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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-03-04 Daily Xml
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LAND TAX

The Hon. T.J. STEPHENS (15:05): I seek leave to make a brief explanation before asking the Leader of the Government a question regarding land tax.

Leave granted.

The Hon. T.J. STEPHENS: On Monday, the Treasurer was on ABC Radio on the Matthew Abraham and David Bevan program responding to a caller who complained about his land tax bill having increased from $15,000 per annum to $58,000 per annum. The Treasurer stated:

Well, firstly, I'd be more than happy if Mark had a complaint to write to us and we'll look at it, but Mark is saying his bill has gone from $15,000 to $58,000. Two things have occurred. It's either a factor of property value increase, and bearing in mind in South Australia we have a shortage of industrial property and it may well be a fact that he has received a significant increase in the capital value in his land which is a benefit to both him and to his business.

Does the Treasurer, you, leader, and this government have any understanding that, as the capital value of a property increases, it does nothing to improve the actual cash flow of a business or an individual and provide any extra capacity to pay what can only be described as outlandish, outrageous and unfair land tax bills?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (15:06): On what evidence does the honourable member say that a land tax of that amount is outrageous or outlandish? Does he know what the property is worth? Would he share that with us? Is he going to—

The Hon. T.J. Stephens: You're missing the point, Paul.

The Hon. P. HOLLOWAY: I am missing the point! The fact is that the land tax will depend on the value of the land; whether it is outrageous and outlandish will depend on the value. If the Liberal opposition wishes to go to the next election saying that it will abolish land tax, then I guess it can do that. It can also tell us where those hundreds of millions of dollars will be made up, or, alternatively, it can tell us how we will deal with all the additional debt that would impose on the state. Perhaps the Liberals could also tell us how, in terms of equity, it is fair to the people of the state because, if you are making a selective tax cut for one section of the population, inevitably, in one way or another, that burden will shift onto the rest of the population, and that is the dilemma involving all forms of taxation.

Whether you like it or not, state governments are unhealthily dependent on taxes such as payroll tax, land tax and other forms of tax that relate to employment and economic activity; unfortunately, that is our fate under the federal system of government, particularly if states are to provide the services that people ask for—and particularly when members opposite keep asking for additional expenditure on the one hand and then say that taxes are too high. They are never backward in coming forward over requests for additional expenditure. There would not be one question time in this parliament that goes by without a member opposite, in some way or another, asking the government for additional expenditure. At the end of the day, you have to balance it. However, in relation to capital value, I think the point the Treasurer was making is that the value of your property and assets—

Members interjecting:

The PRESIDENT: Order! Has the honourable minister finished his response?

The Hon. P. HOLLOWAY: I was just waiting for some—

The PRESIDENT: Quiet?

The Hon. P. HOLLOWAY: The point the Treasurer was making was that, if the capital value of a property increases, clearly, that is of benefit to either individuals or, in this case, companies.

The Hon. D.W. Ridgway interjecting:

The Hon. P. HOLLOWAY: If the honourable member does not believe so, perhaps he should go to Europe, the United States and other parts of the world where their property values have collapsed and see what it has done to those companies. Has it helped those companies? That was simply the point that the Treasurer was making: the last thing you need is a collapse in values because, if the value of your property has declined by about 500 per cent like it has for some of these property trusts that have now gone bankrupt, then certainly they will not be paying any land tax because they are out of business, and I think that was the point that the Treasurer was making. Clearly, having capital appreciation is of much greater benefit to industry than capital decline which, as I said, has wrecked many companies in other parts of the world at this present time.

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