Wednesday, 31 May 2023
Bills
State Taxation Acts Amendment Bill 2023
Bills
State Taxation Acts Amendment Bill 2023
Second reading
Debate resumed.
Sam HIBBINS (Prahran) (14:48): I rise to speak to the State Taxation Acts Amendment Bill 2023 on behalf of the Greens. This is a bill that seeks to make a range of changes to the state taxation system, amending eight acts, but predominant of course are the changes to land tax and the changes to payroll tax. In terms of payroll tax there will be additional tax for those with payrolls above $10 million and an increased rate again for those with payrolls of $100 million. This is estimated to raise about $3.9 billion over four years. Similarly with land tax, the tax-free threshold is going to be lowered, and there are some additional fixed charges as well, which are estimated to raise $4.7 billion in four years. These have been couched in frames as being temporary, even though they will be for 10 years, and as focused on paying down debt.
In principle the Greens certainly support the need at this particular time to raise revenue. It was clear in the lead-up to the budget that revenue did need to be raised, and those who can afford it should be paying their fair share. It has been pretty galling over the past year or so, particularly in the midst of a cost-of-living crisis, to see corporations profiteering, posting record profits, while Victorians in need are struggling. Just for example, the big banks are forecast to rake in about $33 billion of profit this financial year, record profits, and in fact it has been corporate profits that have been driving inflation. The Greens put forward a number of measures in the lead-up to the budget, including a bank levy and making property developers and the gambling industry pay their fair share, which I can go into a bit more detail on later, but we are extremely disappointed that this revenue is not largely going towards addressing the huge social issues that Victorians are currently facing.
The government has been at pains to point out that this is all paying down a COVID debt. I mean, this has all been spin from the government. Obviously there are a whole range of factors that have contributed to the government’s current debt, not just expenditure incurred from COVID but of course the infrastructure program as well – a whole range of factors of revenue and expenditure that contribute to the current fiscal situation. So really I feel that they have just landed on this COVID debt as sort of the most politically saleable way of selling what is actually required and they just need to raise revenue. What we are very disappointed with is that the revenue needed to be raised to address the many issues that Victorians are facing. The cost of living is through the roof. People are feeling the pinch. More and more people are being pushed to the margins, into poverty. They cannot wait another few years, whether it is when we are back into surplus or at another point in time, before there is any prospect of things getting better.
When you look at the plight of renters, there is nothing in the budget for renters, no safeguards in this bill for renters. We know we have got landlords who are already reaping windfalls from an overheated private rental market threatening to pass on the cost increase to renters. We have got renters facing another year of massive rent increases in a system that is in desperate need of reform. Rents have gone up 10 per cent and are due to go up another 10 per cent, pushing many to the brink. At the moment, right now at this point in time, the government is basically saying no to a rent freeze, no to rent controls, no to short-stay accommodation regulation, no to strengthening the vacancy tax – no to even a parliamentary inquiry, which finally the committee itself has managed to get up, but I think the government was trying to run interference on that on Tuesday. It is not an acceptable situation. We need clear, strong and immediate action in turn to safeguard and to protect renters here in Victoria.
There is a whole other issue that really needed to be addressed by the revenue raised in this bill: homelessness. Thirty thousand people are experiencing homelessness every single night, sleeping rough, couch surfing, in crowded or unsafe accommodation. Yet you have got a government, in their previous bill to raise revenue, shovelling more money into the racing industry, four times more in fact than they are into homelessness services. We have got people being turned away from homelessness services. We have got a public housing waiting list rising to 120,000 people. There was nothing – no more funding for social or affordable housing – in the budget. It is not an acceptable situation.
As part of this so-called debt repayment plan, not only do we have revenue raised but then we have got massive, billion-dollar cuts to the public sector. Workers have already experienced low wage growth for years and have now just experienced the biggest real wage cut on record, and throughout this time we have got a government who has a policy of deliberately keeping wages low.
The SPEAKER: Order! Can I ask members to cease walking between me and the person on their feet. Member for Mildura, that includes you.
Sam HIBBINS: Thanks, Speaker. Just recently, up until just a few weeks ago, the wage cap was set at 1.5 per cent. It recently increased to 3 per cent, but that means all those workers who negotiated deals under that old wage cap are still going to be having those low wage increases, low wage growth, at this time of mass inflation, and even future wage rises just are not going to come close to meeting the rising cost of living. On top of all that we have now got cuts to 3000 to 4000 public sector workers over the next 12 months. Just recently – I think in this debate – we had a government member saying we should all be saying thanks to our fantastic essential workers. Well, that is great. Let us say thanks to them; we all have been. But let us demonstrate thanks to them. The first port of call is to not sack them, not cut their jobs, but to make sure that they have got secure jobs with good wages that actually meet the costs of living, that go up with the cost of living. The idea that you have got public service staff just hanging around – they have already gone through multiple billion dollars worth of efficiency dividends in previous budgets – and that this is not going to have an impact on frontline services is just an absolute fantasy. For all the commentary that was done prior to the election talking about how Matthew Guy’s Liberals were going to be the party of cuts, to serve this up at the first budget I think is just absolutely appalling.
From our perspective much more could have been done to reform tax and raise revenue to pay for the things that Victorians urgently need. The government has been again at pains to point out that these are temporary measures, even though they are over 10 years. What we put forward is a bank levy, having the banks pay their fair share. The reality is that banks are posting record profits but are effectively subsidised by government by being too big to fail. So we think a levy as applied by the federal government or as has previously been proposed by the South Australian government could have raised billions of dollars, between $4 billion and $15 billion over 10 years, depending on the rate that was set. We could have seen a reintroduction of the social housing levy dumped last year, which could have gone to paying for more public and affordable housing, instead of nothing seen in this next budget. We know the government’s current build is not meeting what is required. So there was a real opportunity I think in terms of longstanding systemic tax reform that could have been permanent that could have been applied in this year’s budget and brought forward in these bills that could have gone a very long way to meeting those needs, whether it is housing, cost of living, renters, public and affordable housing or a number of social issues that Victorians are facing right now. People cannot wait for those things to get better.
One aspect that we did support – and actually put forward – was the land tax exemption for land on conservation covenants. Currently people who wish to put a conservation covenant on their land to protect the biodiversity values in perpetuity are required to pay land tax on this portion of their property. This has been a disincentive for people to protect private land for conservation. Most other states in Australia have exemptions, and we certainly welcome Victoria joining them. I think it only brings in a small amount of land tax anyway, land tax on conservation covenants, so the budget impact will be very small. So certainly we support that measure.
I note we have heard from the opposition certainly that they are opposed to any tax increases, but also they want to legislate a debt limit. Really, when you look at that, what they are selling here is a state of permanent austerity here in Victoria, which we just cannot have. People in need cannot afford that. So I would urge the government, as this bill progresses, not to leave people in need behind, not to leave renters behind. Make sure that there are proper safeguards for them against the rampant rent rises that they are facing. Renters, people in need, cannot wait years or months for meaningful action.
Roma BRITNELL (South-West Coast) (14:59): Firstly, before speaking on the actual State Taxation Acts Amendment Bill 2023, I would like to make a comment about the handling of this bill by the government. I attended the bill briefing last Friday afternoon and was quite shocked at the bill briefing to find out that, as we all know, this would not get second read as it would normally be. From the Tuesday to the Wednesday when we would debate this, there were certainly not the 14 days; in fact there was only one day. Those who say we had more than that time I think are disrespectful to the fact that our role as representatives here is to talk to our communities, and the community had less than 24 hours. I will quote the words said in that bill briefing. It was: ‘Do not share with stakeholders, this is still cabinet-in-confidence information’. So here we are beginning this debate less than 24 hours from people actually being able to see the bill. This is another example, and I have been up many times on my feet, to say this government refuses to consult, refuses to respect our communities. It has got to the point where it is their way or the highway. This bill affects 6.8 million Victorians. These taxes, these nasty taxes that this bill implements, are a cost impost on 6.8 million Victorians. The debt that this government has incurred as a result of their total mismanagement of the finances of taxpayer dollars will affect every woman, man and child.
For a family in South-West Coast, my children’s family – my son Tom, his wife Hayley, Archie, Fleur and little Hendrix, who is only one – that is $5000 for each one in that average family. That is $25,000 for that family. That is why we oppose this bill, because it is a nasty bill with nasty taxes: taxes on schools, taxes on renters, taxes on debt, taxes on jobs. That is why the family I just quoted you, my son’s young family, will find it harder to live in Victoria under Labor. I heard the member for Geelong say it was because the state was hard hit by COVID. Well, no, COVID was in every state. We are in this position because of the mismanagement of this government of the tax dollar and of COVID. More to the point, the $31 billion they talk about paying off in the next 10 years is exactly the same figure as the $31 billion in cost blowouts that they incurred as a result of the Big Build. Every single project that they have touched, they have blown it out. So here we are going from $165 billion to $171 billion over the forward estimates when we have got increased taxes that tax schools, tax renters, tax debt and tax jobs.
1941 was when we first had the tax exemption for schools, because schools are not-for-profit organisations. The Premier tried to say, and I heard him say the other day, it is a business. Well, if a school is a business, is every not-for-profit going to be come after by this government? Are they going to come after our sporting clubs? Are they going to come after aged care facilities? Where is this going to end? We heard the Premier also say yesterday that government schools are paying payroll tax. Well, let us just have a look at what the Catholic Education Commission of Victoria says. Jim Miles said:
… the cost of their children’s education … unlike government schools, this payroll tax is real money, which will have to be found somewhere.
So it is not just in kind – one government department, the education department, pays the Department of Premier and Cabinet – it is real money. We have schools in South-West Coast, schools like Portland, Bayview and Emmanuel colleges in Warrnambool – will they have this tax applied to them soon? Will they change the dollar amount? We certainly could not get that clarified in question time just now.
When I was a young girl, my father died. I was nine. My mother was left with four children aged between nine and 15. She wanted me, her daughter, to go to a Catholic school. So how would you tell someone like my mum, left widowed with four young children, with her very important philosophies that she wanted to instil in her children, that she would not be able to have that choice because she was seen as some sort of elite? Well, I do not think a single mother widowed at the young age of 40 with four young kids was anywhere near elite. I do not think the Catholic education I had was anything that would be something you could pick on as elite. It was a very sound, basic, good education. But debt is growing in our state, and it is the schools they are coming after.
There is a tax on renters. South-West Coast is desperate for more homes. Yet this government has such a poor understanding of the supply chain, of how you make sure there is availability for rental properties, that they are taxing renters. You just have to listen to some of the quotes. It is not just us, it is expert after expert everywhere. The Real Estate Institute of Victoria says it is ‘a tax on families, not the big end of town’. CPA Australia say mum-and-dad landlords will have to foot this bill:
… they will be forced to increase rents at a time when there is a national housing affordability crisis.
This is how outrageous the understanding of this government is. They have no understanding at all. What about the cuts to regional Victoria? Regional development funding has been cut to $106 million in 2023–24 – down 40 per cent – and in regard to the actual budget of 2021–22, it is 57 per cent over that two-year period. This is an extraordinary cut, and the number of jobs that are generated from these areas will go from 2427 to just 500. Already I have been contacted by government programs funded by Regional Development Victoria, and they are saying they will limp through till the end of this financial year and have no idea about the next.
The department of agriculture also faces cuts, after having its workforce decimated in 2022. Investment in agriculture industry development will be down nearly 17 per cent. Our region is an economic powerhouse when it comes to food production, renewable energy and manufacturing. We make a significant contribution to the state’s economy, and this is the thanks we get. The Andrews Labor government has no understanding of what agriculture does and how to drive growth, and how to not punish people through punitive taxes, which are exactly that – a punishment. So we oppose these taxes because we are for Victorians. I am for south-west Victorians. Taxes punish people. This is completely as a result of the poor handling of the state’s money – the people’s money.
Some people, we know and are told, could share this bill with the government, but where do they think they are going to find the people who are not struggling? Liberals know how to grow economies through incentives, and we promise tax reform and we have a track record to deliver on a stable economic state of Victoria. The Andrews Labor government promised no new taxes, and we are up to almost 50. As I say, I have a litany of quotes that I could keep going with from experts. Rob Scott, the CEO of Wesfarmers, one of our largest employers, says:
… Victoria’s payroll tax hit will hurt an already slowing economy and undermine investment and jobs.
How is that going to help Victoria? The evidence is clear: we are not going to reduce debt, despite this government’s increase in taxes, despite the revenue they say they are going to raise from this, because they probably will raise it but waste it again because there has been no reining in of waste, none whatsoever – $31 billion on the wasteful Big Build projects that they have not delivered on time and they have not delivered on budget. They are going to Victorians, because we all know when Labor run out of money they come after yours. That is how Labor operate. It has never been how the Liberal Party operate. Economic and fiscal responsibility is what we are synonymous with, and this government are not a new government just getting their feet under the table. They have had 19 of the last 23 years, and they say that it is as a result of COVID. Well, as I say, COVID was in South Australia, New South Wales, Queensland, Tasmania and Western Australia, and we have a debt here in Victoria equivalent to New South Wales, Queensland and Tasmania all put together. Not just one of them, but the three of them put together – our debt is bigger. So do not pretend to us here in Victoria that COVID was only here in this state. It was right throughout this nation and right around the world, but the debt we have here is extraordinary. You think you can come after Victorians – mums and dads and the pockets of kids who want to have an education like I had in a simple Catholic school in the far west of this state.
That the debate be now adjourned.
Motion agreed to and debate adjourned.
Ordered that debate be adjourned until later this day.