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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2019-09-10 Daily Xml
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Land Tax

The Hon. C. BONAROS (15:20): Will the Treasurer undertake to provide a response to this chamber in relation to the errors that were made in its land tax revenue projections?

The Hon. R.I. LUCAS (Treasurer) (15:20): I already have, but I am happy to repeat it again in terms of the detail, and tomorrow and Thursday and any other day that we are sitting answer any other detailed questions the honourable member has got. In relation to the significant underestimate in terms of revenue, what Treasury in the last 12 months has been able to do is cross-reference the RevenueSA database with TRUMPS driver's licence database material but also, more importantly, ASIC company search material. What that forensic investigation, as it relates to companies and individuals, has determined is that, essentially, the estimate for individuals has been relatively accurate; the significant underestimate was in relation to companies.

I might just tangentially indicate that the 2015 state tax reform paper, which was issued by the Labor government and endorsed by the Labor Treasurer at the time, lists on, I think, page 6 or something of that particular report the proposition that is now being discussed. The estimate of the revenue to be collected from that particular proposal at that time, which was 2015, which was reform aggregation to be like New South Wales, Victoria and Queensland, was $30 million a year.

So the Labor Party estimate three years ago on this, which they issued for a state tax reform summit, endorsed by the Labor Treasurer, endorsed by the then Labor premier, endorsed by the ministers sitting around the cabinet, was that to reform aggregation to be like New South Wales, Victoria and Queensland the net cost to revenue would be $30 million.

So when Treasury produced the estimate in 2019, about four years later, and their estimate was $40 million, which was in essence a 33 per cent increase over four years, it was sort of within the ballpark of the Labor government's estimate of what the cost would be. The Labor Party cannot move away from their estimate in relation to this particular issue.

Members interjecting:

The Hon. R.I. LUCAS: The Leader of the Opposition can squeal like a stuck pig if he wants to, but that was the estimate the Labor Treasurer in 2015 issued, endorsed by the Labor government, as to what the cost would be. The significant underestimate by both the former Labor government and the current Liberal government in its budget in relation to the estimate was in relation to the cross-referencing with ASIC data.

What has now been established, after 12 weeks of further work and consultation, is that there were a number of company groupings in the RevenueSA database, which might have been ABC proprietary limited, or whatever it is, which owns some properties, and there might have been another group of companies called XYZ proprietary limited, and they look different in the RevenueSA database; there was nothing which indicated that they were linked. But through the ASIC database—and you can have a look at some of these complex structures: they look a bit like Noodle Nation—you go back through two or three layers of other companies and you eventually find that ABC proprietary limited and XYZ proprietary limited are actually controlled by the same company or the same individual.

It has been that cross-tabulation with the ASIC database which has allowed—in essence, it then says, 'Well, they are all being controlled by the same group; they therefore should be aggregated.' Under the RevenueSA database, which the Labor government issued in 2015 and the Liberal government in 2019 issued—the estimate of Labor was $30 million; the estimate of the Liberal government was $40 million—it significantly underestimated the related party groupings in relation to the company structure. That has been the big difference in terms of it.

I am happy on a daily basis to continue to talk about that, but that is the simple answer to the question as to why both the former Labor government's estimate was a significant underestimate and the Liberal government's estimate in its budget this year was a significant underestimate, although we were $10 million closer, albeit four years later, to what is the accurate figure in relation to the revenue to be reaped.

The general answer to the Hon. Ms Bonaros' question is that I am happy on a daily basis to take each and every question from the Hon. Ms Bonaros or anybody else in relation to the government's tax reform package as part of being open and transparent about the government's proposal, of which we are seeking the endorsement of the parliament by the end of the year.

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