Wednesday, 30 October 2019
Bills
State Taxation Acts Further Amendment Bill 2019
Bills
State Taxation Acts Further Amendment Bill 2019
Second reading
Debate resumed.
Mr T BULL (Gippsland East) (16:02): I resume my discussion that I started very, very briefly before the luncheon break. As I said, this is an omnibus bill to which we have proposed a reasoned amendment. I certainly support the Shadow Treasurer’s reasoned amendment because this bill does contain some parts that are very palatable to us and other parts that quite simply are not. I will start on the former first. As the Shadow Minister for Racing and Shadow Minister for Veterans Affairs, I have no opposition whatsoever to the proposed changes relating to the impact on those portfolios—that is, that this bill amends the Gambling Regulation Act 2003 to provide for an annual payment to the Anzac Day Proceeds Fund out of revenue raised by the point-of-consumption wagering and betting tax. As we know, that commenced on 1 January 2019 but will soon be reviewed.
While I note that the point-of-consumption tax is up for review and negotiations will start soon, I make the assumption that this payment will remain in perpetuity in relation to the Anzac Day Proceeds Fund. With any changes that are made to the point-of-consumption tax in this review, that certainly needs to be preserved as part of that. The Anzac Day Proceeds Fund provides money for a range of welfare activities that support our veteran community right across the length and breadth of Victoria. It has been a longstanding tradition, if you like. The main source of support for the fund is an annual donation of tax revenue raised from the totalisator betting on Anzac Day each year. That is part of the deal. The new point-of-consumption tax changes that framework, so this amendment to the legislation will make sure that that is preserved and that that payment will not only be maintained, but as I am led to believe by the second reading, will actually be increased. As was pointed out by the Treasurer in his second-reading speech:
The information collected by the State Revenue Office to administer the point of consumption tax does not break down wagering and betting on a daily basis.
To replace the previous arrangement, this amendment provides for:
… an annual payment to the Fund of one-thirtieth of all wagering and betting tax revenue paid or payable for the month of April.
This should provide certainty and support to the Anzac Day fund—absolutely it should—and it should result in a higher level of payment to the Anzac Day fund, which will be very well received.
Before I move on, just whilst we are talking about the racing industry, as the shadow minister for that portfolio it would be remiss of me not to mention the funding announcement that was made by Racing Victoria (RV) earlier this week of $25 million dedicated to the welfare of Victorian thoroughbreds, with an immediate focus on their post-racing wellbeing. As we know, there has been a lot of media around of relatively recent times that has highlighted some concerns in that area. This new fund will deliver a statewide rehoming program, which has already been very, very well received. It will expand the Off the Track program in relation to post-racing career options for thoroughbred horses. It will oversee a statewide foster program. I am led to believe from some preliminary discussions with the CEO of RV that it will include a much better database, if you like, of people who are happy to accept and rehome thoroughbreds. A much better, advanced tracking system will follow horses past their first transfer off the track into ownership. An equine welfare task force will travel the length and breadth of the state to make sure that thoroughbreds are being looked after by those owners who take them on. There will be a humane euthanasia program for on-farm euthanasia when the time comes that a thoroughbred has to be put down to make sure that that is done respectfully and ethically. There will also be a responsible breeding program to make sure that we are not overbreeding thoroughbreds and that numbers are kept in line with the industry requirements but are not over the top.
This new fund was also supported this week by the Victoria Racing Club (VRC), which committed $1 million to it. The chairman, Amanda Elliott, made that announcement on Monday morning as well. It was very timely in the week leading up to our Spring Racing and Melbourne Cup carnivals at Flemington. The VRC also confirmed that 10 per cent of all their public ticket sales for this year’s cup carnival and 5 per cent of Victoria Racing Club annual memberships will go towards the equine wellbeing fund for the care of racehorses. Again, that has been very, very well received by the general racing industry and racing fraternity.
An area of concern with this bill and the reason we believe this bill should be split and not combined—and this was eloquently pointed out by our Shadow Treasurer in her contribution to the chamber—is the vacant residential land tax to be levied on properties that remain uninhabited for two years. That raises a number of concerns. I will paint a hypothetical here. While I talk about it being a hypothetical, it will be a reality. We might have an aged person who is living in a residential home. They are happy with the condition of the home but the condition of the home does not meet the standards needed for it to be rented out. That person may then go into some form of aged-care facility and not have the financial backing or resources to be able to renovate that home, which could run into many tens of thousands or even hundreds of thousands of dollars, so that it meets the standard of the rental market.
Put yourself in that situation. You have been put into aged care, all of your financial resources are going into your aged care, you cannot do up that home and you are faced with either having to sell it, which you do not want to do for family reasons, or spending a lot of money that you do not have; otherwise you are going to be taxed by this government. I do not think it is fair to put those people in that very, very difficult and awkward position.
The reality of it is that a person can be happy living in their own home in conditions that may be considered uninhabitable for the rental market, but all that will change when that person’s personal circumstances change; and rather than being taxed, they should be allowed to leave it sit vacant if the financial demands on them are beyond their capacity. We may hear back from the other side, ‘Well, they’ve got two years to do something about it’. The situation may not change in five years, let alone two years, so that certainly needs to be taken into consideration.
The changes to duty on insurance are also of concern. This bill retrospectively applies duty on assessments over the past five years. I cannot say too much more about it than what the Shadow Treasurer pointed out, but the explanatory memorandum to the bill clearly states:
The retrospective operation of the amendments will also avoid any potential risk of costly litigation for the State and taxpayers.
What we are doing here is creating policy that pre-empts possible future litigation—quite bizarre—on actions taken by taxpayers in good faith on what was the wording of the law at the current time. That is just unbelievable.
This bill should be split. There are elements of this bill that we support and there are elements of it that we vehemently oppose, and for that reason this legislation should have been presented to the Parliament as two bills. It should have been split to allow us to support the straightforward elements of the bill that relate to veterans and the racing tax and allow us to oppose or amend the other elements of the legislation.
Mr McGHIE (Melton) (16:11): I rise today to speak on the State Taxation Acts Further Amendment Bill 2019. This amendment bill is continuing what progressive Labor governments like the Andrews Labor government do—that is, ensuring our tax system keeps delivering for all Victorians. Our taxation system must be a system that is fair and delivers for all Victorians. That ideal is something that this government is committed to. As we know, whenever there is a system to ensure fair and equitable taxes, there are individuals and companies that will seek to find loopholes to avoid their financial responsibilities to their fellow citizens. This bill seeks to close some of those loopholes to ensure the Victorian taxation system is not only sustainable but fit for purpose whilst maintaining its integrity.
This amendment will also see more support for our veteran community. This bill amends the Gambling Regulation Act 2003 to provide for an annual payment to the Anzac Day Proceeds Fund out of the revenue from the wagering and betting tax, which began on 1 January 2019. The Anzac Day fund provides money for a range of welfare activities that support the veteran community. The fund provides support for much-needed services such as welfare programs and assistance for veterans, health and wellbeing programs, and education and school expenses for the dependants of veterans. Supporting our veterans is something that is important. As a society it is vital that we do not take for granted the sacrifice that veterans, their partners and their families make. We often do not realise the emotional toll that their service has on them and their families when they serve and even later if they return—a cost that as a society we are often blissfully unaware of.
This is something that is important for my electorate in Melton, where I have met with many of my constituents who are veterans or the loved ones of veterans. One group in particular, the Melton and District Vietnam Veterans, have inspired me when I have had many conversations with them, including at their weekly catch-ups. Their sense of service is still strong among them; they are still giving back to their community—for example, through their scholarships for two Melton students transitioning into high school, a bursary for a young man from Melton who went to Gallipoli, donations to autism groups and in the past also donations for fruit to be available in classrooms across Melton.
Melton is also home to the Victorian bunker of Young Diggers, which provides a variety of support services and programs to help serving and ex-serving personnel of the Australian Defence Force, their dependants and direct family members. They also do an amazing job of training PTSD assistance dogs, promoted by the wonderful Carole Doyle, to assist those service personnel and first responders who struggle with PTSD resulting from their service to the community.
I have had many discussions with the veterans at the Bacchus Marsh RSL about some of the supports they require. I look forward to discussing with the Minister for Veterans how this bill delivers an annual payment and more funding for the Anzac Day fund, which can help the inspirational groups and individuals in my electorate.
Another issue that my electorate of Melton encounters on a daily basis is the pressure from housing affordability and homelessness. That is why I am delighted that this amendment bill seeks to address this in some way by creating a more effective and sustainable tax system by removing loopholes for property investors with vacant properties so that everyone pays their fair share. The vacant residential property tax will be levied on dwellings left vacant for more than six months. An uninhabitable home in the context of this legislation would include, for example, a home with significant water leaks, missing walls or a roof that exposes the living space to the elements, electrical hazards or other such conditions. Aesthetic issues such as unfinished painting or worn carpet would not render a property uninhabitable because living in the home or premises would still be possible.
This will have the effect of reducing the number of houses and apartments being left vacant in the inner and middle ring of Melbourne, boosting supply and making housing and renting more affordable. Although targeted to the 16 inner-Melbourne councils, this will help relieve pressure across all of Melbourne. Closing the loophole where a residence is left uninhabited or uninhabitable will encourage landowners to renovate and will lead to more rental housing stock or housing availability.
There are a couple of points that I want to address that were made by the lead speaker from the opposition, the member for Ripon, who raised concerns about the insurance duty changes. The reality is that taxpayers have already been paying this duty. We are simply providing the certainty that those opposite failed to do when they bungled legislative changes in 2014. The member for Ripon also raised issues about the changes being hidden away in this omnibus bill. Who would have thought that tax changes would have been in a tax bill. The changes are so hidden that they are clearly written in the bill and referred to in the Treasurer’s second-reading speech.
A member interjected.
Mr McGHIE: You have just got to read it, yes. Not only is the member for Ripon wrong, she is being hypocritical. No-one will be surprised to hear that despite the member for Ripon’s crocodile tears, those opposite did exactly the same thing when they were last in government—several times. As an example of that, in 2014 an omnibus tax bill included changes to the Land Tax Act with effect back to 2007. The circumstances were very similar to the current changes, confirming Parliament’s clear policy intent and longstanding existing practice.
This amendment bill also seeks to make stricter requirements for land in an urban zone in greater Melbourne. This change will help prevent developers who are land banking from accessing a land tax exemption. The strict conditions this imposes effectively limit the land tax exemption to genuine farmers conducting a business on their land which meets strict requirements for this land type. This has been a key issue in my electorate as genuine farmers are put under significant pressure from land developers and the large amount of land banking that occurs.
This amendment bill confirms also the legislative basis for charging duty on an insured person who obtains insurance from an overseas provider. It does this by changing the definition of insurer to ensure duty applies whether the insurer is based in Australia or not. If this amendment is not passed, it will also put Australian insurers at a competitive disadvantage to overseas insurers. This change ensures equity for local businesses.
Equity and fairness is something that this Andrews Labor government does not just spruik; we deliver. We have a strong record on delivering tax relief for Victorians because we know that a strong economy and helping Victorians achieve a better quality of life have benefits for the entire economy. Growing businesses leads to more employment. This Labor government delivered tax cuts to almost 40 000 businesses in its first term by increasing the payroll tax threshold from $550 000 to $650 000. This year’s budget increases the threshold again to $700 000, because when we support small businesses we are supporting communities. Small business owners are linked to their community: their children attend schools; they are involved in sporting clubs and community organisations; they create employment, bring in jobs and bring change to the communities they do business in; and they support other business in the areas they live in.
My electorate of Melton on Melbourne’s outskirts is a varied electorate. Parts of Melton are clearly urban and within the metropolitan limits, but my electorate leaves the metropolitan limits as you head towards Bacchus Marsh, and very quickly you discover regional Victoria. Both the metropolitan and regional areas of my electorate contain primary producers. The changes in this amendment bill help to ensure this government’s commitment to young farmers is continued through duty concessions and exemptions. It is essential that we support this new generation of primary producers. This continues on from the Andrews Labor government’s commitment to regional Victoria. Payroll tax, which we cut for regional Victoria in our first term, was cut even further in this year’s budget.
In the Moorabool shire, which is in my electorate, businesses are growing. I hear it at the BizConnect Moorabool meetings that I attend; in fact I am presenting at the November BizConnect meeting. In regional areas like the Grampians, where part of the Moorabool shire sits, payroll tax has been cut even further for about 3500 businesses. This supports companies in regional Victoria to grow, encourages job creation and ensures every region shares in the benefits of the state’s economic growth. This growth in the area leads to new families moving into the area.
Tax relief and support help here too. Melton, Bacchus Marsh, Eynesbury, Brookfield, Kurunjang and Melton West—all these areas have seen a significant number of first home buyers supported by the Andrews Labor government’s Homes for Victorians package. I have mentioned here many times that Melton is the fastest growing area not just in the state but in Australia. Many Victorians who have the dream of owning their first home choose to make that a reality in Melton. That growth will only continue.
It is also important that those in regional Victoria are supported to stay or move into their community. The Andrews Labor government has once again shown its commitment to the regions by doubling the first home owner grant for those building in regional Victoria. Those people entering the housing market for the first time are supported by this government and its tax relief. That is why it is so important that the Victorian economy and tax system remain sustainable and fair to continue delivering for all Victorians. I will support this legislation, and I commend the bill to the house.
Mr RICHARDSON (Mordialloc) (16:21): It is a pleasure to rise and speak on the State Taxation Acts Further Amendment Bill 2019. It is a really important bill in a number of regards, and I think it was well covered off by the member for Melton. In terms of supporting people to enter the housing market he talked about fairness in reducing tax obligations and getting more first home buyers in, and I will touch a little bit on that as well.
During the matter of public importance I had occasion to listen to the member for Bentleigh speak on a provision in this bill. He talked about the impact on the mental health and wellbeing, through previous conflicts, of our Anzacs and our serving men and women. One thing that I am really passionate about in this bill is that the proceeds that come from the amendment of the Gambling Regulation Act 2003 will provide for an annual payment to the Anzac Day Proceeds Fund. As we are again on the edge of Remembrance Day and we pause to reflect on the now more than 100 years since the end of World War I, I think it is really good to see further support and further investment in those critical interventions and programs that support our veteran community.
We need to do more. That was touched on by the member for Bentleigh, and I want to also put on the record the need to do more to support our veterans’ mental health and wellbeing but also to connect them to opportunities after their critical service for our nation. I was just recently down at the Mordialloc Freeway smoking ceremony for the start of construction, and it was great to see recognised Veterans in Construction. They had the great orange vests on. This crew was out there on this project, supported by investment from the Andrews Labor government in infrastructure giving them the opportunity to get back on track, to get back to some sort of normality after significant service, including those that are dealing with challenges, stresses and PTSD post service. The change in that provision, and that it is expected to be a higher contribution as well, means more support for our veterans, and I am really passionate that this is a feature of this bill.
I have been in and out but have had occasion to listen to contributions on both sides, and those opposite have sent out the member for Kew in the final session of the state taxation bill. But the contribution from the member for Ripon showed that each and every time ‘tax’ is said it is as if it is a horrific burden on our state. I mean, if you sit at the Public Accounts and Estimates Committee, there is $73 billion worth of tax that comes in to underpin the prosperity of our state and the capital agenda we have. You can sit back and hoard it. You can sit back and hold onto it like the federal government might do, you might say, in chasing a phantom surplus at the expense of programs and initiatives that support people with disabilities. The ‘aspirational surplus’ they are calling it, I think. That aspirational surplus they are trying to deliver on the back of cutting services to people with disabilities. You can hunt down tax, and you can find every which way of attacking it on that premise, but the investments you need to make in your state and the prosperity that you underpin come from the decisions that we make each and every day in government and that communities make each and every day. There is this notion of, ‘Oh, tax this and tax that’. I want to know, when the member for Ripon comes back in to vote on this bill: what would you forgo and what would you cut? When you are talking about, ‘Tax this’ and, ‘Too much tax there and here’, what would you cut? What would you give up? What would you sacrifice in our community? What changes would you make?
It might be that you cut the first home buyer contribution; you might turn around and do away with that. For all the people who are trying to get on the property ladder, trying to find their first opportunity to achieve the dream of owning a home, it might be that members opposite would cut that back. They might cut back the veterans supports and services in this bill. Would they be on the chopping block? What about health? What about education? Past behaviour is an indication of future outcomes, and we have seen before what those opposite do when given the opportunity to go after tax revenue and go after services.
The lead speaker talked about ‘hiding’—well, it is not hidden, it is written out here. It is not hidden in this bill and the second-reading speech and the clauses. It is written here what we are going to do. It is quite clear. The percentages are all put forward. It has been briefed out. But when you talk about the tax revenue, I am really curious. It is a double-edged sword. You cannot attack tax and the revenue base but then not give an offset or the savings that you would make or the projects or services that you would forgo when you come in and give a speech of that nature about small government.
I wonder sometimes why those opposite, out of the playbook of the Institute of Public Affairs, come in here and go, ‘They’re after government, they’re after state government, they’re after the level of service provision that state governments provide—they’re after that’. Why do they come in and be members of Parliament? Why not just be lobbyists on the outside smacking into state governments? I think some of them would do away with the level of state government or local government. It must be hard getting up every day and having a chip on your shoulder that you are in the state Parliament when you attack the revenue base that underpins the service prosperity of our fellow Victorians. It is an oddity. I have still not worked it out from listening to their first speeches and the contributions some of those opposite have made. But come in here and tell my community in Mordialloc what you will cut—and all of our communities, and your own communities. When you talk about the tax base, what will we forgo and what will we see change?
Because we know what it means when you hear about concerns about tax—leading into the last state election, what did we hear from those opposite? We heard a very Orwellian term: a commission of audit. I have not seen a conservative put forward a commission of audit ever to look to increase spending on services. Never. The member for Bulleen, the member for Malvern—it might have been different. They may have been pure in their intentions, who knows? But I have never seen a conservative put forward the words ‘a commission of audit’ and come out investing in more services. That means cuts. When they attack the tax base, that is what they are talking about.
So this bill is critical in straightening out some loopholes, particularly loopholes around vacant properties. I think of the challenge that we face of racing towards 2051 with 10 million Victorians in our state. As we grow as communities, Acting Speaker and member for Frankston, down our neck of woods—down the Nepean Highway, down the Frankston line—as we manage that growth and more people want to come into our patch, how do we make sure housing is affordable and how do we give people the opportunity to own their own places or to rent decent, affordable accommodation and housing? How do we give people that opportunity to live in the communities that they have grown up in?
When we talk about derelict or vacant premises, straightening out that critical loophole and encouraging investment in land and development and housing stock, I think it is really important. We have a challenge in our state of housing being affordable, of people having access to housing. It is why we have put forward some of the best stamp duty concessions going to make sure people can access housing. But in established areas, and 70 per cent of Victoria’s growth will be in that metropolitan area, how do we manage those challenges going forward? With properties that remain derelict but on someone’s balance sheet as an investment, well, we all have a contribution to make. We have an obligation to our fellow citizens, our fellow Victorians, to make sure the comfort and security of owning your own home or renting is affordable, and I think it is a critical thing to encourage investment in the sector and that increased support.
This bill tidies up a number of things, and I think particularly recapping the focus around the Anzac Day Proceeds Fund, it is a great policy, great work. On the eve of Remembrance Day and commemorating the significance of our servicemen and women, that is a great, great element of this bill. Changes to the land tax that provide that greater certainty and tidy up those loopholes for investors or property developers or people who are holding onto pieces of land I think are really sound and really important as well. Then there is the overarching agenda of the Andrews Labor government to make access to housing, particularly in our growth corridors, easier and better with our stamp duty concessions.
I grew up in the south-eastern suburbs of Melbourne, out in Berwick. All my mates are moving out further to Officer, to Pakenham now, and they are building the communities of tomorrow. The member for Melton talked about those growth corridors out his way. We were out at Darley the other day. Property prices are going up. You can still probably get a concession. It is a great place out there at Darley. We went to Darley Primary School and checked it out.
A member interjected.
Mr RICHARDSON: It was good fun. Yes, it was good fun. Those young families are now getting that opportunity to get on the property ladder, the security of housing that comes from that ownership. I think our government’s record in providing that tax relief to Victorians to get that house and that opportunity is really strong and sound policy. We are on the side of working people, we are on the side of people who are having a go in their communities, and this is just another example of how we are supporting Victorians and making it fair, making it equitable and doing our job by closing loopholes and creating greater certainty. I commend the bill to the house.
That the debate be now adjourned.
Motion agreed to and debate adjourned.
Ordered that debate be adjourned until later this day.