Wednesday, 30 October 2019

Bills

State Taxation Acts Further Amendment Bill 2019

Second reading

Debate resumed.

Ms STALEY (Ripon) (11:51): I continue my contribution on the State Taxation Acts Further Amendment Bill 2019. Before the break I had got to the part where I was talking about our concerns with clause 8 of the bill, which institutes retrospective legislation. We agree with the Law Council of Australia, who oppose in principle the enactment of legislation with retrospective effect. The reason they put, and we agree with, is that that principle is enshrined in the rule of law. The idea of the rule of law is that you have to be able to know what laws you are subject to at the time they are enforced. You cannot retrospectively be told you did the wrong thing when that was not the law at the time; it is a very well-known principle of jurisprudence. We are now in a situation where, buried in an omnibus bill, we have retrospective taxation legislation.

It is particularly, I think, problematic that while the Treasurer’s second-reading speech continues to assert that the government believes that the law as it stands—and we agree—says one should pay stamp duty on insurance irrespective of whether one has taken out that policy with an Australian insurer or an overseas insurer, at the same time it goes on to say, ‘However, in case we are wrong’ and I am paraphrasing here ‘we are going to make it retrospective that that’s what it says’. It is just not an acceptable use, in my view—

Mr T Bull: It’s just not right.

Ms STALEY: That is right, member for Gippsland East, it is just not right. If in fact the law is right—and we should put it before the house that there are cases before the courts on this, so I am mindful of what can and should be said on this topic—then to retrospectively seek to amend legislation just because somebody seeks to test it through the courts is, to me, unconscionable.

Just because somebody seeks to assert their rights by taking it to court to see whether the legislation is doing what—we accept people should pay the duty. We absolutely think that it should not matter whether you use an Australian-based insurer or an overseas-based insurer. Clearly the intent is that you should pay the duty—and people have paid the duty. There is no suggestion that this is anything other than stopping some people who are now seeking to test whether the law is robust. Now, if the law is not robust and if their actions succeed, that has been a drafting error. That is a problem. It is not a reason to go back and say, ‘Well, no. You won in court, so now we’re going to retrospectively take that off you’. So we have very, very severe concerns with this aspect of the bill. As a result of that, I now move:

That all the words after ‘That’ be omitted and replaced with the words ‘this bill be withdrawn and redrafted to:

(1) take into account further consultation and modelling about the proposed changes to the Duties Act 2000, the Land Tax Act 2005 and the Valuation of Land Act 1960; and

(2) retain the remaining provisions of the bill.’

The impact of this reasoned amendment, which I put to the house and hope will gain support for it—as I have said, we support the changes to the Anzac Day fund. We understand why the government has brought those forward and we support them. And there are other parts of this bill that are non-controversial, but the structure of the bill means that for us to get to the heart of this retrospective legislation and also the extension of the vacant residential land tax we can only take this path.

At this point I think we do need to make it clear that we would have moved textual amendments to the bill had we been going into consideration in detail. But we have not been given a guarantee that we will go into consideration in detail, and as a result we cannot have textual amendments put. We have no choice but to go the reasoned amendment route and say, ‘Go back to the starting line. Let it sit’. We make it very clear that we would prefer that the bill have a chance to be amended so that the provisions for the racing industry and the Anzac Day veterans fund are brought into law expeditiously, although of course we are some way away from the next Anzac Day, so we do have some time there. The key problems we have with these two aspects in particular mean that we feel that they need to be removed. We have no chance to do that, to put that option before the Parliament, to make the government—make everybody in this place—debate whether they think retrospective legislation is worthy and be given the opportunity to take it out. Because of that, I have now moved this reasoned amendment.

Of course there are reasons we have state taxation amendment bills, and they are twofold. One is to enact new taxes or change taxes and the other is to clean up mechanical things that the government or the clerks say need to be done. This bill does include some of that. But it is also a revenue-raising exercise, and it is one of three bills that we have before the house this week which seek to raise revenue. This, perhaps bizarrely, being the one that is called the State Taxation Acts Further Amendment Bill, will in fact raise the least. The greater amount will be raised by the Building Amendment (Cladding Rectification) Bill 2019, but then there is also the Melbourne Strategic Assessment (Environment Mitigation Levy) Bill 2019.

I note that with the extension of the land tax for uninhabitable properties, to force people to have them renovated, plus these other two bills, the government is once again attacking the property sector. It has a never-ending—

Mr Angus interjected.

Ms STALEY: You are right, member for Forest Hill, it is a cash cow. But even cash cows run dry at some point.

At this point I would note that there has been some research into how voting patterns have changed, and that goes to the taxation base, because there is an issue around redistribution here. Of course the great modern redistribution economist would be Thomas Piketty. He is well-known to this house because the member for Essendon tells us a lot about him. However, I would note that Thomas gave a new presentation on his new book, which has only been published in French so far. The presentation has, thankfully, been translated—not by me, you will be pleased to know; my French is nowhere near that good. What he is looking at is the disconnect from the left of lower income and lower education voters from the Brahmin left, the intellectual elite. This has meant that redistribution issues have become less central. This is the core of his work. It tells me that this government has in fact been captured by the Brahmin left. They have been captured by the Brahmin left because they are no longer interested in the workers and those who seek wealth through property—and we know that in Victoria that is a key way most people hold their own wealth and hold their investment wealth. They are now actually abandoning those groups en masse because for them that is not where their voting blocs—certainly of those in the Parliament—are coming from. I do suggest to those in the Parliament that they may wish to get hold of this presentation from Mr Piketty. The whole idea of redistribution through taxation appears from the master himself to no longer be of the same need.

When we look at why it is we have all of these taxation bills, it is because they have run out of money. Why have they run out of money? Spending is out of control in every way. We saw an additional billion dollars, near enough, on the wages bill from what was expected when the latest update came out from the 30 June massive report dump. We constantly have new taxes.

I would remind the Parliament that of course prior to 2014 the then opposition leader, now Premier, promised no new taxes. When he was asked by Peter Mitchell on Channel 7, ‘Do you promise Victorians here tonight that you will not increase taxes or introduce any new taxes?’, the now Premier vowed, ‘I make that promise, Peter, to every single Victorian’. Of course he has now broken that promise 14 times. We have got a new tax, which is the cladding rectification tax, coming before the Parliament today. So there we go: 14 times he has broken that promise with new taxes. But then there is a whole raft of additional taxes that he has expanded. The list is long and, as I say, growing. When you put in the ones that are expanded, he has now well over 20 new taxes. Every one of these taxes, every one of these Andrews Labor government taxes, is being passed on to Victorian households and businesses, and they push up the cost of living. In the end, that is what Victorians feel every time they see this. They do not look at this and say, ‘Oh, it’s some huge property developer doing this’. What they see is the property price of the apartment that they are trying to buy going up because we are putting new taxes on through not this bill but bills here, because this government has just run out of money.

I also turn to the Treasurer on this topic. Prior to the 2018 election, on 22 November 2018, the Treasurer launched Labor’s Financial Statement 2018 and said:

It contains no new taxes, whatsoever. No tax increases, no extra charges, it’s all there in black and white.

He has broken that commitment prior to today, but he is breaking it again today because it is a new tax when you extend the vacant residential land tax to those vulnerable Victorians who are forced to leave their homes because they can no longer live in them because they are frail and are going into aged care. It is a new tax on them that they have to pay at 1 per cent of the capital improved value (CIV) for as long as they hold their property but do not have tenants in it, even though to renovate to be able to have tenants in it may cost an enormous amount of money if it could be organised. There are plenty of family situations where it is just not that simple.

I suspect that one or more of the speakers following me from the government side will say, ‘Oh, but there are ways to have exemptions and you can have it extended in special circumstances’, et cetera. We are talking about families that have a very frail family member—who themselves may still be a competent person but not living in that property—having to deal with that exemption process. The whole thing is being approached from the wrong direction to begin with. These people should not be caught within this net. They have never been just partly using the house. They have lived in it full time and then, because they are no longer able to live in it, they move on, and now they face a tax. Once again the Treasurer’s word is worthless. It is utterly worthless. No commitment that the Treasurer or the Premier makes on tax can be believed. There is just too much form. Whatever they say does not matter. Look at what they do. And what they do is they increase taxes, they create new taxes and they waste money.

On that topic I cannot go without mentioning that in a week when we have new taxes coming in from every side a media release has come out suggesting it was a good use of Victorian taxpayers money to paint a mural on the rooftop of a temporary shed. I am not opposed to public art as a concept, but as to the suggestion that a 90-metre long mural over the rooftop of the acoustic shed, which is a temporary shed, was a good use of Victorian taxpayers money—tell that to the frail, elderly people who are now going to be paying 1 per cent CIV on their homes because they are funding a 90-metre mural on a building that is only going to be there for a couple of years. This is what waste and extravagance and a Labor government look like. We could not have a better example than this ridiculous project spending. There are serious things that are not being spent on and there are taxes out of control, and yet we have that. On that basis we will oppose this bill.

Mr DIMOPOULOS (Oakleigh) (12:08): It gives me pleasure to speak on this important bill and to put to bed at least a couple of the furphies perpetuated by the previous speaker, the member for Ripon. I might start with those furphies. The member for Ripon, to give her a little bit of credit, sort of answered her own question but it was almost a case of, ‘Let us not let the facts get in the way of a good story’. She answered her own question in relation to the hypothetical person living in a hypothetical dilapidated house worth a hypothetical $2 million by saying at the end of it, ‘They could be potentially eligible for exemptions’. Frankly, we have seen that scaremongering from the opposition on a whole range of policy areas. We have seen it with crime, we have seen it with taxi deregulation and a whole range of other areas, and we are now seeing it with elderly, frail people living in their principal place of residence, and that is a key issue.

The member for Ripon clearly does not understand the current law. The current law provides that if the place that you are living in is your principal place of residence, you are more than likely entitled to an exemption from the vacant residential land tax, so it is not a problem. In fact usually what happens is if the person is unable to continue to live in their own home because of the circumstances where they cannot live independently, which is the circumstance that the member for Ripon outlined in her hypothetical example, the principal place of residence exemption continues on normally and in the normal course of events can continue on while they are in aged-care accommodation or somewhere else and can also continue on after they are deceased, until the estate is dealt with and property ownership is transferred to somebody else.

Alarming elderly, frail people and their families around this issue is absolutely atrocious. It is atrocious for two reasons: number one, the member for Ripon is bringing a whole range of people into that net, metaphorically speaking, who do not belong or warrant being brought into this debate and being alarmed in that way; and number two, she and her party are ignoring the primary purpose of this, which is to free up homes for Victorians to actually increase housing supply. That is not all we are doing to free up housing supply, but this is one of the tools in our toolkit. So fundamentally for the lead speaker for the opposition to be attacking this is effectively an admission that the opposition does not support housing supply and government intervention in the housing market in a whole range of ways. It is a complete and utter furphy, the member for Ripon’s alarmist rhetoric on extending the vacant property tax, which is for a legitimate purpose. There was an entire class of homes—dilapidated residences for whatever reasons, for land banking and for a whole range of other reasons—that were not part of this net, and we seek to put them, appropriately, in the net of the vacant residential land tax.

That dispensed with, I might continue with the rest of the bill. As the Treasurer said in his second-reading speech, this is a bill which effectively tidies up a range of provisions in the state taxation legislation. It also seeks to address anomalies in a way that aligns those provisions with the policy intent and the effectiveness of what we intend to achieve with those provisions to try and ensure that we do achieve those objectives. In that regard the whole range of matters that have been traversed in the bill and the second-reading speech by the Treasurer are material to that aspiration of making the policy intent clear.

What I do want to focus on a little bit—I do not expect the opposition to focus on this because they do not like a good story when it is on our side of politics—is that this government has delivered more tax relief than their government did, by a country mile. Can I just tell you briefly about the payroll tax threshold? We increased it from $550 000 to $650 000, supporting 40 000 businesses in doing so. We have also got two more step-ups, at $25 000 increments, to get the payroll tax exemption to $700 000 by 1 July 2021. Regional payroll tax—

Ms Staley: On a point of order, Acting Speaker, the member for Oakleigh is not even halfway into his allotted time and he has clearly run out of things to say about the bill. Payroll tax is not included in this bill in any way, shape or form.

The ACTING SPEAKER (Ms Spence): I do not uphold the point of order because the member for Oakleigh was speaking to the bill, albeit broadly. I ask him to stick to the bill.

Mr DIMOPOULOS: Thank you, Acting Speaker. That is really a new threshold, and I will keep that in mind on the numerous occasions that the member for Ripon talks about something that is approximate or related—and in my case heavily related—to the bill. It is actually a state taxation bill, and I would have thought the payroll tax was one of the iconic state taxation arrangements.

But nonetheless, my point is you have a state taxation bill because rightly, as both the previous member and the Treasurer have pointed out, the state needs revenue to run a whole range of services. My point, however, is that it is how you conduct yourself in terms of how you evenly and appropriately distribute that tax burden among a range of Victorians, whether it be businesses or individuals or those in regional Victoria or metro Melbourne. That is material. You cannot look at one bill and one levying of taxation in one area of Victoria and not look at the entire matrix.

The payroll tax exemptions—we are really proud of this. We will end up with 25 per cent of the metropolitan rate for regional Victoria by 1 July next year. That is an extraordinary outcome. It gives an extraordinary signal to the market in terms of business investment in regional Victoria. There is probably quite a connection between that and the historically low unemployment rates and high employment rates in regional Victoria.

Further to that, I remember heading to Bendigo, to the great electorate of the Deputy Speaker in fact, and announcing a provision we made earlier this year in relation to payroll tax, and that is that an employer will have to account for the wages or salary of a male taking parental leave. There was a historical anomaly that that would be part of the consideration of payroll tax levied on the entire wages bill, including on the person who was taking leave, but that was not the case for women. So women could take parental leave and the employer would not have to count their salaries for the purposes of payroll tax. That is obviously a good thing. We all agree that is a good thing, but it was not extended to men. It was my pleasure, on behalf of the government and the Treasurer, to go to Bendigo and make the announcement that we are going to equalise that now. For both men and women taking parental leave it means that their employer will not have to pay payroll tax on that portion of their salary. It acts as a bit of an incentive to employers not to withhold unnecessarily parental leave requests from males. There are a whole range of other areas where we have better apportioned the tax burden. We have provided many more concessions, both in terms of the number of different taxation arrangements but also the quantum of funds, to the Victorian community than the previous Liberal-Nationals government.

I want to finish on a key point. The member for Ripon talked about how we have gone back to the trough of the property industry time and time again. What she fails to recognise is that through the investments we have made—we have done a power of work on infrastructure and social policy—through the whole range of work that we have done, we have increased the value of properties right across Victoria. Because property values are inextricably linked to assets, schools, transport, other infrastructure and good social policy that creates a good, safe environment and a good community. That is what Victoria has become under this government and will continue to become. That is why we are still the world’s most livable city. That is why 133 000 people choose to move here every year. So of course we are embellishing the assets of property holders, and of course they need to pay a commensurate amount in relation to our contribution to their asset as well. I commend the bill to the house, and I commend the Treasurer’s work in relation to it.

Mr ANGUS (Forest Hill) (12:18): I am pleased to rise to make a contribution to the State Taxation Acts Further Amendment Bill 2019. I note at the outset that this bill amends four acts: the Duties Act 2000, the Gambling Regulation Act 2003, the Land Tax Act 2005 and the Valuation of Land Act 1960. I also note at the start that the member for Ripon has tabled a reasoned amendment, which I will read. She moved:

That all the words after ‘That’ be omitted and replaced with the words ‘this bill be withdrawn and redrafted to:

(1) take into account further consultation and modelling about the proposed changes to the Duties Act 2000, the Land Tax Act 2005 and the Valuation of Land Act 1960; and

(2) retain the remaining provisions of the bill.’

So I certainly support that reasoned amendment from the member for Ripon. I think it is very interesting to note even the name of this particular bill: the State Taxation Acts Further Amendment Bill 2019. We have already had the State Taxation Acts Amendment Bill 2019, but because the government cannot get it right, because they just need to keep going back to the well to tax Victorians more and more, we have this time got to have the further amendment bill—the State Taxation Acts Further Amendment Bill 2019. They just cannot get enough of Victorians’ hard-earned money into their pockets.

We can see and we all know the way this government is spending money and wasting money. We do not have to look very far to see where that is going. I think one of the interesting things that we can see in the PAEC report that was tabled in this place yesterday is just some of the observations of the Public Accounts and Estimates Committee in relation to the budget. Just looking at page xxi I see that it talks about some substantial write-downs in revenue and increases in expenses compared to previous budgets. We know that because we have certainly got the highest taxing, highest spending budget and government in Victoria’s history. It goes on in that paragraph and looks at the resulting $2.8 billion downgrade in revenue from land transfer duty. That was off the back of the reduction in property prices here in Victoria. As I have spoken about many times in this place, you did not have to be Einstein to see that coming the way the cycle of property values works. Interestingly enough the report notes that:

The write-down is in part stemmed by six new revenue initiatives and the extraction of $4 billion in ‘amounts equivalent to dividends’ from the Victorian Managed Insurance Authority, Transport Accident Commission and WorkSafe Victoria.

So right there, just in the executive summary of that particular report, we can see that PAEC have identified how the government is trying to fix up its budget, which is in an absolute crisis at the moment.

Mr Pearson: Are you serious?

Mr ANGUS: Yes, an absolute crisis—absolutely. We will see when the numbers come out, member for Essendon. We will see there will be a deficiency here in Victoria. There is no doubt about that, with the way the government is spending and wasting the hard-earned money of Victorians all over the place. We can see it goes on and talks about, if we look at page xxv of the same report, talking about level crossings:

Information about the cost per level crossing removal was sought during the inquiry. The Minister for Transport advised that the total budget of the level crossing program is $13 billion and that there are challenges with releasing information on costs of individual crossing removals as every location is different.

That is an interesting way of saying that the government is not prepared or cannot or has not got the figures to hand to identify specific level crossing removals. We know from the work that the Victorian Auditor-General has done and the report that he has tabled in relation to the level crossing removal program that even at the time when that report was written, quite some time ago, the crossings that had been removed to that point were already about 32 per cent over budget. It is no wonder the government is running scared from releasing that information and putting that out in the public domain, because they know it is going to be more of a nightmare for Victorian taxpayers to see the way that the government has done a lot of the easy level crossing removals while the ones with very complex engineering works in many cases are not yet done and yet the budget has already blown out by that massive amount. It augurs very, very badly for us as Victorian taxpayers in relation to that.

That report goes on, on page xxvi, to say when talking about the Department of Justice and Community Safety:

The centralised portal where Victorians can review and pay their fines that was procured to support legislative changes introduced through the Fines Reform Act 2014 (Vic) has not met the State’s expectations. The Government is currently working to address this issue.

I think that is one of the greatest understatements of all time, Acting Speaker, and I am sure you would agree with me. To say that the system that has completely collapsed within the last few days—it has come to light just how disastrous that is, and we are finally getting some concessions from the relevant minister and other members of the government in relation to the shambolic situation that is Fines Victoria—‘has not met the state’s expectations’ is a massive understatement, and it just reflects the mismanagement and the incompetence of the current government. It goes on, on the same page, to say, and let me quote again:

Six new alcohol and drug buses that were scheduled to be ready by March 2019 are currently off road and not operational. The cost of repairing these buses was not known at the time of the estimates hearings.

What we can see there is the fact that, again, we have got a shambolic situation. In terms of road safety, we have got a tragically record-level road toll here in Victoria at the moment with sadly still a couple of months to go for the year. We have got a situation like this where we have got alcohol and drug buses that were ordered and paid for some time ago that are not fit for purpose and are not out on the road doing what they need to be doing. We have got the government absolutely gutting the Transport Accident Commission by taking out billions and billions of dollars over the forward estimates and therefore not enabling the TAC to have those funds to do the necessary work in terms of road safety, in terms of police—particularly highway patrol police overtime and other police overtime—other blitzes and so on. It is just extraordinary the way the government has mismanaged things so badly that we have ended up with all of the consequences, and the tragic consequences in many cases, in relation to those mismanaged decisions and the adverse outcomes from that. We can see that over the next page as well, page xxvii, and I quote:

The 2019–20 target for the number of alcohol screening tests conducted by Victoria Police has been reduced by 500 000 in the 2019–20 Budget …

That is a further extension of that in as much as that for a range of reasons—numbers of them would be financial reasons—the level of roadside breath testing has been reduced by 500 000, so it is no wonder the road toll is at record levels here in Victoria in recent years. This economic and financial mismanagement and related decisions have real-life consequences for the rest of the community and the taxpayers and the people that live here in Victoria. I think it is just a shambolic consequence of the record levels of spending and record levels of taxation by this government.

If we turn over to page 4 of that report—again talking about the level crossing removal program—it refers back to the committee’s own report in relation to a previous recommendation that had been made regarding the transparency of the level crossing removal program, and it says that it should be enhanced and there should be data on risks by individual level crossing. It notes that the government supported that recommendation, but then it goes on and says that that information is not available at all. So here we have got a situation where we are trying to bring some financial transparency to that very important expenditure area, and indeed the government’s effectively signature policy with the level crossing removals, but no-one can quite find out how much the blowouts are on an individual basis, how much they are costing and what is actually going on from a financial perspective. It is all very well and good for the government to keep saying that, but at what cost, and the Victorian taxpayers get caught up having to fund that. It is initiatives such as these ones in the State Taxation Acts Further Amendment Bill 2019 that are impacting upon all Victorians that are paying tax here.

That particular document, the PAEC report, goes on in chapter 2 to talk about a whole range of other financial aspects.

I suppose, in conclusion, what we can see here is financial mismanagement on a gross scale. Because why else would you need to bring in a state taxation acts further amendment bill? We have already had the budget, we have had the amendment bill, and here is a further one.

Mr PEARSON (Essendon) (12:29): I am delighted to join the debate on the State Taxation Acts Further Amendment Bill 2019. This is a very important piece of legislation before the house because it is about tidying up various statutes to make sure that we have got an efficient taxation system. I listened to the contribution made by the member for Forest Hill. Describing the state budget as a ‘shambles’, I think, was his key contention. It is interesting that he would choose those words, and I think it is important to recognise that the state of the budget is in a very good position.

We have got significant gross state product growth. We grew at 3.5 per cent in the last financial year, and that compares to 1.7 per cent in the last full financial year that the Leader of the Opposition was Treasurer of this great state. I think it is also worth acknowledging that in terms of the debt levels that we currently have, we have authorised and approved an increase in those debt levels in the general government sector, but those debt levels are modest. They are modest in the sense that we are looking at trending up over 10 per cent to I think 12 per cent of gross state product. So it is important that you do not look at the nominal figures but at the percentage of the total size of the economy.

This is relevant when that 12 per cent of gross state product is compared and contrasted with the long-term average of the debt levels in the general government sector which existed under the Hamer and Cain governments, which were around about 18 per cent. That was a long-term average throughout the 1970s and the 1980s. It was about 18 per cent of gross state product as a level of debt being held in the general government sector. These are very modest levels of debt, and indeed we need to take on these levels of debt in order to ensure that we have got the capacity to sustain the rapid population growth we are currently experiencing.

The member for Forest Hill talked about the level crossing removal program and the increase in the cost of that program. What the member fails to appreciate when you remove a level crossing is that there is the ability to do additional work while you are there. It is a bit like saying, ‘We’re going to renovate the house. While we’ve got the builders on site we may as well look at making additional improvements to our property while they’re there’, as opposed to saying, ‘That’s purely the scope, and we’re not going to change it’.

What is also relevant—and my dear friend the member for Oakleigh is no longer here in the chamber—is to think back to some of the abuse that the member sustained over the course of that last term. That member worked diligently on behalf of his community to try to address some of the issues that the community raised. When you set out a scope to do a major piece of engineering, you are not always going to have everything right and squared off with the community. Indeed people’s lived experience is different, and people who live in these communities on a regular basis will have their own observations. They will say, ‘Look, you’re my elected representative. I appreciate you are doing this level crossing removal project, but I think it is important that you should do X’. X might be, for example, ‘Purchase my property so I can leave this area’ or it might be, ‘Can we have some bike paths; can we have some green space activation?’. These things cost money.

If you follow the logic of the member for Forest Hill, what he is actually saying is that as a state government you should not listen to your community, you should not entertain their thoughts or ideas, you should not engage and seek any further improvements; you should just stick to the scope of the project and not deviate from that. I think that is a flawed approach. I do not believe that is the way in which you should conduct yourself.

I note that the member for Ripon is still in the chamber. Maybe she feels comfortable in her position and she is confident that her position is not going to be challenged—that she will still be the Shadow Treasurer come 5 o’clock Friday—or maybe she is hoping that by staying here that will be the case.

Ms Staley: Maybe she is on chamber duty.

Mr PEARSON: Well, maybe you are just seeking comfort. Maybe you are seeking asylum. Maybe the member for Ripon is seeking asylum at the table while all these thunderous clouds swirl amongst the Liberal Party room. She would not fess up to whether she was one of the 11 or not in the course of the committee debate.

Ms Staley interjected.

Mr PEARSON: I think she protests too much.

Anyhow, the member raised some issues around insurance duty changes and indicated that she felt that these were retrospective changes. There is no retrospective effect where these are concerned because the duty has already been paid. What the bill is seeking to do is tidy up those insurers who are overseas. Most people or most companies or organisations that would procure their insurance policies offshore would be larger companies, larger organisations. So I think there is a very real risk that what the member is alluding to is the fact that this could provide a windfall gain for some of these larger companies and professional service firms for a duty in which the member in her speech has already indicated should be paid. So there are some concerns about the way in which the member is arguing this particular case.

I think it is also relevant to point out that again we are seeing another reasoned amendment from those opposite. It is another example where what those opposite are trying to do is say, ‘We’re not going to come out and oppose the bill. We’re not going to vote it down. We’re not going to vote for it. We’re going to ask that you go back to the drawing board and start all over again’. This is a consistent pattern of behaviour from those opposite, who are not prepared to really identify one way or the other where they feel on these sorts of matters. It is just a case of ‘in principle, yes’. We saw that yesterday with the member for Mornington—‘In principle, yes, we agree with what you’re doing, but actually we don’t want you to do it, so you should just go back and do nothing’. That is the way I would characterise the actions and activities of those opposite when they occupied the Treasury bench in the 57th Parliament. I think that is very regrettable, because when you are sent here to be a legislator, you should be here and be very clear about what you are seeking to do and be very honest and upfront with your community and your constituencies. The notion that members would just simply say, ‘No, we’re not going to pass a bill; no, just go back and do further work; we’ll do nothing’, I do not think is fair or reasonable. We need to make sure that we have got a strong taxation base, and we need to make sure that we have got the capacity and the ability for the state to respond to the challenges that are emerging. Fiscal policy is a really important tool in the arsenal of any government.

At a state level I note the member for Ripon raised some concerns about land tax and changes to land tax. I would hazard a guess that one of the reasons the state budget is in such a strong position is partly because of the land tax arrangements that are in place, which were built off the fact that we have got very strong population growth. We do not have the capacity to levy the GST or to seek an increase in the GST. Those matters are federal. In terms of digital taxes, a lot of those would fall under the Telecommunications Act 1997. Again, that would be the responsibility of the federal government. There are some limitations to what we have got from a taxation perspective and our ability to raise taxes, so we need to have a very strong and robust taxation system to ensure we have got a very strong balance sheet and very strong reserves to be able to respond to the issues that confront us.

The immediate concerns we have are in relation to trying to accommodate the rapid population growth we are currently seeing. That takes some time. To be able to do that requires resources. What those opposite really want us to do is to not increase the taxation base, to not expand the taxation base, to not have a strong and robust set of accounts so that they can—like the member for Forest Hill said in his contribution—come in here and say that we cannot manage the economy, which is patently false. I am really pleased to say that we have presided over multiple years of budget surpluses throughout the Bracks and Brumby years despite the global financial crisis, and we continue to do so. When you have got a public sector that is prepared to go in and back itself and invest heavily in major projects, then the private sector responds. That is why you see very strong gross state product growth, because you have got that pile-on effect where you have got a pipeline of activity so that people have got the confidence to turn around and invest in property, plant and equipment, and to take on more staff and to grow the economy.

I think the Treasurer has said in his contributions in this place that one in seven jobs did not exist five years ago. That is a significant increase in terms of the employment profile of the state, and it is because you have got a government that is making these sorts of investments. It is a very strong bill, and I commend it to the house.

Mr WALSH (Murray Plains) (12:39): I rise to make a contribution on the State Taxation Acts Further Amendment Bill 2019. I seem to have the pleasure of following the member for Essendon quite often when I speak, and I must admit he gives me a lot of material to talk about. I am intrigued by his fixation with the numbers and the positions of people on the opposition benches, this from someone that obviously cannot do his own numbers because he could not actually get into cabinet. He effectively put the big sign up saying, ‘I am a perfect candidate to be a cabinet minister’, but for some reason he could not do his numbers and could not get a spot in cabinet. Then as a consolation prize there was a special position made available to him as Parliamentary Secretary to the Premier, with a huge pay increase as this sort of consolation prize. And we know what happened to that—it did not actually come through the first time and he had to wait until there were changes to the salaries for everyone.

The member for Essendon also talked about the issue of how this house functions and the fact that the opposition should put forward textual amendments. I suppose we would be thrilled to put forward textual amendments if the Leader of the House would actually agree to go into consideration in detail on bills. One of the big differences between this house and those that sit on the other side of Queen’s Hall is that over there they actually get the opportunity to go into committee and go into bills in detail. If the member for Essendon wants to talk to the Leader of the House and suggest that we actually do go into consideration in detail and we actually function as a house should function and we actually debate and investigate these bills in detail, we will do the work with parliamentary counsel to have textual amendments drafted. But given the fact that the Leader of the House will not go into consideration in detail, there is no opportunity for these bills to be examined in detail and there is no opportunity to vote on those textual amendments. The only way the opposition can actually get a vote on anything is through a reasoned amendment, because the reasoned amendment is put before the vote on the bill itself. So if the member for Essendon actually wants a job and wants to do something useful for the people of Victoria, he might talk to the Leader of the House about how this house functions and the need to function as a house should and actually go and examine bills in detail. That would be a very useful exercise for the member for Essendon.

The member for Essendon also gave us a lecture about debt and how good debt is, I suppose. I suppose one of the things that has shocked many people in Victoria as they started to realise what the Treasurer announced three days before the last election was that the government was actually going to double state debt. There has always been advice whenever I have been part of government that states should stick to around 6 per cent of gross state product as a debt ceiling for running a responsible government. The Treasurer has decided in his wisdom, and the government has decided in their wisdom, to double state debt. Yes, money is cheap at the moment, but money is not always cheap, and it will change over time. I can remember early in my business career when the interest rates were at 18 and 20 per cent, and when interest rates get up high, the government has to pay interest on their debt. That takes away from the money they actually have to deliver services to the community, and debt does have to be paid back at some time in the future.

I think what concerns a lot of the people that I talk to about the state debt at the moment and about the infrastructure projects is that they do not believe that Victoria is actually getting good value for the infrastructure projects that are being delivered in this state. We hear constantly in ministers statements about the level crossings that are being removed in Melbourne. The project, as I understand it, is somewhere between—pick a number, basically—$2 billion or $3 billion and maybe north of $3 billion over cost from the original estimations of what that project was going to cost. What people raise with me, particularly from a country point of view, is, ‘Is that good management of projects? Is that good management of our finances when you have a project that is something like $3 billion over budget?’. And they say, ‘No, it’s not’. In their businesses they do not let expenses blow out by that magnitude of percentage.

What it also means is that there is not the money to invest in projects in regional Victoria, and question time today was a classic example. We had the Minister for Transport Infrastructure ducking and weaving around what she has said previously both in the house and on television about the Murray Basin rail project. It is something that has been botched, part of the project that has been built is not satisfactory—it is not up to specification; the trains cannot run at the weight and the speed that was originally in the specifications of the particular project—and there is a substantial amount of that project that is not being proceeded with at the moment. So if you talk about debt and you talk about the responsible management of our finances in this state, a lot of people that I represent are really questioning whether this government is up to the job.

On the Murray Basin rail project, the federal government is keen to see that project finished but it is constantly asking for information about the project. They want to know what went wrong with the money that has been spent so far that did not deliver a good outcome on the Mildura–Maryborough line and the Maryborough–Ararat line, but more importantly they actually need a business case if they are going to put additional money in. The Minister for Transport Infrastructure just standing up in this house or just making a press conference to say we need more federal money is not how it works. They actually need to submit a business case to the commonwealth so the commonwealth knows what will happen with that money. In my view that business case needs to very clearly set out what the milestones are and what the outcomes are that are going to be achieved so that the commonwealth bureaucracy can hold Victoria to account for all the money that they put into those particular projects.

On some of the changes in this bill, it is a tax grab. We are seeing a number of tax bills come forward because this government needs more money. They need more money because they are not managing the finances of this state well, they are not managing the expenditure of the revenue of this state well and they are constantly going back to the people to take more money off them. I just think that is obscene. The government need to spend what they are getting at the moment better and deliver services better before they actually go back to ask for more money into the future.

One change is around the land tax for those farmers that are in the urban growth boundary. Can I just raise a concern on behalf of those farmers in the urban growth boundary who have raised this with me during various roles I have had in public life, both when I was at the Victorian Farmers Federation and now as a member of Parliament. For those genuine farmers in the urban growth boundary, they face a huge task to actually be viable as a business. Their rates are a lot higher than the general agriculture population of Victoria because of the land values where they are, but that land value does not make them money every year. They need to actually be able to farm, to run livestock and to grow crops to generate revenue to pay their rates. They are paying substantially higher rates than the general farming population of this particular state, and they have a lot more compliance issues pushed on to them.

Because they are in a green wedge there are limitations on what they can actually do as a farm. Because they are on busy roads they have limitations put on them as to how they move livestock and how they move farm machinery around, and they have a general level of frustration trying to not only run their farm but abide by all the rules and regulations that are put on farms in green wedge zones. So in changing those rules to supposedly not impact on genuine farmers anymore I think the government needs to think about the wider impacts that are on those farmers that are in the green wedge who are delivering effectively, in some ways, a community service by making sure there is open space between the various subdivisions that are happening in the urban growth boundary.

As the Shadow Treasurer said in her contribution, the coalition does support the changes to the Gambling Regulation Act 2003 because, as she very clearly articulated in her contribution, this is about putting more revenue back to our veterans. I think that is a very good thing to do.

In conclusion, I would like to support the reasoned amendment put forward by the Shadow Treasurer, the member for Ripon, and urge those on the other side of the house to support our reasoned amendment, because it is the only way, given the way the Leader of the House runs this chamber, that we can actually have some serious debate about these particular issues. So short of being able to go into consideration in detail and examine the bill in detail we believe a reasoned amendment is the way to put forward our argument that the government needs to go back and have a hard look at some of the things they have done. Most clearly in clauses 7 and 8, which the member for Essendon talked about, I do not believe we should do things retrospectively in this state. I actually believe the member for Essendon was wrong in his articulation of that particular argument. As I read it, clause 8 effectively means that the changes made in clause 7 makes them retrospective, and I do not believe we should do retrospective legislation.

Mr CHEESEMAN (South Barwon) (12:49): It is with some pleasure that I rise this afternoon to speak on the State Taxation Acts Further Amendment Bill 2019. I think it is worth putting this particular bill in the context of where the state of Victoria is at the moment. As most members and those listening to this debate would be aware, Victoria is experiencing record growth. We have got massive population growth happening in this state, and that is creating huge opportunities for the state of Victoria. From a government perspective that is presenting a significant number of challenges that for the last four years the Andrews government has responded to.

When you have record population growth that inevitably puts substantial pressure on the infrastructure that the state provides. I think it is worth noting that that pressure often can be a productivity drag on the economy. If we look at level crossings as an example, a level crossing may have been in existence on any one particular road for 60, 70, 80, 90 or 100 years, and as population grows in that corridor, as more trains use that corridor, it means those that are driving over that level crossing often end up experiencing more and more time when they are sitting idle, waiting to be able to safely cross that particular crossing. That of course is a productivity drag on the economy.

Over the last four years the Treasurer has been very focused on investing in the infrastructure that this state needs and that will grow our productivity, that will make our state more efficient, that will make it easier for people to get to and from work and that will grow the productive nature of the economy. That has been a focus of the Andrews government over the last three or four years.

A second element to the budget settings that we have sought to do is to prioritise investment in education, whether that be three-year-old kinder, which ultimately will be very productivity enabling for future generations, or indeed in our TAFE sector, in providing young Victorians—mainly—the opportunity to gain the skills they need for the jobs that are available in our economy. That has been the focus of the Andrews government, and it has been the focus of the Treasurer over the last three or four years to make those strategic investments that open up our economy, that invest in the future productivity of this state and that support that record population growth that our state has gone through. Now, when I contrast the effort of the Andrews government with that of the commonwealth, I think it is worth noting that the Victorian economy has been growing at about 3.5 per cent per annum versus the rest of the nation, which has been growing, I think, at about 2.3 per cent. So Victoria is very much the engine room of our nation and in fact has been so since the election of the Andrews government and as a result of the hard work of the Premier, of the cabinet and of course of the Treasurer.

To fund the infrastructure that this state needs and to fund the education requirements of this state to ensure that every Victorian has that opportunity to participate in a meaningful way in our economy has required budget discipline. Of course a key component of that is making the necessary changes to our taxation provisions to ensure that we have an effective and efficient taxation system, and again that has been very much the focus of the Treasurer—to make sure that our taxation arrangements are fair, that they are efficient and that they are effective. Over the last 50 years a large amount of the taxing ability of the nation has very much moved to the commonwealth, and that has been increasingly the case effectively since the Second World War. So the Victorian government has not as many levers that were historically available to raise taxation to make those important investments, and certainly the taxation ability of Victoria is very different today to when this Parliament was built in the 1860s.

So these particular provisions within this bill I think are relatively modest changes to our taxation arrangements. I think they very much will go to addressing fairness and closing unnecessary loopholes within our tax arrangements. I am particularly pleased that one of these provisions will very much go to the question of housing affordability. One of the great challenges when you have a city like Melbourne and our strong regional centres growing to the extent that they have been is that housing affordability can become a challenge. Of course we have very generous arrangements in place to assist particularly first home buyers around buying property, but we need to make sure that wherever possible there are very substantial financial levers in place to ensure that when vacant property is sitting unutilised we can encourage those properties to be made available to the housing market, whether it be to new buyers or whether of course it be to renters. That is the particular provision I wanted to address today in this contribution.

The ACTING SPEAKER (Ms Ward): The member for Gippsland East, and you have got 40 seconds.

Mr T BULL (Gippsland East) (12:59): Thank you, Acting Speaker, I appreciate that. It is going to take me a bit longer than 30 seconds, so I think I will probably have to come back, but in the short amount of time that I have, I want to support the reasoned amendment that has been proposed by the Shadow Treasurer. We have had a pattern of omnibus bills coming into the chamber, particularly this year, that have a combination of a good element of legislation and a very, very poor one, where these elements should clearly be separated. So when we return after the luncheon break, I am happy to elaborate on that.

Sitting suspended 1.00 pm until 2.01 pm.

Business interrupted under sessional orders.