there would be far more than the estimated 4,300 individuals and something like 2,500 companies initially claimed as being impacted by the government. Then there was more. I think we are up to version 3. In early September, we saw the release of a draft bill. Finally we had something to take to the people for consultation. There were more changes to aggregation, more changes to how companies could be grouped together for land tax purposes and the introduction of surcharges.

What on earth was happening? There was confusion, chaos, a shemozzle. We saw changes again to top thresholds, changes to the top marginal land tax rates, etc. I am not sure whether it was around this time that we were reassured by the Premier that there would be no more changes, that the entire Liberal Party room was in lockstep behind the Premier and the Treasurer. I cannot quite recall when these wild statements were made, but remember: we were talking about version 3, I think, and I reckon that we are up to version 5, so somewhere in there were changes.

Whatever the end result of the consultations with people in their electorates and whatever the end result of the consultation with stakeholders, it is interesting that we have really only seen a shift in the attitude of one of the major opponents to the land tax reforms. The Property Council—Daniel Gannon—has suddenly gone from being the government's public enemy number one to being besties again. The boss is back, being chummy with his old boss.

We heard that the Property Council had explored a whole range of alternatives in its submission to the government. Many made sense, of course. They talked about postponing the changes until the statewide revaluation of land values is complete. I do not think we really know the full extent of these revaluations. What sort of a hit to punters is this going to be? Strap in, I say.

The Property Council openly floated the idea of grandfathering the land tax arrangements for existing taxpayers, as well as also discussing flattened-out tax structures. Business SA also wanted the process to be halted until the revaluation was complete. I think they predict a nice, big sugar hit coming to the government so that the grandfathering arrangement of land tax changes could then perhaps be put into place. This is clearly more affordable, maybe?

The Real Estate Institute were very vocal in their opposition to the bill, also calling for a delay in the process while the revaluation initiative was completed. We heard words like 'crippling' and 'devastating' being used in relation to the effect on the South Australian real estate market. It is pretty shocking language, to be honest. Given the terrible rate of collapse of local builders, it is really no surprise that the Master Builders are also not supportive of changes of this magnitude.

It is worth noting, though, that many people in the social sector do support the notion of this tax reform, given the magnitude of the revenue potential. I have had many conversations about the value that this revenue could bring if invested back into public and community housing. Sadly, I do not see a Liberal government investing it in this way. We have a federal Liberal government that barely has a housing policy. Who is their housing minister? Does anyone know? Do we ever hear from him or her? No.

I commend the member for Florey for bringing some amendments to the house on behalf of SACOSS. I have not had time to have a good look at them yet, but I understand the intent is to bind the government to invest the added revenue back into public and community housing. At some point between Lucas's land tax version 2 and version 5, I believe he threw the toys out of the pram and stated that there would be no amendments accepted to the land tax. I also doubt very much that this government would allow itself to be bound in any way such as this. Remember that this is the party led by a Premier who did not enter politics for social issues.

This legislation is unfair and unbalanced, and it hits those who can least afford it. Just like Lucas's lacklustre budgets over the past two years, this legislation seeks to hit the hip pockets of everyone in some way—more tax increases. Remember that this is the Treasurer who was penny pinching a few bucks a week out of the pockets of Housing Trust residents just to increase revenue by a few million dollars a year. These are vulnerable renters, mums and dads and small business owners, including the builders who build the much-needed housing for those who have no choice but to rent—builders who have been going belly up at the rate of knots since those opposite took a hands-off approach to government in regard to building and the industry.

It has not been an easy decision because of the complex legislation, the ever-changing parameters from the government, the fierce opposition at community forums that have been held by the Labor Party and discussions with my local constituents—people in the southern area who come up to me to speak to me about this. I have been listening to them to help them make these decisions.

As we have already heard from our leader, the Labor Party is a party that at its heart is about fairness. To be honest, though, there are many in my electorate who are under mortgage stress. I did try to find the article that points to Woodcroft. I remember reading it is a suburb that has the highest degree of mortgage stress in South Australia. My electorate contains the whole of Woodcroft and I live in Woodcroft, so I do understand what is going on there.

Many in the electorate around those suburbs are utilising food banks and generally struggling to keep their heads above water financially. Most of them are not even sure what land tax is, let alone why it is taking this government so long to do anything with it, changing every few weeks and fighting with each other about it. There are, however, some people in my electorate of Hurtle Vale who would genuinely be affected by this retrospective land change.

Firstly, in my electorate there are those who rent. Around 29 per cent of households in my electorate are renters. What will this legislation do to rental rates? I do not think anybody can be absolutely sure, but I have spoken to landlords who have reached out to me. I will not say his name, but a self-declared Liberal donor, whom I know, rang me and said, 'Nat, I'm not going to wear these costs. I will pass them on. I will pass them on to your people. I'm not stupid.' He is not going to suffer a loss out of this. He knows that aggregation is going to cost him tens of thousands of dollars, so he will jack up the rents. That is how he will recoup his land tax.

I would bet that residential rents will most certainly rise. We know they will. We have seen it elsewhere when land tax is increased. This happened not long ago in the ACT. Many residential tenancies are six or 12 months. We know that property owners can increase rents at the break in those tenancy agreements. Property owners will no doubt seek to raise rents to try to pass on the extra land tax burden. It is how the free market system works. Passing on the cost to these families who are struggling already will clearly be a disaster.

This Premier promised to take an axe to land tax. What he is in fact doing is taking an axe to renters, low-income earners, mum-and-dad investors, migrants, and small business owners who have set up their retirements in modest property investments ahead of superannuation. It is not just renters who will be hit. There is the potential for this tax to seriously affect people who have compiled their property as their retirement funds. I do not mean multimillionaire property collectors, some of whom might be in this chamber. I mean mum-and-dad small business owners who simply do not have retirement savings.

The other day, I met with a couple from my electorate who own a small business located in the inner south. They own that property, not freehold. They live in my electorate. They also have a small, hardly lavish shack in the south of the state. They do not own the properties outright. They are mortgaged; they are still paying for them. This couple, as small business owners, do not have superannuation. Instead, they opted to invest in their small properties and hold them in a family trust, like many small business owners. They use these properties to run their business, raise their families and have at least some quality downtime at the family shack together. They are hardly hiding amassing multimillion dollar investments in the name of a trust.

Importantly, they rely on their small collection of properties for their retirement. This is their superannuation, the thing they will need to use in retirement to continue living. They were promised over the past five years by the now Premier and those opposite that they would be better off. These people were in tears. They will have to sell properties. Those opposite promised a reduction in land tax. After being elected, they have changed their minds and they have introduced land tax aggregation, increasing this tax for many.

This goes to show that it affects not only mum-and-dad investors in the community but small businesses and families. It will have a flow-on effect on construction and therefore jobs. This will therefore increase the welfare burden. It will put people out on the streets. It will reduce housing availability—and we already have a lack of that.

I concur with my colleagues on this side of the house: this bill does not have the support of the community. I am sure it does not have the support of the majority of this parliament. It has been very difficult for us to work through this, considering all the changes and the uncertainty. I cannot imagine what it is like for the community to watch on while this is going on, particularly that part of the community that, as I said before, does not have land tax in their usual vocabulary. This is something that simply worries them. They just see this as another impost. It is another barrier to business. It is another barrier to success for South Aussies.

We heard about doctors' groups that were going to have to stop bulk billing in order to be able to pay their land tax bills. I am not sure if members are aware, but that could mean between $30 and $50 per trip to the doctor. When you lose your bulk-billing capacity, that is how much you would have to pay to go to the doctor.

There are people in my electorate who are renting, people in my electorate who do not understand land tax, people in my electorate who rely on the support of organisations for their groceries every week, and some people in my electorate who have already had their Housing Trust rents jacked up by $10 or $15 a week by this government. There is no way that those people can afford not to be bulk billed when they go to the doctor. Those people cannot afford any of those increased costs. The people in private rental certainly cannot afford to have an extra $20 or $30 a week added onto their rent by landlords who are way too smart not to put the rent up when their land tax bills are going up in the tens of thousands of dollars per year.

That will be commonplace for people under aggregation. It is for that reason that I support our party room in the decision to oppose this bill, and I would expect that it is because of this that this bill will not pass through the parliament.

Mr HUGHES (Giles) (23:47): At this late hour I also rise to oppose the Land Tax (Miscellaneous) Amendment Bill 2019. It has been a long day, a day full of colour and movement. It has been a day that I am sure was quite challenging for some of those opposite, maybe some of the backbenchers opposite. The process that we have followed over recent weeks has been an incredibly interesting process. It is an example of how not to do things when it comes to introducing a bill into this place.

I note earlier tonight that the member for Bragg indicated that there had been extensive consultation around land tax going back way before the election. That would have come as a complete surprise to the backbenchers, who were clearly not happy when the budget flagged the initial changes. We all say 'the initial changes'; this has not been an evolutionary process. This has been a chaotic process, with five changes—and here we are with the fifth change here tonight.

At least on this side of the house we had the decency to go out and consult with the broader community. That was a very difficult thing to do, given this was a moving feast. It kept changing: you looked away one minute, you looked back the next minute and yet another change. I have a lot of sympathy for the backbenchers opposite who are trying to keep up with what has gone on. Clearly, the Treasurer did throw a cat amongst the pigeons.

When you look at it, it is a retrospective grab-all. A whole bunch of people, many people, who have structured their holdings in accordance with the existing rules will now have the rug pulled out from under them. It has been said tonight time and time again that we are talking about mum-and-dad investors, we are talking about independent retirees, we are talking about small businesses, and we are also talking about the impact that it will potentially have on renters, which is something incredibly important to me given the make-up of some of the communities that I represent.

This $60 million hit on mum-and-dad investors, on independent retirees, on small businesses, has come courtesy of the gift that has been handed to the Property Council. It looks like they are the only ones who will win from these changes. A whole range of other bodies that you would think are instinctively Liberal supporting bodies are clearly not happy and clearly believe that far more work needs to be done. But here we are with chaotic policy on the run, a long-running saga, just to get this bill before the house tonight.

It is actually amazing when you think about it. There have been five goes at it, and because there have been five goes at it and because of the nature of these changes, these reactive changes, these changes in response largely to the Property Council, the really interesting thing about it will be the unintended consequences. What are the consequences that are not immediately apparent? I am sure they will come to the fore as time goes on. The devil is always in the detail and I think there will be a lot of devil in the detail of this bill, and it is a devil that will have a serious impact on a lot of people.

When it comes to investment, uncertainty is poison. This bill is generating a significant degree of uncertainty out there in voter land, at least amongst that section of the population that have invested under the current rules. Not only is that uncertainty poison, but in addition we have the unquantified factor at the moment with the revaluation that is to come. In all likelihood, that will have a major impact. This has the real potential to come back and bite those opposite on the bum—assuming that is not unparliamentary language.

Earlier tonight, the member for Waite made a contribution to the debate. I am always happy to listen to the member for Waite. I know that he is eager to get on the front bench. He evoked Thomas Playford, and I think he might have even referred to the portrait on the wall looking down on us. He talked about Thomas Playford and the fact that South Australia was a low-cost jurisdiction. When you go back into the forties, fifties and probably the early sixties there was a low-cost regime in South Australia. Deputy Speaker, I draw your attention to the state of the house.

A quorum having been formed:

Mr HUGHES: I seek leave to continue my remarks.

Leave granted; debate adjourned.


At 23:56 the house adjourned until Wednesday 30 October 2019 at 10:30.

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