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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2019-09-24 Daily Xml
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Land Tax

The Hon. F. PANGALLO (15:23): I seek leave to make a brief explanation before asking the Treasurer a question about land tax.

Leave granted.

The Hon. F. PANGALLO: Last night, my colleague Connie Bonaros and I, along with about 250 other people, attended a land tax forum organised by the Labor opposition at Paradise. I never thought I would see the day when hundreds of dyed-in-the-wool Liberal voters would applaud a Labor leader numerous times in a Liberal-held seat. The room was full of decent, law-abiding people, who have spent their adult lives working hard to invest in properties, with the aim of giving themselves and their families a financially secure future, many of them being self-funded retirees who don't put out their hand for government support.

Some of the personal stories we heard were very moving and strike at the heart of the issue. But there is more pain to come, with property owners whose investment properties will be hit with land tax for the first time due to the revaluation process currently underway. My questions to the Treasurer are:

1. Given that the full impact of the creeping effect of revaluations is not yet known, will you delay the introduction of your land tax legislation until the Valuer-General has completed its entire revaluation process?

2. Do you agree that introducing retrospective land tax reforms sets an unwise and, from a global investment prospective, an ugly precedent for all future tax reforms?

3. Will self-managed superannuation funds with properties held in trust be fully exempt from your reform package, as you have declared?

4. Given that you have already threatened South Australians by saying the government will need to introduce other new taxes if your controversial land tax proposals aren't successful, can you categorically rule out introducing death and/or inheritance taxes?

The Hon. R.I. LUCAS (Treasurer) (15:25): The honourable member has been sadly misinformed. I have never at any stage threatened new taxes, because, as my colleague the Minister for Health has indicated, we were elected on a pledge of no new taxes. So I can exactly rule out no death duties or whatever the other—what was the other one?

Members interjecting:

The Hon. R.I. LUCAS: No death taxes or inheritance taxes. The notion of new taxes is the province of the Labor Party. Whether it was a car park tax or whether it was a bank tax, anything that moved, the Labor Party were wont to try to introduce a new tax. The Marshall Liberal government was elected on a program and a platform of no new taxes and we will abide by that particular measure. I never at any stage have threatened new taxes of any particular form or another. In relation to—

Members interjecting:

The Hon. R.I. LUCAS: The Leader of the Opposition was not at the meeting and therefore is not in a position to indicate what I said or didn't say, and I can assure him there will be no record at that meeting, or indeed anywhere else, where I threaten new taxes in relation to a government measure. The Leader of the Opposition will not be able to find—and neither will the Hon. Mr Pangallo—any reference where I have indicated that we will be introducing new taxes should the measure not go through.

In relation to some of the other questions that the Hon. Mr Pangallo raised in relation to self-managed superannuation funds—I think it was his second or third question—we have made it quite clear that the proposition in relation to a 0.5 per cent surcharge in certain circumstances won't apply to certain trusts and arrangements, such as charitable trusts and guardianship trusts and the like.

We have also indicated that self-managed superannuation funds will not be covered by the 0.5 per cent surcharge arrangement, so we made that quite clear. There have been some erroneous claims made by the Property Council in some advertising that has frightened some people into believing that the government was going to move down that particular path. It was never the government's policy, never the government's intention. We have never indicated we would, and we have made it quite clear that the imposition of the surcharge won't be applied to self-managed superannuation funds.

There was another question that the honourable member raised—the first one—which was in relation to—

The Hon. F. PANGALLO: Do you agree that introducing retrospective—

Members interjecting:

The PRESIDENT: It has an all encompassing characterisation. The Hon. Mr Pangallo, ask the question and give the Treasurer some guidance.

The Hon. F. PANGALLO: The first part of the question was that, given the full impact of the creeping effect of the revaluations, will you delay the introduction of your land tax legislation until the Valuer-General has completed its entire revaluation process?

The Hon. R.I. LUCAS: The simple answer to that is no. I have indicated that publicly on a number of occasions. I think the honourable member might have said in either his explanation or part of his question that the revaluation might mean that people who had previously not paid land tax might end up having to pay land tax. One of the reasons for the very significant increase in the threshold from 390,000 to 450,000 will mean that a significant number of South Australians who currently pay land tax will no longer have to pay land tax.

The only other cautionary note I would give is that it has become urban folklore that in some way the average property increases as a result of the revaluation are going to be of the order of some of the individual claims that have been made on talkback radio by individuals. I am not disputing the individual revaluations some people might have received from the Valuer-General, but the error is to assume that that is therefore going to be the average.

I have just provided some answers to the Hon. Mr Darley in relation to the average site value increases in the three council areas where the Valuer-General has currently conducted them. I think from recollection Unley, which was the biggest, was 11 per cent on average. I think Walkerville was 10 per cent. I think Adelaide Plains was 5 per cent or 7 per cent; it was much, much lower. The position that some people have put on talkback radio, 'I have just had an 80 per cent or 120 per cent or 60 per cent increase,' is not the average.

According to the Valuer-General, who is independent from the government, the average in those three areas in terms of site value has been much less. If one looks at the capital value increase, which of course is important for other tax and levy measures, it is significantly lower than the site value increases in relation to that. But I refer the honourable member to the answer that I provided today to the question from the Hon. Mr Darley in relation to the early information of the Valuer-General in relation to the three council areas that are being revalued.

The only other point I would make is that the Valuer-General, in a briefing to me a couple of weeks ago, indicated that the revaluation was only going to cover around about 17 of the 68 or 69 council areas in South Australia, and I think all of them were in the metropolitan area. So I think all of the regional councils and a number of the metropolitan councils are not actually going to be going through the revaluation exercise. They will be valued in the current way, which is computer modelling and various algorithms which are used by the Valuer-General, and it will only be around about a quarter of the councils which are going to be subject to the revaluation. That is because they have made the judgement that they are the particular areas where there may well have been significant undervaluing of properties in those council areas.

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