Wednesday, 1 May 2024

Bills

Commercial and Industrial Property Tax Reform Bill 2024

Second reading

Debate resumed on motion of Tim Pallas:

That this bill be now read a second time.

Brad ROWSWELL (Sandringham) (11:24): I rise to address on behalf of the coalition the Commercial and Industrial Property Tax Reform Bill 2024. In doing so, from the outset I would like to thank sincerely on behalf of the coalition the stakeholders that we have engaged with and that have engaged directly with us in formulating our position on this bill: the Victorian Chamber of Commerce and Industry, the Real Estate Institute of Victoria, the Property Council of Australia and the Property Investment Professionals of Australia. I am also grateful for the engagement of my colleagues, those that represent both metropolitan and regional areas. Every person I have engaged with on this bill has been helpful in some way, and I am sincerely grateful from the outset for their contributions.

At the outset I want to say that from a principles perspective we agree with the government. We agree that the imposition of stamp duty on commercial properties stifles investment, stifles opportunity. It means that those who want to sell their commercial property to move into a larger property or a smaller property, those who want to take the leap into the commercial and industrial property space, perhaps face the unnecessary barrier of the cost of stamp duty. We know that, and at a principles level we believe that everything should be done to try and incentivise and stimulate our economy at the moment, given that after 10 years of the Andrews, now Allan, Labor government the state of Victoria’s economy is in a pretty terrible way. Everything should be done to incentivise and to encourage investment by those Victorians who are willing to dip into their own back pockets to create opportunities for others, to give other people the opportunity to experience firsthand the dignity of work, to give others the opportunity to look after themselves and their families through highly paid jobs. And so at a principles level we agree with the government that the burden of stamp duty is an unnecessary burden and one that should be gotten rid of.

The government’s proposal is a complex proposal, as outlined in their Commercial and Industrial Property Tax Reform Bill 2024. It is not a simple, clean-cut removal of stamp; it is a removal of stamp, a 10-year transition program and then the implementation of a new tax, a CIPT – a commercial and industrial property tax – from the 10th year. The government proposes that the rate of that tax will be set at 1 per cent of unimproved value of the property for the life of that property, so it is an ongoing tax.

Other examples around the country are, for example, in the Australian Capital Territory, where some time ago it was the intention of the government to remove stamp duty and to replace stamp duty with another CIPT equivalent. The Labor government in the Australian Capital Territory have not actually got rid of stamp duty at all. In fact now commercial properties are being charged not only stamp but also the ACT CIPT equivalent. Perhaps the best example in the country of where this reform has taken place is in South Australia, where stamp duty itself has been abolished completely and not replaced with anything. I understand that there is a scale difference between Victoria and South Australia. In South Australia the revenue line for stamp duty on commercial properties is about $300 million. In Victoria it is about $1.5 billion, so I understand from a financial responsibility perspective and from a government perspective, especially given the debt incurred by this government is massive, that the government would not want to be simply forgoing a revenue line as large as $1.5 billion. I get that; I understand that. They simply cannot afford to do that. But that would be the easiest thing to do, as has been done in South Australia. That is not the process here.

The other matter that I would like to raise at this point is that the government has said in its material that is available on the Department of Treasury and Finance website that these reforms will be the instigation and the auspices of a $50 billion economic uplift to Victoria. I am grateful to the Treasurer’s office, I am grateful to the State Revenue Office and I am grateful to Department of Treasury and Finance officials who offered the coalition a customary bill briefing on this bill. I took the time to ask the question during the course of that bill briefing: how has the government come to that $50 billion figure, anticipating that there will be $50 billion of economic uplift as a result of the introduction of this bill, as a result of the introduction of this reform? I understand that EY has done a bit of work on behalf of the Department of Treasury and Finance in order to model how the government got to this $50 billion figure and can assert this $50 billion figure. I am sorry to say that, as I stand here today with the bill being considered before this house, I am not privy to the modelling that the government relies upon to assert that $50 billion figure.

I think it is fair for me, with my responsibility on behalf of the Victorian people, to scrutinise the government’s legislation that comes before this Parliament, and I am sceptical about that number. From a communications and a sales perspective I get it. It is a nice big round number. It is something that the government will no doubt, during government member contributions during the course of this debate, hang their hat on – the fact that there will be $50 billion in economic uplift in Victoria. I am sure they will. I fully expect them to. My invitation to them is that when they do, they also give Victorians an insight into how the government has actually reached that figure and back it up with an insight into the modelling behind that, because up until this point in time that is unclear to me and that is unclear to the opposition.

There is a risk with the introduction of the government’s reforms that there will be some Victorians who will effectively experience double taxation, because under the government’s proposal the first purchaser in a commercial and industrial property transaction after 1 July this year will need to pay stamp duty for one final time. Thereafter a 10-year transition period ensues. A commercial and industry property tax, a CIPT, of 1 per cent of unimproved land value will need to be paid for every subsequent year of ownership. This means that investors that hold onto this property for 10 years or more will not only be paying the initial stamp duty up-front but after the 10th year they will also be paying the CIPT, and that is a concern for us. There should be the current system and there should be the new system. With the government’s proposal that the house is considering at the moment there is the possibility that those who own commercial and industrial properties in this state and make that purchase after 1 July this year, when these reforms are introduced, will not only pay stamp duty but will also be paying an ongoing CIPT.

We also contend that the CIPT rate of 1 per cent of unimproved land value is unnecessarily high. We are on this side a party, a coalition of people, who want our taxes to be lower, fairer and simpler. We believe 1 per cent is too high. Under some modelling that we have undertaken we believe that the government would reach a cost-neutral position to the budget over 40 years, which is the measure the government are imposing upon themselves for cost neutrality. At 1 per cent they would in fact be earning more than they would have otherwise received.

We propose a 0.8 per cent commercial and industrial property tax in metropolitan areas. While I am on this I will address regional Victoria, because currently regional Victorians or Victorians – anyone in this case – who purchase a commercial or industrial property in regional Victoria are subjected to a concessional rate of stamp duty. Under these reforms proposed by the government there is no consideration for the concession that regional Victorians currently receive or that regional commercial and industrial properties currently attract. There is no consideration of that whatsoever. We think that is unfair. We think that that will make those who want to upsize or downsize properties in regional Victoria worse off. We do not think that that is a fair thing. We think that the government could have given consideration to commercial and industrial properties in regional Victoria akin to those that are currently there with the concessional rates of stamp duty. Therefore we propose a 0.8 per cent CIPT for metropolitan Victoria and we propose a 0.4 per cent concessional rate of CIPT for regional Victoria. We think that that is a fair proposal, and we urge the government to consider that quite seriously. Under standing orders I wish to advise the house of amendments to this bill and request that they be circulated.

Amendments circulated under standing orders.

Brad ROWSWELL: Some of the proposed changes that I am addressing now are included in these textual amendments which are being made available to the chamber at the moment.

The other part of the textual amendments which the coalition proposes is an amendment which encourages greater transparency. We are concerned that from 1 July this year that if a property is sold, a new property owner has a choice: they can pay stamp duty up front, or they can have a government loan, which is money loaned to them by the government to effectively pay their stamp duty over a 10-year period, but that loan attracts an interest-rate. That interest rate has two components to it. The first component of the interest rate is linked to the Treasury Corporation of Victoria’s 10-year bond rate. I have got no argument with that component whatsoever. I am concerned, however, about the second component to that government interest rate. That is a risk component, as the government has indicated, and that risk component is solely determined by the Treasurer. I am concerned about that, because there is no obligation upon the Treasurer to articulate the reasons for the Treasurer of the day increasing that rate or decreasing that rate or to articulate to those who are subjected to that interest rate why that risk component of the overall interest rate is what it is.

I think that everyone in this chamber would have an expectation that other financial institutions would be transparent around why interest rates are the way they are and to explain that. I think it is fair for us to propose that the Treasurer himself make an annual statement available on why this risk component of the interest rate, which the Treasurer determines in and of themselves, is what it is. I think that is fair, for all Victorians to have some transparency and some accountability around that, and these textual amendments propose that that is undertaken every year.

Again, and in short, we think that consideration in these textual amendments should be given not only to metropolitan but also to regional Victoria. We think that the rate of the government CIPT should be lower than what is currently being proposed – not 1 per cent but 0.8 per cent in metropolitan Melbourne and 0.4 per cent in regional Victoria. That is at the heart of the amendments that we propose.

We propose these amendments in good faith, requesting that the government does take them seriously and does give them serious consideration, so much so that on behalf of the opposition the Manager of Opposition Business approached the government asking the government to consider a consideration-in-detail process for this bill so that these textual amendments would be not just circulated during the second-reading stage of the bill but considered in further detail and the bill voted upon clause by clause, line by line.

Tim Bull: How’d that go?

Brad ROWSWELL: I am still hopeful, member for Gippsland East, but to date we have not received a positive response from the government on moving this bill into the consideration-in-detail stage to consider what we propose are quite sensible amendments line by line, which is a difficulty for us. In the eventuality that the government does not allow the house to go into a consideration-in-detail stage and consider these textual amendments, I will move a reasoned amendment. I move:

That all the words after ‘That’ be omitted and replaced with the words ‘this house refuses to read this bill a second time until the government commits to:

(1) further consultation on the proposed CIPT rate including the cost neutrality of the proposed reforms and how the reforms will affect owners of regional and non-regional commercial and industrial properties;

(2) providing investors with certainty and confidence against any potential future tax increases; and

(3) making public the modelling assumptions underpinning the $50 billion economic uplift anticipated from this reform scheme and the rationale for the risk margin component of the proposed 10-year transitional government loan, including any future changes made to the risk margin component of the loan rate’.

I will be frank with my colleagues and with members of the government: this is my fail-safe way of at least getting the government to pop their hand up and vote one way or the other on some very sensible reforms, some very sensible amendments proposed by the opposition.

In our conversations with stakeholders they have also been concerned by the potential risk of mistakes being made given the short implementation period. Acting Speaker, you will know as well as I that today is Wednesday 1 May. In six short days time we will be here hearing from the Treasurer as he delivers his budget. But that means we are also two months away from the implementation of this bill. Stakeholders that we have spoken to have indicated a concern that this bill is overly complex. It is not a clean-cut bill, as was the case in South Australia where there was simply a removal of stamp, full stop. This bill is more complex insofar as there is a removal of a stamp, there is a transition period, there are government loan potentials – is stamp paid once or over a 10-year period? Then there is the implementation of the CIPT 10 years after the first transaction after 1 July has taken place.

I am hoping to give a sense that there is complexity around this. The stakeholders that I have spoken to have indicated to me that because of that complexity they do have concerns around the short implementation period for this bill. To mitigate those concerns of stakeholders, my encouragement to the government is to work quite closely with stakeholders to make this as smooth a transition as they possibly can. Just one example that comes to mind is the circumstance of real estate agents, who will need to indicate to potential buyers at different parts of the reform process whether the property that they are selling is subject to stamp duty or not, how far away they are from being included as part of the new CIPT process or otherwise.

Does that mean that the Treasurer needs to work with the Minister for Government Services to update the requirements within the contract of sale of a commercial property so that there is transparency around what stage of this reform and transitional process the property in question, the property for sale, is actually up to? There are these sorts of questions which really need to be resolved, and with two months to go before this reform is introduced I would hope that the government is doing everything it possibly can.

I do want to go into some detail just briefly to articulate to the house the reasons for the opposition’s proposed lowering of the CIPT rate from 1 per cent to 0.8 per cent in metropolitan Melbourne and 0.4 ‍per cent in regional Victoria. For example – and this is a fictional name, so no-one should think that I am speaking about them in the first person – let us for a moment imagine that Belinda owns a regional commercial property with an unimproved land value of $1 million and an improved value of $2 million. If Belinda bought that property today, she would pay 55,000 bucks in stamp duty, including a 50 per cent regional reduction. But under the proposal that we are considering today, if Belinda bought this property after the final stamp duty had been paid and held onto that property for 13 years, paying CIPT each year, she would have paid the equivalent of $114,061. I do not expect you to have a calculator with you, so I will help you out. The difference between $114,000 and $55,000 is $59,000, and this is the additional tax that Belinda would be paying – more than she would have initially had to pay through existing stamp duty arrangements.

That is why we think that specifically in regional Victoria there should be greater fairness, there should be greater equity and there should be, in recognition of regional Victoria, as there has been with stamp duty since Adam was a boy, a concessional rate of this tax for regional Victoria. I am looking forward to the contribution of the member for Ovens Valley, who will be up shortly, and hearing from the members for Gippsland South, South-West Coast, Mildura, Polwarth, Shepparton and Morwell. The member for Bulleen is also contributing to this bill. But specifically those colleagues of mine who represent a regional seat and a regional community I am sure will share with the house just the impact that this reform will have without consideration for regional Victoria, and I am looking forward to those contributions.

In conclusion, I believe that the coalition have been entirely reasonable in our contribution on this bill, in our consideration of this bill and in our proposals to better this bill. At the outset we do not disagree with the principle. In fact we agree with the principle. Stamp duty on commercial and industrial properties is a burden. It is a barrier to stimulating and encouraging economic activity in Victoria at a time when we need every stimulus to encourage more economic activity in Victoria and to inject more confidence into Victorian businesses. With that said, we believe that these reforms proposed by the government are unnecessarily complex. We believe that there is a question mark over fairness in relation to the difference between metropolitan Melbourne and regional Victoria. We believe that there are some transparency questions, specifically over the Treasurer’s rate of interest, the risk component of that 10-year loan, that 10-year interest rate. We do have question marks over the government’s flagged $50 billion economic uplift, and I would be interested to hear what government members have to say on that matter.

Finally, I would encourage the government to seriously consider the textual amendments that I have circulated in the house today. I would encourage the government to take this bill into a consideration-in-detail stage so we can go through those textual amendments clause by clause, line by line, and carve out a fairer deal for Victorians, carve out a greater transparency for Victorians and carve out a better deal specifically for regional Victorians. I think that is entirely sensible and I think that is entirely appropriate, and I plead with the government to do that. Failing that, I put on record that the coalition will then be moving to our reasoned amendment, which outlines the concerns we have with the bill. But we propose that the bill not proceed until these very important matters that I have articulated – not only on behalf of the coalition but on behalf of the stakeholders that we have engaged with – are considered.

Nick STAIKOS (Bentleigh) (11:51): Like the member for Sandringham I would also like to make a contribution on the Commercial and Industrial Property Tax Reform Bill 2024. I enjoyed listening to the member for Sandringham’s contribution as I always do, and he said a few things that I thought were very reasonable. Where he really disappointed me was when he had a dig at Victoria’s economy and the so-called mismanagement of the Victorian economy over 10 years. We have very short memories some of us in this place. Member for Sandringham, I remember coming into government in the 2014 election – before you joined the Parliament actually – and we inherited the worst unemployment rate in mainland Australia when we came to government. We did; the stats do not lie. Fast forward 10 years and we have currently got the lowest unemployment rate in Australia – that is according to some statistics that were released by the Australian Bureau of Statistics not long ago.

I appreciate that the member for Sandringham says that he wants a carve-out for regional Victoria and a better deal for regional Victoria. I am not from regional Victoria but there are members in the house currently who are, and no doubt the next speaker is going to speak passionately about businesses in regional Victoria. But I might point out two things that we have done for businesses in regional Victoria, and one of those is the 50 per cent stamp duty discount. During the 10-year transition period businesses will continue to receive that stamp duty discount, and then when you combine that with the transition loan it means that over the 10-year transition period regional Victorian businesses will be paying a relatively smaller amount year on year. I would also point out that under this government the payroll tax rate for regional Victorian businesses is just a quarter of what it is in metro Melbourne, which is significant – and that happened under our government. I will be interested to hear what the regional Victorian members of the house have to say.

This bill represents a shift from the traditional up-front stamp duty on commercial and industrial properties to a more equitable and predictable annual property tax system which will commence after a 10-year transition on newly transacted properties. The current stamp duty system adds to the cost of purchasing property. When applied to Victoria’s approximately 265,000 commercial and industrial properties, it discourages businesses from investing, expanding or relocating their operations, impeding growth and productivity. This reform seeks to do away with commercial stamp duty to open a pathway for businesses to thrive, enhance their operational capacity and contribute more effectively to our state’s economy.

In place of the current stamp duty arrangements a fair and stable property tax of 1 per cent on the unimproved value of commercial and industrial land will be introduced from 1 July 2024, and subject to the support of Parliament, with these changes there will be no complicated rate schedule or thresholds as there are with the current scheme. The tax will commence after a 10-year transition period from the initial transaction of the property, providing ample time for businesses to adapt and plan with certainty. This gradual integration underscores our commitment to a smooth transition, minimising disruption while maximising potential benefits for our economic landscape. If the property is transacted again, stamp duty will not apply again if the property continues to be used for commercial and industrial purposes, even if it is sold during that 10-year transition period before the tax is implemented.

The tax will not apply to the following: commercial or industrial property purchased before 1 July 2024 and properties primarily used for residential primary production, community services, sport or heritage and cultural purposes as coded by the valuer-general. The government has consulted with the property real estate and financial sectors when tailoring these reforms. The member for Sandringham just said that the opposition has also met with those stakeholders, and he would know that there is significant support in the industry for these reforms.

Replacing stamp duty on property purchases with a broad land-based tax has long been supported by a wide range of industry groups. The Henry tax review, the Productivity Commission and the Grattan Institute have recommended reforms to the existing arrangement for years. As a result, the industry not only embraces our proposed changes but also enthusiastically endorses them. The member for Sandringham mentioned that he met with the Victorian Chamber of Commerce and Industry, and the CEO of the chamber Paul Guerra said:

This is exactly the type of progressive tax reform that is required to free up stamp duty charges, which will accelerate building upgrades, stimulate investment in commercial property and free up more capital.

The first time a commercial or industrial property is transacted with a contract and settlement date on or after 1 July 2024, one final stamp duty liability will apply. The property purchaser must either pay up-front by choosing to self-finance or access a transition loan. To smooth the transition to the new tax system, the government will give purchasers of commercial or industrial property the option of accessing a government-facilitated transition loan as an alternative to self-financing the up-front and final stamp duty amount. In this way eligible purchasers who choose the transition loan option can transition to a smaller annual repayment from the time of purchase, freeing up capital businesses can use to invest in expanding and employing more workers.

The bill also updates the Taxation Administration Act 1997 to include enforcement and administration of taxation laws. It also permits sharing taxpayer information with the Treasury Corporation of Victoria to facilitate transition loans. The reform also gives the commissioner of state revenue the power, upon providing written notice, to recover property tax defaults. This aligns with existing land tax recovery practice. The bill strengthens anti-avoidance measures in the Duties Act 2000, introducing a change-of-use duty to prevent stamp duty evasion and to ensure properties enter the new reform scheme appropriately. Additionally, property clearance certificates will now provide information on the land’s tax reform status and tax obligations.

This is a transitional reform. It is not a simple adjustment to tax settings, it is a different way of taxing commercial and industrial property that will support businesses to grow and expand. This change reflects a forward-thinking approach to fostering an environment where businesses can prosper and contribute to a robust, dynamic economy. It will make it easier for businesses to expand or set up in the best location – for example, closer to their customers or where there is a growing workforce.

This reform is designed to be revenue-neutral over time. Economic modelling suggests that after 40 ‍years this reform will have added 12,600 jobs to Victoria’s economy and increased the size of the Victorian real economy by a cumulative $50 billion in net present value terms. Furthermore, Victorian businesses will be paying around $260 million less in stamp duty over the next four years because of this reform.

What this bill shows is that our Labor government is committed to transforming Victoria into a leading hub for business investment, because that is what drives jobs growth. But these reforms will not be the only change that businesses see on 1 July 2024, because our government will also be lifting the payroll tax threshold from $700,000 to $900,000, and 12 months later, on 1 July 2025, we will lift that payroll tax free threshold again, to $1 million.

Perhaps I will finish where I started: when we came to government 10 years ago we inherited the highest unemployment rate on the mainland, and that is a sign that under the last government businesses were not expanding, new businesses were not starting. They are now, and you can tell, because we do have a very low unemployment rate 10 years later in this state. This bill is a reform that the industry has called for. It will create new businesses, it will facilitate growth in existing businesses and I commend it to the house.

Tim McCURDY (Ovens Valley) (12:01): I am delighted to rise and make a contribution on this commercial and industrial property tax (CIPT) that is being introduced here today. It seems to me like not a month goes by without another tax getting introduced. I think we are at 53 or 54. I have just started to lose count of how many taxes – 53, I think it is, new taxes have been introduced. As Victoria certainly sinks further behind in this financial black hole that we have, Labor’s answer is to tax more and tax higher, and we all know that tax levels are directly related to competence – or in this case incompetence. We all remember that famous line on the eve of the 2014 election by the biggest crook Victoria has ever seen – and I am not talking about Ned Kelly there. As I say, we have seen 53 new or increased taxes since Labor came to power.

This tax is a CIPT, and just like land tax it will adversely affect non-traditional Labor voters. The ‘PT’ at the end really is a political tax; that is what the PT stands for as far as I am concerned. It follows on from the South Australian model, and the South Australian model seemed to work very well except they abolished stamp duty for this sector, the commercial and industrial sector, and they got the uplift that they hoped for in local economies. But Victoria decided, ‘We’ll follow suit, but we’ll also put another tax in place to replace what we’re losing.’ So you know, it is really not going to have the desired effect that they think is going to follow on from South Australia.

This tax replaces the stamp duty with an annual tax for all businesses that have to pay this on all commercial and industrial properties. It is small businesses who will pay the price here. They are the small businesses that this government detests, and they are going to get hit again. And for some businesses this could be the knockout blow. I am concerned for some of these small businesses who managed to survive the world’s longest lockdowns. They are just starting to get back on their feet and then along comes Premier Allan and knocks business to the ground again. Again and again it seems to be the case. If it is not –

Steve McGhie interjected.

Tim McCURDY: You might get your turn soon, member for Melton. You will not make much use of it, but you might get your turn.

Iwan Walters interjected.

Tim McCURDY: Dederang? You want to talk about Dederang? We cannot talk about it today. We had a go on that yesterday. Anyway, for many of these small businesses their property is their superannuation. Over many years they have squirrelled away money trying to create a nest egg for their retirement. And as I say, these taxes have come on, changed the dynamics of rents, particularly in the commercial and industrial area, and their nest egg, their superannuation, will start to deteriorate. The Victorian Labor government, due to their incompetence, due to their mismanagement and due to the fact that they cannot manage money, continue to go back and target the small business sector. Remember, we are introducing this only one week before Victoria’s worst budget on record will be delivered.

Labor backbenchers, I think you know what is coming, and I think a few of you backbenchers are very concerned about what might not be coming to your electorates anymore. We are used to it, because we are used to getting nothing from this government. But a few of you backbenchers are going to be very concerned because it is not going to get delivered.

Members interjecting.

Tim McCURDY: These backbenchers are very vocal now. I wonder what they are like in their party room. They are too scared to stand up. They are too frightened to question. They are very noisy in here, but they will pay a heavy price. All this 2022 crop will pay a heavy price – they will never be seen again. The irony is that those who made this mess, those who created the mess, have gone. One Premier is gone. Half the senior cabinet are gone. The Treasurer has got one foot out the door, hoping it does not slam on him on the way as he goes out. These backbenchers that are too scared to speak up in their own opportunity, that are very vocal here, are the ones that are going to be standing here holding the baby, those that are left here.

The member for Sandringham went into great detail on this bill. It is a very complex tax, so I do not think I need to go through all the detail of this tax, how it unfolds and how it affects people, because he did an excellent job. It is just another tax. It is just another dirty tax. What I will do is I will have to be back at my office when this week of sitting finishes, ready to answer the phone again when people start calling like they did about the land tax. The walk-ins, the phone calls and the emails on the land tax will start on this. Unlike some of the backbenchers, we answer our calls, we respond and we tell the world what we have been hearing from our constituents. I suspect there are many Labor backbenchers that are too scared to talk about some of the phone calls and some of the emails they get and the pressure that comes on them. Anyway, they will find out in time.

It is Labor’s misunderstanding of how business works. They just do not get that there are two ways you can reduce debt or make your loss less. You can either increase revenue – that is one way – or you can reduce expenditure. Never do they look at reducing expenditure on some of these failed projects. They are always going to touch up small business, put another tax on, try to increase revenue and make other people pay for their incompetence and this insatiable appetite to increase revenue and to increase taxes. Again, it is a bloody-minded approach by the Premier, a dogged approach. For example, they will not back down on the Suburban Rail Loop. They are not going to back down on this billion-dollar project of a train from nowhere to nowhere. They are not going to back down, but they will put more taxes on and continue to put taxes on. When you are beholden to the unions and the demand for jobs for the boys, the Premier is stuck. She has really painted herself into a corner.

The ones who created this mess, as I said, are gone, or most of them are gone – senior cabinet ministers. The Treasurer, with one foot out the door, will be gone by Christmas. It is a shame to see him go, because he is not a bad bloke. I think you have just got to ask him, and he will tell you that he will not be hanging around for the next budget, I can assure you. As I said, the backbenchers will be there holding the baby. Well done, comrades. Very noble of you to sit in silence while you get screwed over by the senior members of the cabinet. This tax will come into operation on 1 July 2024.

A member interjected.

Tim McCURDY: As I said, I am not going to talk too much on the bill because it has been done in full detail by the member for Sandringham, and I think he has done an excellent job in understanding the bill and this very complex tax. He has even got textual amendments and a reasoned amendment. It would be nice to think that that the government would consider that reasoned amendment. They have not got a history of doing so. It is that level of arrogance that says ‘We know everything. We are the font of all knowledge. We take no advice from anybody, particularly when it comes to taxes, because we’re the best in the business of creating more taxes.’

A member interjected.

Tim McCURDY: Well, you are the best in the business – 53, 54 new taxes. It certainly stands to reason that you are the best in the business. But as I said, my communities will feel the pain from this extra tax that the government has put on, whether it is our communities in Wangaratta, Bright, Myrtleford, Cobram and Yarrawonga, all those communities and all those small businesses. There will be a change in dynamic in how these rentals fold out. It is just sad to see our communities do not get a say in what is going on. It is this insatiable appetite of this government to tax, tax, tax, and we all know Labor cannot manage money.

Katie HALL (Footscray) (12:11): I am not sure what they have been putting in water in Tangambalanga, but none of that made any sense to me. But we do have a new slogan for the National Party, which is ‘We don’t take advice from no-one.’ It was a good line from that contribution. I would actually like to commend the member for Sandringham for his half-hour tax chat. I think he did very well. We got to the 18-minute mark before he introduced some amendments, and I think we were down to 12 minutes before we found out that the opposition were sort of supportive in principle, not opposing but introducing a reasoned amendment. So it has been a confusing contribution from those opposite thus far in this debate.

I am delighted to make a contribution to the Commercial and Industrial Property Tax Reform Bill ‍2024 and note that this is another part of the ambitious tax reforms that the Treasurer has been introducing, and he indeed announced this in the 2023–24 budget. One of the things I really like about this bill and this reform is that it complements the work that the Treasurer has already done in terms of introducing and expanding the vacant residential land tax for sites that are undeveloped for more than five years. This is something that has been an issue in my electorate of Footscray and something I want to touch on before I get to the substance of this bill. One of the issues I have spoken about in this place a number of times and within my community in Footscray is the issue of land banking. We have very large undeveloped commercial sites in Footscray which potentially – they have permits – could be developed. I think in particular of the Forges site in central Footscray and the impact that that site being undeveloped has had on my community. Forges closed 16 years ago, and it is a really significant site in the centre of Footscray which is now in a state of disrepair. Frankly, the owners of those properties should be ashamed for the state that that has been left in and the impact that that has had on surrounding businesses. It is something that is raised frequently in my electorate office. It is something that has caused a great deal of community concern. When we expanded the vacant residential land tax to those undeveloped sites, that sent a clear message that these sites should be developed.

We are in a housing crisis. There is the potential in these well-located parts of my community for this sort of development to take place. That was a reform that I was very pleased to support last year after a campaign that many of us, particularly in inner-city seats, led around issues of land banking and the impact on our community. This reform progressively abolishes stamp duty, again incentivising the activation of commercial and industrial property, and replaces it with a more efficient annual tax based on unimproved land value, which is to be called the commercial and industrial property tax. This new tax system will apply to commercial and industrial property transactions with a contract and settlement date on or after 1 July 2024.

The benefits of this are obvious. The Shadow Treasurer spoke about his consultation with VCCI in his contribution, and I think Paul Guerra is going to be quoted quite a few times during this debate. Paul Guerra the CEO of the Victorian Chamber of Commerce and Industry, said that:

This is exactly the type of progressive tax reform that is required to free up stamp duty charges which will accelerate building upgrades, stimulate investment in commercial property and free up more capital.

I think that pretty succinctly describes the enthusiasm from the chamber of commerce and industry for these reforms, which they have been very strongly supportive of.

Of course by removing a barrier in terms of stamp duty to investments in commercial and industrial land there will be flow-on effects throughout the economy, and the economy is going well. The member for Bentleigh spoke about our regional unemployment rate. Our unemployment rate across Victoria is at a record low, and when we came into office it was very high. Despite the fact that we suffered from a global pandemic and that there have been very challenging global circumstances that we have dealt with, where we invested to save business and to support our economy and the health system, we have continued to have low unemployment, and we are getting the economy moving again after the terrible global pandemic.

Obviously the removal of stamp duty will encourage businesses to expand or set up in the best location; for example, closer to their customers or where there might be a growing workforce. It will support businesses to invest in buildings and infrastructure, and it will promote a more efficient use of commercial and industrial land. In my electorate of Footscray this is really exciting news because we have large tracts of industrial land that are very close to the city and close to the port but are underutilised, and the potential to activate this land – I am thinking of locations such as Tottenham – will have flow-on effects in my community in Footscray.

Reforming stamp duty has been recommended by numerous inquiries over recent decades, including the Henry tax review, the Productivity Commission and the Grattan Institute. This change means that a retailer will be more likely to buy the new premises that they need for their business to take the next step – for a transport company, for example, to move into a larger warehouse. Over the last year we have seen a number of reforms which are helping to build more houses and encourage property developers to get moving with the sites that they may have left unimproved for more than five years, but we are also taking the pressure off by removing stamp duty and encouraging businesses to develop, purchase and move into property and expand their businesses.

Whilst I was a little bit confused by the contribution of the member for Ovens Valley, this bill is about removing stamp duty, something that is strongly supported by the business community and will have great effect in his electorate of Ovens Valley, which I am very familiar with, and in the city as well in electorates like Footscray, where industry is changing. The industry of old is transitioning, and this is a great opportunity for people to grow their businesses into the future.

David SOUTHWICK (Caulfield) (12:21): Labor cannot manage money, and we are all paying the price for this with a record amount of taxes here in this state – 53 taxes, and we heard a 54th tax earmarked only a few days ago, the big housing tax, which is earmarked for potentially looking at some amount of money that will be charged right across the board, a universal levy right across housing. We will be looking out for that in the budget and seeing what the implications are for many of those that are trying to get into their first house in terms of home ownership and also the importance of providing new housing stock.

I was very interested too in some of the contributions we have heard. Earlier on, the member for Bentleigh was talking about how we have seen such an increase in businesses coming to the state and how wonderful everything is. If you had just heard that contribution in isolation, you would think that Victoria and businesses were growing at a rapid rate of knots, but nothing could be further from the truth. In fact only in February we heard that Victoria has fewer new businesses and startups than anywhere in the country, while many existing businesses are being forced to shut up shop and industry leaders are warning that the state is going backwards. An article in the Herald Sun says:

At the same time New South Wales recorded an increase of 13,000 new businesses while Queensland saw an increase of 7600.

Victorian businesses are also closing at the fastest rate, with 129,095 closing in 2023, 22,796 more than in 2021.

Another article says that the ABS:

… released data showing that Victoria recorded a net decrease of 7,606 businesses during the 2022–23 financial year.

And it cites:

The rising cost of doing business in Victoria prompted many firms to relocate interstate or overseas, with rising state taxes being one of the key reasons cited.

We know that Victoria has a larger amount of taxation than any other state – the largest taxing state in the nation – and one of the key components of those taxes is property taxes. We know that whether it be stamp duty or whether it be land tax it is absolutely huge, and we see it a lot in residential and we also see it in commercial. I understand that the government is looking at trying to modify things in this particular bill that is before us today, looking particularly at stamp duty. But some of the concerns here particularly relate to small businesses, because small businesses are the engine room of this state. Small businesses are the ones that employ the most and that are the most innovative and creative, and in most of our electorates we know small businesses that do so much for the community – not just for business and for employment but for the community as well. They sponsor footy clubs and they sponsor all kinds of school activities and everything else. They are literally part of our community.

The concern that I have with this bill is its ramifications for small businesses. The annualised fee of stamp duty that is proposed here – what does this mean for small businesses? Part of the reasoned amendment moved by the member for Sandringham, the Shadow Treasurer, shows it is really important to understand some of these ramifications. What will the consequences be in terms of potential borrowings if they do borrow and choose one of those options that are put forward as part of this bill? What will the cost of those borrowings be? Unlike big business, small businesses, when they purchase commercial property, tend to do so for a long period of time. They do not turn over insofar as you might see a bigger business do, a large shopping centre or a supermarket where they might turn property over; small businesses are in it for the long haul. We need to ensure that small businesses are protected as part of this so we do not see more small businesses shut up shop and go elsewhere because of the taxation that this government continues to impose on many of these small businesses that are already doing it so tough. That is really a key element to all of this.

I note the member for Footscray cited Paul Guerra and the Victorian Chamber of Commerce and Industry and what VCCI has had to say. VCCI released a report on the cost and ease of doing business in Victoria, and there are so many telling things in this report. It talks about conducting a root-and-branch review of Victoria’s tax system with the aim of optimising state revenue collection to deal with the costs facing Victorian businesses while also making Victoria the lowest taxing business jurisdiction in Victoria. Wouldn’t that be great? At the moment we are the highest taxing jurisdiction. Wouldn’t it be great to have something that encourages businesses to invest here, not just local businesses but even international ones as well? When I speak to a number of the consuls, as I have been doing, a lot of them are saying that they are looking to other states because Victoria does not provide the same attraction of investment, and the cost of doing business and taxation are key reasons for that.

The VCCI report reveals Victorian businesses pay the highest national and state taxes relative to gross state product in the country and that the public sector is the smallest in Australia compared to overall workforce. More than half of the national businesses said it was the hardest place to do business in the nation. Paul Guerra was quoted in that article I mentioned earlier. He said:

We now have to look at this data to work out what is going on and reverse those trends …

in terms of people leaving the state. The article continues:

“The cost of doing business in this state and the ease of doing business in this state is not the best.

“And if you’re not first, you might as well be last.”

Mr Guerra said some businesses were looking to move main operations from Victoria because of restrictive new and increased taxes.

Here is a situation where you have got the head of VCCI saying that people are moving, that people are choosing other jurisdictions, and it is largely because of our taxation system. We do absolutely need reform. I note the Shadow Treasurer is doing a major review of taxation and has spoken to a number of businesses, a number of industry bodies, including VCCI and the Australian Industry Group and a number of others, a number of mums and dads and property organisations as well, to understand what would be a fairer way to get our taxation system right and, importantly, to grow the state.

We know, as I started this contribution by saying, that Labor cannot manage money and we are all paying the price. I know that is very easy to roll off the tongue, but unfortunately it is so true. In everything that you see – record state debt. We are approaching $200 billion in state debt – $15 million a day just to pay the interest on our state debt. Imagine what you could with that $15 million a day – that is the interest, that is not to pay down the bill. If it is a home loan, you are not paying off your home, what you are doing is you are just paying the interest. It is $15 million that we are paying in Victoria each and every day just to pay the interest bill on our debt.

Our state is in absolute disrepair. There are two ways you can do things. You can, as many good businesses would do, grow revenue and grow sales. And how do you grow sales? You encourage investment. You get the private sector – many of the businesses that we are talking about today as part of commercial property – to turn around and say, ‘Come here, invest in here, grow your business, employ people and create opportunities,’ and that will ultimately reduce debt. You could do that. Or you could just tax people more. That is the lazy way. And that is the Labor way – just to tax people more, because if you just tax people more, ultimately you will get money and you will pay down your debt. Well, each and every year we keep seeing Labor taxing people more and the debt going up. So not only are we taxing people more and encouraging less investment – so you are not growing the pie; people are leaving – but also Labor are not managing their projects. We see the blowouts on all of the major projects under the current Premier, who was the former Minister for Major Projects – nearly $40 billion of major project blowouts under Jacinta Allan and on her watch, now including the Suburban Rail Loop. Each and every seat in our electorates will miss out because this government is absolutely focused on delivering a rail line to nowhere. So here is a government that cannot manage money, cannot manage major projects and has debt blowouts going absolutely gangbusters, unfortunately, and Victorians are all paying for its incompetence.

Daniela DE MARTINO (Monbulk) (12:31): I rise today in support of the Commercial and Industrial Property Tax Reform Bill 2024, which marks a pivotal shift in Victoria’s commercial taxation policy. This legislation seeks to overhaul the taxation framework governing commercial and industrial properties, transitioning away from the stamp duty model to a more streamlined and efficient tax system – something that those opposite often call for. Now that we are doing this there are still laments coming from the other side of the chamber. This reform has actually been heralded by experts across various sectors, including some of the businesses across the district of Monbulk. Brendan Coates, who is a program director of economic policy at the Grattan Institute, stated back in May last year that:

Major state tax reforms are few and far between in Australia, which –

is what makes this announcement –

… very, very significant.

Quentin Kilian of the Real Estate Institute of Victoria stated that:

The Victorian Government’s abolishment of stamp duty for commercial and industrial property sales is an encouraging sign for the sector, and Victorian businesses more broadly.

These reforms exemplify how the Allan Labor government is able to respond to the changing nature of business needs across our state. This bill introduces a comprehensive framework to facilitate this transition. It is establishing a new act while amending existing legislation to accommodate the changes. This legislative effort follows our very bold announcement made in last year’s budget, and it incorporates invaluable feedback which has been garnered from extensive consultation with stakeholders and industry groups. At its core, the new tax system outlined in this bill will abolish stamp duty – or the land transfer tax, as it is technically known – on commercial property transactions. Stamp duty payments will be made for the final time, paving the way for a 10-year transition period during which this newly proposed property tax will take precedence. To ensure a smoother transition into the new tax regime, eligible purchases will have the option to access transition loans to cover up-front stamp duty costs.

The legislation itself outlines really clear criteria for properties to enter the reformed tax scheme. Properties that are transacted post 1 July this year will automatically become subject to this new tax framework, with up-front stamp duty payments being a one-time affair, so to speak. Notably, certain transactions, such as landholder acquisitions, are exempt from triggering entry into the reform scheme, and that is going to preserve flexibility in specific contexts. So existing stamp duty concessions will continue, ensuring continuity in certain property transactions. These include, for my district of Monbulk, the primary production exemption under section 65 of the Land Tax Act 2005, which provides an exemption for land located outside greater Melbourne when it is used for primary production. I have mentioned in this place before that my electorate is the horticultural capital not just of the state of Victoria, but of the country itself, I will claim. This continuity of existing stamp duty concessions will provide a predictable and certain outlook for the multitude of growers across the district of Monbulk.

A member interjected.

Daniela DE MARTINO: ‘Hear, hear!’ to that indeed. The cornerstone of this reform is the introduction of commercial and industrial property tax at a flat 1 per cent, which will supplant the stamp duty for eligible properties. While stamp duty will be paid one more time, the reform offers, as I mentioned before, the transitional loans, and they will be available for eligible purchasers, which empowers them to finance up-front stamp duty costs and transition seamlessly into the new tax system. That underscores our Allan Labor government’s commitment to fostering a strong environment for business growth, and we do have form in this regard. I have to pick up on what has been said already today and some of the conjecture from those opposite about this government. I just want to point out the changes we made when it came to payroll tax, which we have made much fairer for businesses. I had to pay payroll tax, and I was actually lucky enough that one of the thresholds increased during my time of owning my business. That had a significant impact on my capacity to employ more people and to be able to increase my wages.

The current payroll tax free threshold of $700,000 is too low, and we acknowledge that. As the member for Bentleigh duly noted, we cut the rate of payroll tax for the regions down to 1.2125 per cent. This increased threshold of $700,000 we are going to take even further up; we are increasing it to $900,000 from 1 July, and by 1 July next year it will be $1 million. These reforms are going to save around 26,000 Victorian businesses up to $14,550 per year, and around 6000 of those businesses are going to stop paying payroll tax altogether. That is fantastic for our business community, absolutely, and I know it makes a difference. It absolutely makes a difference to the bottom line, and it means that employers have greater confidence in employing more people or being able to increase the hours of their current workforce, because they know that that tax bill will not be awaiting them at the end of the year.

I feel it is really incumbent upon me to point out the record of the former coalition Victorian government between 2010 and 2014. I would like it put on the record that during the four years of 2010 to 2014 payroll tax stayed at a static 4.9 per cent and the threshold was $550,000 per annum for every single year. They did make one shift in their final budget, and that was by cutting the tax rate by 0.05 per cent for the financial year of 2014–15.

Lauren Kathage interjected.

Daniela DE MARTINO: Hold the front door for sure. It is hardly what one could regard as an earth-shattering legacy in assisting businesses across the state of Victoria. We know that reducing payroll tax actually has a benefit, because a study by the Department of Treasury and Finance back in 2021 looked at the effect of lowering payroll tax in the regions and found that businesses facing lower payroll tax bills compared to their metropolitan counterparts increased their total wage bills. What does that mean in real terms? It means more people were paid money in the regions to work. That is a wonderful, wonderful move, and that was a Labor government that initiated that. It was a Labor government that knew that small businesses are important.

I think it is really important that it is noted here that, although those on the other side of the chamber may decry many things that occur here and claim to be the friends of business, in the four years where they actually had the opportunity to make an impact, to have an effect, to assist small businesses, what did small business get? A 0.05 per cent payroll tax rate reduction.

A member: What was that?

Daniela DE MARTINO: 0.05 per cent – as I said, hardly earth shattering, definitely not something to crow about. But we have a lot where we can put our hands on our hearts and say, ‘We did this. We made an impact. We improved the situation for businesses in the regions and across the state.’ I experienced some of that impact, and if you are a business today in the state of Victoria, next year you are going to have to have a payroll of more than a million dollars to have to then actually pay – at a very low rate compared to what it once was. If you are in the regions, it is tiny. It is a small amount compared to what it was in the state of Victoria. I am glad I managed to put that on the record. I think it is important that the facts are dealt with in this place. We deal with facts, not conjecture and not fearmongering.

What else are we doing? We are also cutting the cost of running business by abolishing business insurance duty, and we are going to be the first state in Australia to do so. Again, let us put that on the record, because that is worth crowing about. The rate of insurance duty on fire and industrial special risks, public and product liability, professional indemnity, employers liability and marine and aviation insurance will be reduced by 1 per cent each year from 1 July. These reforms could save businesses about $3200 in professional indemnity insurance and about $2400 in fire and other special risk insurance cumulatively over 10 years. We are making it easier to start and run a small business in Victoria through a regulatory reform agenda, driving business investment and growth by cutting red tape and streamlining licensing and approval processes.

I seem to always run out of time because I get quite excited about these things. I have so much more to say, and the clock is running down, but in terms of this bill that we are discussing today, I know it holds significant promise for the district of Monbulk. We have a manufacturing sector; we have a large industrial area in the foothills. This will assist small and medium businesses to have confidence that as they expand they can purchase a new property and they will not be subject to stamp duty as they have been. It encourages growth. I commend the bill to the house.

Matthew GUY (Bulleen) (12:41): A bit of delusion over, and now we will start getting some facts back into this equation. If businesses are going so well in Victoria, why are there 8000 fewer of them today than there were a year and a half ago?

A member interjected.

Matthew GUY: It’s too loud for you? You can go outside if you like. If it’s too loud for your ears, go outside. There are 8000 fewer. There is no use trying to lower one tax when you have added 53 ‍others. ‘Oh, God, we’re doing one, but we’ve got 53 others.’ The property sector accounts for half of those 53.

It gets worse, because we on this side do not forget what Daniel Andrews said on the eve of the 2014 election when asked, ‘Do you promise Victorians here tonight that you will not increase taxes or introduce new taxes?’ That was Peter Mitchell. And what did Andrews say? ‘I make that promise, Peter, to every single Victorian.’ A decade and 53 new or increased taxes later it is no wonder there are 8000 fewer businesses in Victoria today then there were a year ago. We have got the government coming into every question time saying, ‘We’re going to build more houses, we’re going to encourage more houses, we’re going to do this with houses,’ and the property sector is collapsing in this state because they are bearing the brunt of 27 new taxes in a decade. We said this on this side of the house: if you tax this industry to death, you are going to kill it, and they have.

Why do we have a housing crisis? We have a housing crisis because for eight years we had a planning minister who said, ‘I will not approve something that I myself would not live in.’ Talk about insular; talk about insane. If you do not live in a double-fronted terrace home in Richmond, it is not going to be approved. If a couple of left-wing academics or a journo whose spouse is on the take down at the Age do not approve of it, you will not approve of it. And that is the problem. We had a planning minister who did nothing for a decade – almost no precinct structure plans, almost no major tower approvals, almost no urban growth zones reforms – compared to our four years when there were more PSPs approved than in the whole decade of these people in power. There were more downtown apartments approved than in the whole decade of these people. And then they come into this chamber and say, ‘Oh my God, there’s a housing crisis.’ Cooee! You are the problem, you fools. If you had approved something, we might not have the housing crisis.

Steve Dimopoulos: On a point of order, Acting Speaker, the member cannot call people fools. That is unparliamentary language. I would call the member for whatever seat it is to account.

The ACTING SPEAKER (John Mullahy): There is no point of order.

Matthew GUY: Well, it is quite amazing. In 20-odd years in this place I have not raised a point of order despite all the things you threw at me, all the things your side throws. And, little glass jaw, you cannot handle being called a bunch of fools. I did not call you a fool – I might have – but the whole lot of you are. Here he goes, up goes Frankston. He is the epitome of the word.

Paul Edbrooke: On a point of order, Acting Speaker, I have been called worse things by much worse people and much better people too.

The ACTING SPEAKER (John Mullahy): What is the point of order, member for Frankston?

Paul Edbrooke: My point of order is: could you please bring the member back to the bill at hand?

The ACTING SPEAKER (John Mullahy): There is no point of order.

Matthew GUY: We were talking about growth areas, who are going to bear the brunt of these taxes too. There are 27 of these new taxes. Here is another one. The member for Sandringham is right to bring in a reasoned amendment, because we have got no choice but to try and save a bit of business in this state, given there have been 8000 fewer in the last 12 months. Melbourne Water is a massive drain on growth area development. Cultural heritage is out of control under this government. There are no statutory time frames. Geelong is now more expensive to buy land in than Melbourne. There go regionalisation and decentralisation, murdered by a government who have approved nothing and who have held no council to account. That is what they have done. That is your growth areas. No wonder with Melbourne’s growth areas you just cannot get anything approved. No wonder land prices are going through the roof. No wonder they are still operating off PSPs that I approved, because three ministers have done nothing. Snooze, Lose and Moron have all done nothing for the last decade. In downtown Melbourne they have destroyed the foreign investor market, ruined the foreign investor market. It was the strongest in Australia, with hundreds of millions of dollars worth of investment in the CBD – destroyed by this mob. Their setbacks policy is a disaster. There is no confidence in the City of Melbourne or this government in the downtown area. There is no policy to bring back foreign students. There have been almost no major approvals in the best part of a decade. That tells you everything about confidence.

But I am glad the other side is talking about purchasing one block of land in the suburbs as the measure of success for a policy – one block of land in the burbs. How about seeing economic confidence in our state by putting in place business and taxation policies that encourage people to come to Victoria, not 53 that discourage people from coming to Victoria.

The middle-ring suburbs – we hear the government talk about middle-ring suburbs every question time, do not forget. And I heard the term before from this debate right now. This is the government that bagged development in Melbourne’s major activities areas. It was Andrews that called them a forest of skyscrapers, a forest of towers. It was Andrews who said that. Lo and behold, what do we have now?

Lauren Kathage: On a point of order, Acting Speaker, I believe the member has – it is a bit hard to hear because of the distortion from the volume and the anger –

The ACTING SPEAKER (John Mullahy): The point of order, member for Yan Yean?

Lauren Kathage: I believe he has strayed from the substance of the bill.

The ACTING SPEAKER (John Mullahy): There is no point of order.

Matthew GUY: As I said, it was the Premier Daniel Andrews who said, ‘You’ll be in a forest of towers.’ And what do we have now? We have a government that says, ‘Oh, my God, we’ve got to get towers in major activities areas.’ Well, of course we do. Come down, Aladdin. Rub the lamp, and out come major activities areas. It was so obvious then and it is so obvious now. It is in Plan Melbourne, which this government adopted and which our government put in place, but Labor bagged it and bagged it and bagged it. Wynne did almost nothing for eight years as minister. The mayor of Melbourne was just surrounded by a bunch of academics and those folk – not all; one or two – down at the Age who fuelled his hatred of developers and growth area development. But these are people’s homes. This is where Victorians come and live. All those towers which these academics and left-wing types bagged are homes for new Victorians – a home for someone who cannot afford a house and land package but can afford an apartment. They were bagged by this government and they were demonised by this government. And now we have a housing crisis – because of this government.

This government comes into the chamber and says, on this bill, ‘We’ve got all the answers because we’re just kind of changing one,’ but it has added 27 other new property taxes which have cruelled the market in Victoria and sent investment to Brisbane – which is now expanding and going through the roof, and it will even more when the Liberals win later in the year – and Sydney as well.

And in Melbourne’s market, by the measure of success, look at how many cranes are on the skyline compared to a decade ago when there were more than 70 under the coalition. You could not count seven today, and that tells you all you need to know about this government and business confidence in this state, because take out the government-funded projects and the cranes for those across the suburbs and there would be fewer than 20 major boosted jumping cranes throughout the metropolitan area, and that is because this government has cruelled development in our state. They have taxed the death out of it. They have taxed it to Queensland.

They roll in here, all these amateur hours, reading dot points – it is easy to read a dot point, for God’s sake. Come and actually speak what you believe. But they cannot do that and they will not do that, because they do not believe in anything – because the policies that they did believe are from the last decade, which is approving nothing and doing nothing and locking Victorians out of homes in regional Victoria, in growth areas and in the downtown area. At least we did what we believed in, which was getting houses to Victorians, as opposed to these fools who approve nothing and the sheep who roll up in here and read dot points because they are too dumb to have an opinion of their own.

Paul HAMER (Box Hill) (12:51): Wow, what an act to follow. I think the member for Bulleen has again clearly demonstrated his desire to take the leadership of the Liberal Party again. I remember that during the previous term there was a similar speech that attracted many thousands of views on his Facebook page, and that did lead to a push later on, so I am sure that all the Liberal members will be on alert now that, clearly, the member for Bulleen has stated his intention. I do want to speak about the bill because it is an important reform –

Members interjecting.

Paul HAMER: Well, people might want to tune in to actually find out what the bill is about, rather than the drivel that the member for Bulleen talked about. It is an important reform particularly in terms of the business investment and the investment for commercial and business properties. I think we just have to have a look at the supporters of this bill who traditionally would not be considered as supporters of Labor governments or Labor policies but have identified that reforms of this nature are really important in terms of the growth of employment and business in this state. For example, Quentin Kilian of the Real Estate Institute of Victoria has said:

The Victorian Government’s abolishment of stamp duty for commercial and industrial property sales is an encouraging sign for the sector, and Victorian businesses more broadly.

And the Victorian Chamber of Commerce and Industry (VCCI), soon after the budget was released last year when this initiative was flagged, said that:

We believe it’s appropriate reform and it will stimulate growth and productivity in that sector for years to come.

There are a range of other businesses – I think Paul Guerra from VCCI was mentioned, obviously the Grattan Institute and many others, the Productivity Commission, the Henry tax review – that have all identified reforming stamp duty and instituting a broad-based land tax in place of stamp duty as a move to a more efficient taxation system that can encourage investment and business development. It will encourage businesses to expand and set up in the best location, work closely so that they can set up closer to their customers or where there is a growing workforce and support businesses to invest in buildings and infrastructure.

I want to particularly spend some time on how I see this bill playing out and affecting my community in Box Hill. Box Hill has been identified as a metropolitan activity centre for many, many years. Sometimes it has changed its name, but since 1954 it has been identified as a major employment precinct. Particularly in recent years there has been a strong focus on the health and education precinct, with anchors such as Box Hill Hospital, Epworth, and of course the Box Hill Institute.

The Whitehorse council back in 2019 undertook structure plan work for the metropolitan activity centre of Box Hill, and it had a look at employment forecasts and residential forecasts for the Box Hill activity centre and also the permits and applications that were under consideration at the time. They had two forecasts, one being a higher employment growth forecast. In 2016 they estimated there were about 18,500 jobs in the Box Hill activity centre and that the number of jobs would increase by between 8000 and 11,000 by 2036. If we look at the Suburban Rail Loop business case, which is over a slightly larger area but again most of the jobs are concentrated in the commercial district of Box Hill, that estimates that in 2056 – so another 20 years further on than that – there will be 48,500 jobs within that precinct, a really growing employment hub. And of course you need to have the accommodation, particularly the commercial accommodation, that can house all of those workers.

If I can return to the Metropolitan Activity Centre Structure Plan released by the Whitehorse council, at the time they looked at the permits that were in place that had already been approved by council and those applications that had been put forward to council and had not yet been approved, and they identified that there were a sufficient number of dwellings that had been approved or were in the pipeline to satisfy 18 to 20 years worth of housing demand, but in terms of employment floor space there were permits or applications for 75,000 square metres, which would only satisfy four to six years worth of employment demand. If you think about the time line that is required to deliver particularly commercial buildings – go through the design, the consultation process, the planning and planning approval process and then construction, particularly in a place like Box Hill where in the central part of Box Hill you are talking about commercial buildings which are 20 to 30 to 40 storeys high – they are long planning periods and very long construction periods as well, so starting that process now you are probably not going to have it finished in six years time, even with a fairly smooth process.

It just goes to show that having incentives that can encourage businesses to invest in those commercial areas is going to be really important to make sure, particularly when it relates to a conversion of stamp duty to land tax, that in the long term that is going to mean a more efficient use of the land and an encouragement for those landowners to develop those parcels of land for their highest purpose. Having those taxation measures in place is really going to encourage the property owners in Box Hill to utilise that land to its maximum utilisation and encourage the development of commercial and industrial properties.

As has been stated, just to reiterate the key components of the bill, it will come into effect on 1 July 2024, applying to –

The ACTING SPEAKER (John Mullahy): I will interrupt the member for Box Hill. The time has come for lunch. The member for Box Hill will have the call when we come back to the bill.

Sitting suspended 1:00 pm until 2:02 pm.

Business interrupted under sessional orders.