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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-05-12 Daily Xml
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STAMP DUTIES (TAX REFORM) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 28 April 2009. Page 2030.)

The Hon. D.W. RIDGWAY (Leader of the Opposition) (16:45): I rise again to make a few brief comments in support of this bill. As I indicated in the previous bill, our lead speaker is the shadow minister for finance, Steven Griffiths (the member for Goyder), in the House of Assembly, so I will not make a particularly long contribution. I will just reiterate some of the important points that were raised during the debate.

As part of the 2005-06 budget, legislative amendments were introduced and passed to phase out rental and mortgage duty, with 1 July 2009 being the date on which both these duties would be abolished. Budget papers show that rental duty across the forward estimates is around $39.6 million, and that mortgage duty is some $192.2 million. The bill proposes to abolish rental and mortgage duty at the start of the 2009-10 financial year. I indicate that the opposition supports the bill without amendment.

Representations from the finance industry have been considered during this process, with the industry position being revised following the receipt of more detailed advice on the application of GST on adjustment notices when stamp duty rates have changed. As such, this bill reflects the changes requested by industry and ensures that no rental duty is payable on rental contracts after 1 July 2009.

It is important to recognise that the removal of these duty costs was part of the intergovernmental agreement stemming from the introduction of the Goods and Services Tax in July 2000 and not a sign of any generosity by the current Treasurer. I think I should remind the council that it was, in fact, today's government (the then opposition) that voted against the Goods and Services Tax. In fact, the level of GST revenue received over the past eight years has been significantly greater than expected. It was predicted to be about $1.9 billion, but it has been significantly greater than that.

Stamp duty is a significant issue for many individuals and businesses. Homebuyers and businesses have struggled to meet their costs. To a homebuyer, it is a substantial portion of their mortgage and, for a small business, it can equate to the salaries of additional employees.

There are other areas where stamp duty needs to be assessed, such as insurance policies. The 2008-09 budget indicates that savings to business—and thus reduced revenue to government—across the forward estimates as a result of abolishing rental and mortgage stamp duty are estimated to be, as I have said, $39.6 million and $192.2 million respectively.

In addition to abolishing rental and mortgage duty, the government has also taken the opportunity to extend the concessional stamp duty treatment provided to exploration licences to include geothermal licences, and certainly the opposition commends the government on taking that opportunity. I think that geothermal exploration is an area in which we need to provide assistance and encouragement to the people in that industry. Clearly, it is a potential energy source for the future, and we should explore it at every opportunity.

Other minor amendments have also been included to repeal redundant provisions in relation to cheque duty and lease duty, which have not operated for some time. This bill is certainly positive and a good start to tax reform. There needs to be a lot more work done, but this is, indeed, a good start. The opposition indicates its support for the bill.

The Hon. A. BRESSINGTON (16:49): I rise to briefly indicate my support for the second reading of this bill, which introduces legislative amendments to phase out rental and mortgage duty from 1 July this year. I note that these amendments were introduced by the Treasurer as part of the 2005-06 budget. Again, this bill is straightforward and warranted. Many homebuyers, business groups and investors who buy office buildings continue to be deeply concerned about the level of stamp duty they pay. Particularly in the current economic climate, legislation that will reduce these costs is extremely important, and I am pleased that the government has taken on board the request of the industry.

As I understand it, nearly $40 million rental duty and more than $190 million mortgage duty that is currently paid will be cut. Reducing the tax burden by more than $230 million is a significant and extremely positive thing for South Australia. It will be interesting to see how the Treasurer will make up for these cuts in next month's budget, which I think we all expect will not be too pretty. So, with those brief remarks, I commend the bill to the council and look forward to the debate.

Debate adjourned on motion of Hon. B.V. Finnigan.

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