Wednesday, 2 August 2023

Motions

Taxation

Matthew BACH (North-Eastern Metropolitan) (11:44): I move:

That this house:

(1) notes that:

(a) Victorians are paying $5638 per person in tax annually under the Andrews Labor government, higher than any other state in Australia;

(b) the Andrews Labor government has raised taxes on Victorians 49 times since its election in 2014;

(c) the Andrews Labor government has failed to act despite soaring cost-of-living pressures on Victorian families; and

(2) congratulates the opposition on the release of its discussion paper Making Victoria’s Tax System Work: Reducing Cost Pressures for Families, Community Groups and Business.

It is good to rise to speak on this notice that this house notes that, firstly, Victorians are paying a huge amount per person in tax annually under this government – $5638 per person; that is higher than any other Australian state – and secondly, that the government has raised taxes on Victorians almost 50 times. It might be 50 times now; I will check with Ms Wilson in the other place. But at a minimum it is 49 times; we will go with 49.

David Davis: Fifty.

Matthew BACH: Oh, it is 50, Mr Davis.

David Davis: It’s actually 50 new and increased taxes.

Matthew BACH: New and increased taxes – we are actually at 50, as I suspected. Thank you, Mr Davis. Thirdly, the Andrews government has failed to act despite soaring cost-of-living pressures on Victorian families – and that is the nub of the issue. Finally, together we congratulate the opposition on the release of its discussion paper Making Victoria’s Tax System Work: Reducing Cost Pressures for Families, Community Groups and Business.

It is our proposition that the tax system here in Victoria is broken. It is so regressive. To the best of my knowledge no government in the long history of the world has ever taxed its way to prosperity. Yet it seems to be that this is the view of the Andrews Labor government. Our view is that to ensure that we become more prosperous as a society and to ensure that hardworking families have cost-of-living relief, what we need to do is to encourage investment and to encourage growth. There are so many things we can do to modernise and reform our tax system in order to ultimately achieve that aim, and it is such a pressing aim right now. In our region we know so many people are hurting. We have had I think it is now 13 interest rate rises in the period of just over a year. Power bills are going through the roof, and the government’s plans on gas are tangential to this motion but nonetheless relevant. School fees are going through the roof, and I will talk a little bit anon about the government’s schools tax on which it has had three different positions in the last two days. All of these additional taxes, many of them regressive and bad taxes, are hurting Victorians.

Taxation is so important. I heard Mr Limbrick talk about tax yesterday and the fact that his party will always oppose tax increases. Well, our position is that it is incredibly important that we have a strong and stable revenue base and a strong and stable taxation base to fund the things that Victorians expect the Parliament to fund each year – our hospitals, our schools, our emergency services and important infrastructure like roads and rail. There are ways and ways of doing this of course, and there are ways and ways of minimising taxation as you do this.

Firstly, I would like to point to some of the comments that others have made interstate about the state of play here in Victoria. Given that our tax system is demonstrably the least competitive in the country and given that Victorians are experiencing a cost-of-living crisis, I was particularly interested to hear some commentary recently from the Treasurer in South Australia. I find myself constantly impressed by the South Australian government and the South Australian Premier. Nonetheless here is a comment from the South Australian Treasurer just a month and a half ago. He said:

If you are a large corporate employer, especially in these days when even people in senior positions perform remotely, the choice should be obvious. Why would you choose a high-tax, high-cost location like Victoria …

That commentary is from South Australia’s Labor Treasurer. And they are right of course, because instead of a regressive tax system, a broken tax system and the highest taxes in the country, what we should have is a tax system that reduces costs for families and community groups and also for businesses.

I want to talk about families, because in embarking on this endeavour announced a week and a half ago by Mr Rowswell and Ms Wilson, both from the other place, first and foremost what we are seeking to do is to start a discussion with Victorian businesses and Victorian families about the ways in which we can reduce the cost of living. That is first and foremost what we are seeking to do. I remember distinctly – I am sure all members do – that before the 2014 election the opposition leader at that time was doing the media rounds and he said that if the people of Victoria voted for a Labor government then there would be no new or increased taxes. I know of course that from a Labor opposition that was a very appealing proposition to the Victorian people, and the Victorian people voted for Mr Andrews and the Labor Party in 2014 – no new or increased taxes. It is a claim that has been repeated at every election actually. Mr Pallas, the Treasurer, repeated the claim just before the last election – just like we were told we would have a Commonwealth Games before the last election – ‘No new or increased taxes.’ But in actual fact we have had 50 new or increased taxes since that time. The problem of course with simply piling on more and more and more taxes is that that hits families.

In the booklet that was launched by my colleagues in our economic team, there is a helpful list of every one of those 50 – at that time 49 but there have been even more increases since then – new or increased taxes. This is a publicly available document, and so all members of the house, should they wish, could go to bettertaxsystem.com.au to get access to that list. It is a good URL, President, don’t you think? There in the hardcopy booklets that have also been distributed we list the new or increased taxes. Just by way of example: a new stamp duty on property transfers between spouses, which was introduced some time ago; increased stamp duty on new cars; a new stamp duty on off-the-plan purchases; more recently, huge increases to the WorkCover average premium rate; increased payroll tax on businesses; the jobs tax; increased land tax on landholdings above $300,000; land tax on landholdings between $50,000 and $300,000; and the rent tax, pushing rents up at a time when, as we have discussed in this house, there is a housing crisis. So many Victorians are crying out – quite literally crying out in this place actually when we last discussed rent – and are in immense distress. Why would you put additional taxation upon landholdings between $50,00 and $300,000, pushing up rent in those circumstances? There are increased absentee landowner surcharges, increased wagering and betting taxes and a payroll tax upon independent schools. These are just some of the new and increased taxes that are hurting families so much right now.

To get down into the weeds somewhat and to look at the figures, if I may, over the next four years what this has meant – all these new and increased taxes – is that tax revenue is forecast to increase by 16 per cent. We have already had 50 new or increased taxes. Tax revenue is set to increase by a further 16 per cent over the next four years. By contrast, our gross state product is set to grow by only 1.5 per cent in this financial year and an average of 2.7 per cent annually over the next three years – these are figures from the government’s own budget papers. Given that very significant expansion, it is worthwhile noting where the government says we will see that increased revenue – that increased revenue from further hits to businesses and further hits to families.

Payroll tax revenue, for example, according to the budget papers is forecast to be $8 billion in this financial year but then increase by an average of 4.6 per cent every financial year after that over this budget period. Land tax revenue is set to go up too, to be $6.1 billion in this financial year and then again increase by an average of 3.7 per cent every further year over the period of this budget. Stamp duty, which is such a regressive tax – a tax on mobility – is forecast to be $7.4 billion in this financial year and then increase by an average of 8.4 per cent every year over the out years in this budget cycle. Revenue from the mental health and wellbeing levy is set to be $912 million in this financial year, and then that will increase too by an average of 5.5 per cent annually over the next few years. And finally, although I could go on, revenue from the new so-called COVID debt levy is set to be $2 billion in 2023–24, this tax year, and then increase by an average of 4.9 per cent annually over the next few years. So at a time, as I say, when we have a cost-of-living crisis, when our gross state product is growing by a small amount, tax revenue is set to outstrip that, and the impacts that we are seeing on families are significant.

Let me talk, if I may, about just one of these tax increases, just one of these new taxes.

Georgie Crozier: The schools tax.

Matthew BACH: Colleagues may talk about others, and there are many to choose from – there are 50 to choose from, in fact – but I would like to talk, as you say, Ms Crozier, about the schools tax. The government shocked the school sector on budget day when it announced with no prior consultation that for the first time the longstanding payroll tax exemption that independent and denominational schools have enjoyed would be removed. The budget papers said that this would raise $422 million – a very specific figure – over the period of the budget, and yet, as is the way with this government, that commitment started to unravel on day one. Initially the government said that the threshold, if you like ‍– the level of school fees at which schools would have to pay payroll tax – would be $7500, and the Premier said that these were high-fee schools that needed to pay their fair share. The Premier said that these schools had had a sweetheart deal for so long. Well, Labor members who spoke anonymously to the media reported that so many members of their communities reached out to them to say, ‘What are you doing?’ They might send their kids, for example, to Oakleigh Grammar, with fees of $8000. The principal of Oakleigh Grammar spoke out about the nature of his school community. It is so multicultural, so aspirational. Of course this is a tax on aspiration, on choice, on people who want to save as hard as they can – ordinary Victorians – to then send their children to the school of their choice.

At the Public Accounts and Estimates Committee on a Friday the Treasurer defended the government’s position: ‘Schools with fees of $7500 are high-fee schools; they’ve had a sweetheart deal when it comes to taxation. They must pay their fair share.’ However, by the afternoon so many Labor members had trodden a path to the Premier’s office that when the Premier appeared before the Public Accounts and Estimates Committee it was a very different story. He said no, the threshold would not be $7500, it would be slightly different. Ultimately, the government set an arbitrary threshold of $15,000, but as reported by the new education editor at the Age yesterday, Robyn Grace, nobody knows how the government comes to this figure of $15,000. Yesterday the government said that no further schools would be added to the hit list until 2029. That was first thing in the morning, but during question time, when Ms Tierney was talking about pet censuses, the Minister for Education released a statement to say that was wrong, that in actual fact every single year – every single year –

Gayle Tierney interjected.

Matthew BACH: Well, Ms Tierney says, ‘What has that got to do with it?’ I am not sure. Maybe you were running interference for her. But nonetheless Minister Hutchins came out to say that every single year more schools would be added to the hit list.

I was speaking to my colleague the member for Kew about a school in her electorate for less than 30 children with special needs. That is going to be hit with this tax slug. The government has maintained –

Sonja Terpstra interjected.

Matthew BACH: They should do the heavy lifting, Ms Terpstra? Is that what you say? What did you say?

Sonja Terpstra: I’m not engaging with you.

Matthew BACH: You are engaging with me. The government has said that this school in the electorate of Kew, catering for fewer than 30 children with special needs, should pay its fair share. However, today the beleaguered Minister for Education, potentially the worst minister in this government – although that is saying something – came out to say that in actual fact there may be a way of taking away this new obligation to pay payroll tax from this tiny school for special needs.

The government has had now six different positions on the schools tax, and that may be one huge problem with the way in which the government has sought to communicate this tax change. But at the end of the day what it means for Victorian families, 42 per cent of whom choose to send their children to independent schools, will be quite straightforward. The way the government has communicated this tax change has been chaotic and complicated, but the outcome is straightforward: school fees going up in the order of over $1000 –

The PRESIDENT: Apologies, Dr Bach, I have to interrupt your contribution for question time. Before I call the first question, I remind members, or alert members if they do not know, that the new parliamentary integrity adviser Professor Charles Sampford has commenced his four-year term this week. Professor Sampford will be available to meet with people in the north library this afternoon between 2 and 3:45 pm, so I would encourage members to drop in and meet with him and learn about his role of providing advice to members in the next four years.

Business interrupted pursuant to sessional orders.