Thursday, 14 November 2019

 Mr RICH-PHILLIPS (South Eastern Metropolitan) (10:15): I rise to make some remarks on the State Taxation Acts Further Amendment Bill 2019. I do this in the context of the release yesterday of the Auditor-General’s Report on the Annual Financial Report of the State of Victoria: 2018–19, which highlights the pressure that the Victorian budget is now under. This will come as no surprise to members of this house and indeed members of the Victorian community, who have seen the way in which this government has managed the budget over the last four years and the way in which we have seen reckless spending by this government, which is now coming home to roost.

In the first period of this government’s term of office, from 2014 we saw very strong economic conditions in Victoria. We saw a strong property market give the government high levels of stamp duty on property transfers and high levels of land tax. We also saw strong retail conditions with strong GST receipts flowing to the state of Victoria. The government was in clover. It was able to pay off all those vested interests which had helped get it into government. It was able to commit to very substantial increases in the size of the public sector and the cost of the public sector by way of enterprise bargaining agreements.

All was rosy, and it sailed through that first term of government, building additional cost after additional cost after additional cost into the budget for the state of Victoria and the general government sector. But, of course, this year we are now seeing that coming home to roost. We are seeing an economic situation in Victoria where in the last 18 months the property market has softened in terms of the number of properties being sold and the prices that are being achieved for those properties, with a consequential drop-off in the estimates of stamp duty revenue, and we will likely see that flow through in land tax. We have seen a softening retail sector across Australia, which has had an impact on GST receipts and forecast GST receipts.

We are now in a situation where the government is under great pressure in the preparation of its 2019–20 budget. The chatter coming out of Treasury Place is very much about the challenges this government will face in framing that budget. Indeed already the talking points that have been sent to the government backbenchers indicate that the only issues the government is looking to fund over the course of this term are things that they committed to at the last election cycle. They have already been told that there is no money for anything new that was not an election commitment, because the budget is tight and they are struggling to balance the books for May next year.

To put that in context, we have seen the massive ramp-up in expenditure and we have seen the massive ramp-up in revenue. In the last full year of the previous government, which was 2013–14, total state general government revenue was just over $52 billion and expenditure was just over $50 billion. For the current budget year, 2019–20, revenue is now forecast to be $71 billion. That is a $19 billion increase in revenue, and on the expenditure side it is just under $70 billion—$69.9 billion expenditure.

In just one term of government the budget expenditure has grown from $50 billion to $70 billion, and that growth is not sustainable. Now that economic conditions are softer than they have been, we are seeing the consequences of that. I think Victorians can expect a horror budget come next May, and I suspect we are going to see between now and then, with the midyear budget update due in November or December—and no doubt that will drop after Parliament rises—some pretty horrific conditions in the budget with commensurate movements by the government to claw back revenue where it can.

That brings me to the bill that is before the house today. The State Taxation Further Amendment Bill seeks to make a number of amendments across taxing statutes: the Duties Act 2000, the Gambling Regulation Act 2003, the Land Tax Act 2005 and the Valuation of Land Act 1960. These are largely portrayed by the government as tidy-ups, as clarifications of existing taxation legislation, but of course they are focused on grabbing as much revenue from as broad a base as possible to plug the holes that we are now seeing in revenue, with the implications that has for the budget next year.

To run through the measures which are included in this bill, in respect of the Duties Act 2000 the bill seeks to amend the Duties Act in relation to a line in primary production requirements for the duty concession and exemption for young farmers, with changes to the land tax exemption for primary production land in an urban zone in greater Melbourne. It seeks to retrospectively change the legislative basis for charging insurance duty where an insurance policy on a Victorian risk is obtained from an overseas insurer. I will come back to this point shortly.

With respect to the Gambling Regulation Act 2003, the bill amends that act in relation to legislating an annual payment to the Anzac Day Proceeds Fund of one-thirtieth of wagering and betting tax revenue payable for the month of April and makes changes to the Victorian racing industry payment from the Hospital and Charities Fund to the Anzac Day Proceeds Fund. Those are provisions which the coalition supports. We recognise that it has been a longstanding case that some proceeds from betting activity on Anzac Day have been made available to the funds which support veterans. That on-course activity on Anzac Day, and with respect to Anzac Day, has diminished, so it is appropriate, as opposed to betting activity not taking place on course as the nature of gambling in the state has changed, that the basis on which the proceeds to those funds is calculated is broadened to reflect that activity is now taking place away from actual racing activity. This change to the Gambling Regulation Act will reflect that and will ensure that the proceeds which go to the Anzac Day Proceeds Fund will be sustainable into the future as the nature of racing changes.

With respect to the Land Tax Act 2005, the bill seeks to extend the vacant residential land tax to properties that remain uninhabitable for two years or more. It seeks to reform the primary production land exemption for land in an urban zone in greater Melbourne to require a connection between the landowner and the business of primary production on the land so that an exemption is not available in respect of farming activity on land where it is undertaken by somebody other than the landowner. It seeks to exclude beneficiaries of an implied constructive trust as owners for the purposes of principal place of residence and primary production of land exemptions.

With respect to the Valuation of Land Act 1960, the bill amends that act in respect to the deadline by which rating authorities must give notices of valuation, noting the changes that were made last year in respect of the way in which valuations for land tax are undertaken.

So there are a number of aspects of this bill and the coalition parties have substantial concerns with respect to two of those. The first one I will address is the amendment to the Land Tax Act 2005 in respect to extending the vacant residential land tax to properties that remain uninhabitable after two years or more. This comes on the back of this government’s earlier tax grab, where it first established the vacant residential land tax. This was pitched by the government as a housing affordability measure. It was pitched as a way of encouraging the owners of vacant residential properties to make them available in the housing market—to make them available for rent or to occupy them. Of course, that was never the government’s policy driver. The government’s policy driver was simply to expand the land tax base as broadly as it could.

As members know, there are a number of properties which are exempt from land tax. The principal place of residence is the main type of property that is exempt from land tax in Victoria. As the government needed revenue in the last couple of years, it sought to remove as many exemptions as it could, where it felt it could do that without adverse political consequences. One way in which it thought it could do that was by introducing a new vacant residential land tax, to broaden the base of land tax to pick up a new cohort of properties which were previously exempt on the basis that they were not full-time residences, on the basis that they were not occupied for a certain period of time in a given year, and to impose land tax on them.

With the acute need for revenue, the government is now seeking to expand that vacant residential land tax to properties that are uninhabitable. This is going to have adverse implications for many Victorian families because this is likely to impact on properties that have been residences, that have been inhabited by, particularly, elderly people, who then, on needing to move out of those properties and into aged care and the like, are left with a property which in a practical sense is uninhabitable. Many members of this house will know, having visited constituents and indeed even having elderly relatives, that quite often for elderly people who have lived in properties for a long period of time—30, 40, 50 years or more—and are of an advanced age, in their 80s or 90s, the properties in which they live are quite often in a practical sense, in a market sense, uninhabitable because they have not been the subject of renovation since they were constructed. Maintenance may well have not been carried out to a standard that makes them occupiable in a commercial sense, but they have been nonetheless home for the elderly person for a very long period of time and they have been content to live in those conditions. When that person either dies or goes into aged care, in a practical sense the property is uninhabitable in terms of then putting it onto the rental market or onselling it to somebody else.

With the changes being introduced by this bill, those properties after two years will become subject to land tax under the vacant residential provisions, notwithstanding the fact that they are not able to be used as properties. There will now be an onus, a pressure, on the families of those elderly people to find the capital to undertake renovations so those properties can go into the rental market or be sold in a commercially viable manner. We believe that extending what was already a poorly conceived taxation measure by this further step in a way that is going to impact particularly vulnerable people at a vulnerable time in their lives is inappropriate, and it is something that we do not support.

The other matter I would like to touch on is the amendment to the Duties Act 2000 which seeks, by way of clause 8 of the bill, to retrospectively change the basis on which stamp duty is levied on certain insurance contracts. The intent of the government—and we accept this has been the intent of the Victorian government back to 2014—has been that stamp duty be payable on insurance policies, where a policy seeks to insure against the risk in Victoria. Where a policy is not written in Victoria, where a policy is written internationally, offshore, we accept that it has been the intent that that policy be subject to stamp duty. In that case, the insured party would be liable for the stamp duty, rather than the offshore insurer. But this is a matter which is now subject to challenge. I understand there are a number of cases before the court which seek to challenge the basis on which that stamp duty would be levied.

As I said, we do not dispute the policy intent of levying stamp duty on insured risks in Victoria, irrespective of where they are insured. What we do challenge is the government’s intent, by way of clause 8, to make this retrospective, irrespective of what the court may determine in the matters which are currently proceeding. We do not believe it is appropriate for the government to now seek to change this provision with a retrospective clause. We believe in fact it is unconscionable for the government to be seeking to change this provision by way of this retrospective clause when the matter is subject to judicial determination. So we will be opposing clause 8 in committee. We believe that imposing what is effectively a retrospective measure in this way, in the face of legal challenge, is simply inappropriate. But it does reflect the circumstances the government has got itself into with its budgetary position and the Treasurer’s need to attempt to claw in or claw back any revenue he can.

We will be opposing clause 8 when the bill goes into committee, and notwithstanding our support for the changes to the Gambling Regulation Act 2003 with respect to the Anzac Day Proceeds Fund, but given the very adverse impacts which will apply to some vulnerable Victorian families by virtue of the extension of the vacant residential land tax, we will be opposing the bill in totality on the second reading of its consideration today.

 Mr GEPP (Northern Victoria) (10:33): It is with great pleasure I rise to speak on the State Taxation Acts Further Amendment Bill 2019. I am a fan of taxation. I am big fan of taxation because I think taxation, and the taxation system, is an enabler for our community. It provides us with the wealth and the funds to ensure that we have the services and the infrastructure that we so desperately need across all aspects of our community. It does not leave society in a Hunger Games type of mentality where people, depending on their wealth, survive or not. Rather, a taxation system seeks to redistribute some of the wealth in our society and ensure that there is some levelling of the playing field in terms of decent living standards, and it ensures that everybody in our society can contribute through the taxation system. Of course we know the taxation system in this state and in this country has many different facets to it. I am a fan because I do think that it means that we can all make a contribution. That does not mean that we tax everybody to the hilt of course, but there has got to be measured and reasonable taxation to deliver the services and meet the needs of the community

Of course taxation is so important in this state because it contributes so much to our infrastructure. We have got enormous amounts of infrastructure investment going on in Victoria as we speak, and that cannot be done without a contribution through our taxation system. It also means so much to the levelling of our education and health playing fields. We hear it often in this place, you would think it was doom and gloom, and yet when we walk outside of this place—we know, for example, that our health system is one of the best in the world. Sure, it has got its flaws; that does not mean that we stop working hard to deliver the best possible health care that we can right across the board. It is important that we are able to fund those things. It is so important to the entire Victorian community that we do have world-class health facilities, health services and health professionals, and to do that you have got to have funds.

We recognise the importance of education in this state. Indeed I think when you drive around Victoria and you see on numberplates ‘Victoria—the Education State’, and you look at the investment that this government has made in the areas of both primary school and secondary school, in universities and in TAFE, it backs up and franks that very small slogan on those numberplates. It is something that is very near and dear to so many people. We understand that at the core of providing for the young people in our state so they can productively contribute to society when they leave school is the need to provide them with the best possible education system that we can. In recent times we have made the announcement about early learning in three-year-old kinder, the rollout that is going to occur over the next couple of years and the importance of that to the development of our youngest citizens in the state, to their development and their ability to be the best that they can be. It means that we as a society need to make that investment, and we do that through the collection of funds, through our taxation system, so that we can reinvest those funds in the important aspects. So I am an enormous fan of our taxation system.

Mr Ondarchie interjected.

Mr GEPP: No, Mr Ondarchie, I am a fan of taxation as a general principle. As I said earlier in my contribution, it is about measured, appropriate levels of taxation in the right areas and making sure that everybody contributes fairly. One of the great shames of course about taxation in this country is that some of the richest in our society, both individuals and corporations, spend so much in avoiding their taxation responsibilities. They spend an enormous amount of money trying to avoid paying taxes.

The average salary and wage earner in this country does not get the luxury, if they are having a bad year financially, of bailing out of the tax system, but of course those who can afford it and can pay their accountants and financial advisers to set up systems so that they can avoid paying tax have those means to do so.

Mr Ondarchie interjected.

Mr GEPP: No, I’m not a fan of increased taxes. I am a fan of taxation where it is appropriate and where it is necessary to provide the services and to support the values that we espouse in this place as often as we can.

It is a pity Mr Quilty is not in the chamber. I have heard him say things similar to some of the interjections coming from across the chamber. He has been critical of the taxation system many times over just in his short stay in this place, but I wonder if he had the same view when he was actually part of the taxation collection system. When he worked for the tax office, when he was drawing an income, when it was feeding his family, did he have the same views? Perhaps he did, and it would be interesting to hear. I hope he is on the list of members to contribute in this debate.

I throw out the challenge to Mr Quilty: if you are going to oppose this bill and pour bucketloads on the taxation system in this state and in this country and, you know, how it impinges on the freedoms of individuals, and if you want a Hunger Games style of community where the strong and the wealthy survive, I wonder if you harboured those views when you were drawing a salary from the tax office and you were part of the taxation collection regime. Or was that just a bit of a faux opposition back then? I look forward to that contribution.

In terms of taxation in this state, of course the Andrews Labor government is now into its second term of office. I go back to our first term when we delivered tax cuts to almost 40 000 businesses by increasing the payroll tax-free threshold from $550 000 to $650 000—a deliberate attempt to support businesses throughout Victoria. We understand the enormous contribution that businesses small, medium and large make to this great state of Victoria, and we think it is important that we do some of the heavy lifting for those businesses by giving them tax relief so that they might reinvest in their businesses and assist in the growth of the economy. Of course in the 2019–20 budget we are building on those reforms by increasing that threshold to $700 000 in two instalments of $25 000 from 1 July 2021. So we continue that program of investment.

In an Australian first—and I know this all too well in my own electorate of Northern Victoria—we cut payroll tax for regional Victoria in our first term. As I said, and as we have announced in this year’s budget, we are cutting regional payroll tax even further, down to 25 per cent of the metropolitan rate. This will be implemented over a three-year period, with the rate falling by around 4 percentage points each year from 1 July 2020. Of course we will cut payroll tax even further for about 3500 businesses, supporting companies in regional Victoria to grow, and it is so important in my electorate that we are doing so.

We have also provided other significant tax relief for Victorians—for example, through getting rid of stamp duty for first home buyers purchasing houses that cost $600 000 and applying concessions to purchases of up to some $750 000. In the first two years of that program more than 62 000 Victorians have claimed stamp duty concessions and exemptions, saving them in excess of $1.1 billion.

To go back to Mr Ondarchie’s interjection earlier, that is about responsible taxation. That is about making sure that the taxation system is working for all Victorians, particularly those who need it, and where we can provide the necessary tax relief to give greater opportunities for those people then, as we have demonstrated, we do so.

I will not go through all of the aspects of the bill. Mr Rich-Phillips has touched on many of those and he has talked about some of the areas of concern to the opposition. No doubt when we go into the committee stage later on those concerns will be addressed by the government in greater detail. So I will not take up the chamber’s time in rehashing some of the areas that Mr Rich-Phillips talked about. Rather, while I am on the business of tax reform, I might also talk about 2018, when we doubled the first home owner grant to $20 000—again, particularly targeted at regional Victoria—to make it easier for people to build and stay in the community. Since July 2017 more than 17 000 people have taken up the first home owner grant, saving some $238 million for Victorians getting into their first homes.

From July this year we have delivered a 10 per cent concession on the transfer of commercial and industrial property in regional Victoria. This will increase by 10 percentage points each year until it reaches the full 50 per cent concession. This will save businesses around $69 million over the next four years and provide benefits on an expected 2400 transactions each year. That just underscores that the taxation system that we have in place in Victoria is making Victoria the economic powerhouse of this nation. It is targeted, it is measured and it is appropriate to deliver the services that Victoria needs.

We have talked about the record investments that this government has made in the health sector. Yesterday the Minister for Health spoke in a ministers statement about the increase this year of $100 million in the Regional Health Infrastructure Fund, which is so important to areas such as my electorate in ensuring that those regional health systems have a pipeline of funds available to them to improve the services that my constituents and those of other regional electorates throughout Victoria so desperately need.

In conclusion, I reaffirm my commitment to taxation. I think it is a virtue for any decent society to have a good, decent, healthy taxation system that contributes to the development of our society. That is what we have before us. These changes to the system the minister will no doubt address in the committee stage, and I am sure he will convince the house that they should be supportive of these changes, as I am.

 Mr QUILTY (Northern Victoria) (10:48): I will be brief, but before I launch into my speech I will acknowledge the contribution of my comrade here Mr Gepp. While I was not in the chamber while he was talking, I did hear him. Indeed I held my views on taxation while I was working at the ATO. I worked in the advice area rather then audits so I could actually help taxpayers rather than persecute them. Indeed as senior ATO officials became aware of my views they became a little concerned that I thought taxation was theft. In fact I owe the fact that I kept my job to the good services of the CPSU, of which I am a member.

Anyway, I will be brief. This bill will increase or broaden taxes in five ways—

Mr Gepp: That’s a ‘Yes, I still took the pay’.

Mr QUILTY: I certainly took the pay, and I did the work. The Liberal Democrats oppose this increase because in 1960 governments in Australia made up around 25 per cent of GDP but today in Australia the government spends close to 40 per cent of GDP. Governments have a compulsive spending problem, not a revenue problem. To cover this bill with a veneer of credibility the government is using it to pass into law something they have been doing for a long time, which is handing a small share of gambling taxes to veterans’ charities and horse welfare. To be very clear: this happens now. The government is just throwing it into this bill so they can talk about that instead of the tax increases. This bill also places the government in the odd position of being anti-gambling while promoting gambling as a charitable activity: ‘Head down to Crown Casino this April to promote veterans welfare, and while you’re at it, have a punt on the ponies to support rehoming racehorses. But wait, there’s more. Call now to get a free set of steak knives’.

The first two tax hits here are through amendments to the Duties Act 2000. The first tax increase is to make it harder for farmers to get exemptions to land taxes that were introduced by the government to reduce land banking as a means of increasing housing stock. That policy failed, as housing prices clearly show, but we still have the land tax.

The second tax increase is to make it easier for the government to tax more types of insurance. The final three tax increases are contained in amendments to the Land Tax Act 2005. The third tax increase is to extend the land tax that I mentioned earlier to cover vacant residential properties that are uninhabitable. Apparently the Melbourne rental market is so stuffed up that some people would rather leave properties vacant than rent them, so we got the new tax on vacant properties. Now we are asked to believe that people would rather trash their own properties and make them uninhabitable than rent them out. It seems like an extraordinary length to go to to avoid this tax. I wonder what the total number of dwellings we are actually talking about here is to require legislation to address this loophole. The land tax failed to address supply issues in the housing market, but it certainly did cause unintended consequences. Perhaps more taxes will fix that.

The fourth tax increase is to make the rules for farmers in and near Melbourne stricter through an elaborate mechanism where the landowner, the business of primary production and the land need to be connected. This is intended to address the problem of all that vacant land in Melbourne that people lease out for primary production to avoid land tax. The fifth and final tax increase is to exclude certain types of legal persons from land tax exemptions on the basis of farming. I reiterate that the vacant land tax was a policy measure that failed but which will remain indefinitely and get steadily broader and stricter while it does.

We are creeping steadily closer to our governments literally being bigger than what they govern in Australia. This has already occurred in some other developed countries like France, and they have gone on to develop an absolute basket case economy. Even small changes like these add up over time to bury our civil society under tax. This is among the many reasons why the Liberal Democrats will never vote for an increase in taxes or a decrease in liberty.

 Mr ONDARCHIE (Northern Metropolitan) (10:53): I rise this morning to speak on the State Taxation Acts Further Amendment Bill 2019 or, as it should be known, the ‘Sticking It Up the Taxpayer Yet Again Bill 2019’. This is a classic example of a government that over a long period of time, a long history, cannot manage money. And how do they solve that? Well, they do not go to the cost line; they go to the revenue line and say, ‘Let’s just stick it to the taxpayer once again to help fund our mismanagement’.

Let me give you some examples of that mismanagement, if I could. The West Gate Tunnel project—they said it would cost $500 million. Well, I think—and Mr Finn is aware of this—it is out to at least $6.7 billion now, $6.2 billion over the projected budget. The Metro Tunnel project—they said it would cost about $9 billion. It is out to at least $11 billion now, and they have hardly started the jolly thing, so another cost blowout. The Level Crossing Removal Project that they talk widely about—$5 billion. The Auditor-General said that it has blown out by at least $3.3 billion. This North East Link that they came to the election with and said, ‘We’re going to build this North East Link. It’s going to be fantastic’. ‘Don’t worry about the east–west link’, they said, ‘We’re going to build the North East Link. It’s going to cost around $5 billion’.

Well, they have not even started it yet and the cost is already out to $16.5 billion—another example of a government that cannot manage money. ‘No money,’ they said. ‘Not a cent is it going to cost us. Not a single cent to cancel the east–west link contract’. Here we are $1.4 billion later. It cost $1.4 billion to cancel a contract and not build a road. As I have told this house before, I have talked to investment communities right across the globe, and they are the people that said, ‘Are you the people that paid $1.4 billion not to build a road?’. Such is the reputation of Victoria on the international stage.

For the Victorian Heart Hospital they said $150 million. Well, that blew out by $393 million. For the Frankston line stabling project they said $187 million. That ended up costing $236.7 million. The Hoddle Street upgrade was originally $60 million but was then over $100 million to do it. The Casey Hospital expansion blew out by $33.5 million. The Ballarat line upgrade: those who look after the Ballarat area as part of their electoral region—I know Mrs McArthur would be a great example of this—I am not sure they got any benefit out of the Ballarat line upgrade. But anyway, they said it would cost $516.7 million to do it. It actually cost $549.5 million to build this, Mrs McArthur. That is a blowout of $32.8 million. Imagine what the people of Ballarat could have had with that extra $32.8 million. The Yan Yean Road upgrade they said would only be $95 million. Well, it turned out to be $126 million. That is $31 million the people of the northern suburbs could have had that they do not have now. The Frankston station upgrade budget was $50 million, but it turned out to be $11.8 million over that. For the V/Line fleet maintenance they said about $12.5 million. It actually worked out to be $23 million to upgrade V/Line. And the Huntingdale station car park they said would be around $4.8 million. It cost $11.5 million—for an upgrade to a railway car park.

But you worry about this mismanagement. I will give you a classic example: just before the state election, the intersection of Gordons Road and Plenty Road in South Morang was under a lot of pressure. The contractors were under a lot of pressure to have that project finished before the state election. They were working day and night—much to the annoyance of residents that had tractors, drilling equipment and thumping equipment happening all night outside their properties—because they had to get it finished before the state election, which they did. Here we are less than 12 months later and guess what they are doing to the intersection of Gordons Road and Plenty Road in South Morang? They are digging it up again. They are digging the whole thing up again—and they only finished it less than 12 months ago. This is a government that cannot manage money.

So just in the numbers I have talked about this morning, that is about a $25 billion cost blowout. What could that have done? What could $25 billion have done in Victoria? Well, that is 125 000 more ambulances. That is 926 secondary schools, 2083 desperately needed primary schools or four east–west links that they could have built with that—we would like just one, but they could have built four. One hundred and twenty-five women’s and children’s hospitals, 1563 more police stations, 42 suburban rail line extensions, 2500 new cardiac cath labs, 1700 more trams, nearly 1400 more X’trapolis metro trains or 1136 special development schools could have been built with that money that they have blown out. And this bill today is just about sticking it to the taxpayer and asking for more money because they cannot manage money. They said, ‘We can’t do it; we will just hit the taxpayer for more money’.

Why don’t they look at the cost side before they look at the revenue side? Well, they do not do that, because they have blown out on a whole lot of things in this state. Now, part of this bill includes an increase in the Victorian racing industry payment from the Hospitals and Charities Fund to the Anzac Day Proceeds Fund. Well, that is not something I am going to argue out because given my experience at the recent Spring Racing Carnival I think I have been a large contributor to that. But Daniel Andrews said to the people of Victoria the night before the 2014 state election, when he looked down the barrel of the camera to Peter Mitchell on Channel 7—

Mr Finn interjected.

Mr ONDARCHIE: Well, that is right Mr Finn. He said right down the barrel of the camera that he guaranteed to every Victorian there would be no new taxes in this state.

Mrs McArthur: Would that be lying or a mistruth?

Mr ONDARCHIE: Well, I think it is an unparliamentary term to call him a liar. I think it is unparliamentary, so I will not do that, but I will say he is probably the most mendacious Premier we have ever seen in this state. He gave him a commitment. He gave Victorians a commitment that there would be no new tax increases in this state, yet here we are today in November 2019 and there have been 25 new or increased taxes in this state. I will let Victorians be the judge about whether he has been honest with them or not.

But I tell you what is really interesting that has happened lately, is that little fella who goes out there talking a lot about state finances, Treasurer Tim Pallas, has been very quiet lately. He has been very quiet about the state of the state finances lately because I think the midyear financial outlook is a not far away and we are going to learn about where this state is at. It would not surprise me if that midyear financial outlook came out on Christmas Eve—it would not surprise me one little bit—because this place is in trouble. There is a sense amongst the business community that I talk to regularly that there is going to be bad news in the midyear financial outlook.

As I outlined, we have seen project blowouts, $1.4 billion not to build a road and even the Auditor-General in his latest report said this:

In 2018–19, the state generated $78.6 billion of revenue and outlaid $80.0 billion in costs. This resulted in a net loss from transactions of $1.4 billion. After adding other economic net outflows of $7.7 billion—arising mainly from revaluations of assets and liabilities—the state had a net loss of $9.1 billion …

The financial performance of both the state and the GGS this year deteriorated compared to last year by around $1 billion because expenses grew faster than revenue.

Now, anybody who has experience in running a business—and I am not sure, Mrs McArthur, if any members of the government have had experience running a business—knows that when revenue starts to be in a little bit of trouble, you look at the cost line. But not this government. They just throw more expenses at the government sector and then say to the taxpayer, ‘We’re in a bit of trouble. We don’t have enough revenue. We are going to hit you up for it’. Well, you go to any business that says, ‘We’re having a bit of trouble with our revenue; we’ll just put our prices up’, and we know what happens to those businesses. The customers walk away. I am hopeful that in 2022, when our customers get to make a decision around the financial competency of this government, they will walk away from it, because this government does not know how to manage money.

The state opposition will oppose this bill for those reasons. I did ask the Treasurer in September this year around land tax. I said, ‘You did valuations around land tax when prices were high, but we knew that prices had come off’. So I said to the Treasurer, ‘Will you have a look at this, because you’re hitting up people based on artificial value when the prices were higher. The market has now eased. How about you look at land tax value you based on what today’s current prices are?’.

He wrote back a letter that said it was too late, it had already been done and they were doing it this way. ‘We’ve already done the valuations; admittedly they were done at a time of high prices’, and he was saying, ‘We’re not adjusting them at all’. So when are you ever, Treasurer, going to go back to your customers and go, ‘Actually, we’re going to share some of this with you’? Never, because this government tends to spend money hand over fist with no regard for the state taxpayer, who they just hit up once again. In order to summarise where I am up to, this bill, which as I said should be called the ‘Sticking it Up the Taxpayer Yet Again Bill’, should be bitterly opposed by this house.

 Ms SHING (Eastern Victoria) (11:02): I rise today to speak to the State Taxation Acts Further Amendment Bill 2019, and in doing so I note that the comments that we have heard from across the chamber today have been pretty varied. They have canvassed the detail, which occurred in the case of Mr Rich-Phillips’s contribution, which again has some substance in it, which I will go to shortly, particularly as it relates to changes to the insurance duty provisions in the Duties Act 2000, but at the other end of the spectrum we had the rambling, all-but-incoherent discourse from Mr Ondarchie, who sought to indicate to the chamber that in fact this is a government that is spending—to paraphrase him—money hand over fist without regard to Victorian taxpayers.

What is interesting to note about what preceded Mr Ondarchie’s remarks in this regard is his long list of infrastructure investments that have been made throughout the state of Victoria that build on a record amount of investment in the heavy infrastructure, in the metropolitan suburban, peri-urban and regional development of our entire state, as the population grows, to make sure that we are not only providing the sorts of programs, facilities and services which only come under Labor governments, which are only funded by Labor governments, but that we are also investing in the sorts of improvements to road and rail infrastructure that benefit more than the small number of people who live in those leafy inner-city suburbs and look at their bank balances and wonder when they are going to stop counting zeros before that decimal point.

We see here that the State Taxation Acts Further Amendment Bill 2019 in fact goes to making sure that we continue to improve Victoria’s revenue and valuation laws. I do not propose to spend any further time on Mr Ondarchie’s piecemeal contribution—and I would say ‘stream of consciousness’, as it relates to talking about infrastructure on the one hand and how bad it is on the other—but what I do want to do is talk to the amendment being proposed by Mr Rich-Phillips and the indication that he has made in this chamber today on the proposed changes to insurance duty provisions in the Duties Act 2000.

When I think about the comments that Mr Rich-Phillips has made this morning and compare them to comments made by the Shadow Treasurer, Ms Staley in the other place, for the opposition, I note that as a matter of first principle those on the opposition benches acknowledge the imprimatur the government has for the policy position being advanced. They have both indicated in the course of this debate on state taxation that they acknowledge and accept the policy position which underpins these changes as proposed to the Duties Act 2000. It is really important then that we have a look at how that sits in relation to the opposition to clause 8 of the bill, which ensures that changes will have effect from 1 July 2014.

The Treasurer has been pretty clear in relation to the intent of these amendments to confirm that clear and longstanding policy position about the dutiable nature of insurance provided by an overseas insurer and also the fact that the policy ensures that there is not an operative competitive disadvantage when compared to insurers in other jurisdictions. Just to correct any misapprehension that may be operating in relation to these amendments, they do not in fact or in process represent any change to policy or practice because insured persons have in fact been paying the applicable insurance duty and these amendments are consistent with how the State Revenue Office (SRO) has always administered the provisions. What we do see, however, is that as a result of changes that occurred in 2014, the opposition has seized upon an opportunity to argue in relation to an amendment that in fact this represents an operation of retrospectivity, acknowledging on the one hand that people have already been paying this duty but on the other saying that the amendment should proceed to not enable the clause to operate in the way that the Treasurer has intended.

To be really clear, and in accordance with the content of a letter that the Treasurer has drafted and issued to a number of members in this place, the SRO has received and also denied refund claims. Those claims relate to duty already paid and, despite only recently being lodged, seek refunds of duty paid over the last five years. As part of determining these refund claims and prior to any Supreme Court proceedings being commenced, the SRO alerted parties to the government’s intent to amend the act to confirm the integrity of insurance duty. So there has been a history of discussion and exchange of information in relation to these amendments as proposed in the bill today. Providing that level of certainty will remove the need for litigation and prevent those select taxpayers from receiving a windfall refund of duty at others’ expense.

I also want to turn, within the time that I have available to me, to a number of other provisions in the bill, particularly those that are intended to operate under the Land Tax Act 2005 and in regard to the imposition of the vacant residential land tax on residential land in a specified geographic area. Residential land, just to be very clear, and as other members have foreshadowed in the debate in the other place, is defined as land ‘capable of being used solely or primarily for residential purposes’. That then carries with it the inclusion of a reference to land that is in fact habitable.

So the purpose of that tax is to encourage more land and more properties to be made available for rent or for occupation. At the moment where a residence is under construction or renovation the tax will only begin to accrue where that dwelling remains unfinished after two years. There is no corresponding provision, however, to deal with a residence that is uninhabitable on an ongoing basis, such as the homes which I think Mr Rich-Phillips was referring to when he talked about elderly residents who perhaps have not made any improvements on a home and therefore it would lose or not retain any of its commercial viability or value. So we want to make sure that through this amendment, if two years have passed and an uninhabitable residence on land remains uninhabitable, the land will become subject to vacant residential land tax.

It is very easy to try and characterise this as a grab, or whatever it was that Mr Ondarchie tried to run a comedy routine with earlier, but what we do know is that without freeing up land for people to use, we are not adequately discharging our obligations and responsibilities to provide opportunities for housing for the enormous numbers of people that are either being born in the state or coming to Victoria. We know that the creation of 500 000 jobs since we were elected in 2014, along with record investments in infrastructure, has seen that in metropolitan and indeed in regional areas Victoria has become a very desirable place to live, that there is a significant degree of certainty; but with that comes an upward pressure on the issues around demand for housing stock and a downward pressure on availability.

We have seen that it has been necessary to make changes to residential tenancies frameworks as well as to create many incentives for people not to leave their properties uninhabitable or indeed incapable of being lived in by others. Consistent with the existing law, the state revenue commissioner will retain that discretion to extend a period of non-application beyond that two-year period if there are acceptable reasons that the home remains uninhabitable at that time. That, again, goes to the commentary made by Mr Rich-Phillips earlier of the sort of scenario that he described, of ageing members of the population moving into aged-care facilities who perhaps have not had an opportunity or indeed may not necessarily have the means to pay for capital upgrades works or maintenance to ensure that their home is habitable. Again, that discretion will sit with the state revenue commissioner, and it is entirely appropriate that that does so. Specifically, and there is a reference to this in the second-reading speech and it was also part of the discussion in the other place, if a property is uninhabitable due to the decisions of government—so issues of a road overlay or a major construction project—that would be one explicitly defined example of an acceptable reason to suspend the application of vacant residential land tax until the situation is resolved.

We know that as part of large-scale infrastructure, which eclipses to a factor of about three the volume of any infrastructure investment this state has ever seen before, that in fact there are times where acquisitions are necessary. We saw that with the removal of level crossings at a number of sites, and that has been something that communities have been part of as a conversation since we were first elected in 2014. It stands to reason that the decisions of government as we have made them in that regard around the removal of those level crossings, particularly on the Cranbourne-Dandenong line with the removal of nine level crossings, would necessitate consideration by the state revenue commissioner of the impact of that as it relates to what might otherwise be the imposition of a vacant residential land tax.

Making sure also that we amend the land tax provisions in relation to tax exemptions for primary production land is another significant part of this bill as it relates to the greater Melbourne urban zone, and making sure also that we make amendments in relation to land held in implied or constructive trusts. This also sits alongside the decisions made in the Court of Appeal as they refer explicitly to the legislative definitions of owner extended to the beneficiary of an implied or constructive trust, and we know that in practical terms the trust mechanism is one which has a very real impact and operation in scenarios just like this.

Making targeted changes to affected exemptions and the primary production and principal place of residence exemptions to clarify that an owner of land does not include a beneficiary of an implied or constructive trust is also a means by which we can restore the original policy of assessing land tax by reference to the legal owner of land rather than the beneficial owner of land.

Members interjecting.

Ms SHING: It is unfortunate that those opposite are not in fact listening to this debate after having put their own views on the record. For those who are so concerned with economic responsibility and with making sure that taxpayers money is spent in an appropriate way to deliver and provide benefit to all Victorians, their refusal to actually engage in any respectful way in this debate speaks volumes to the fact that their opposition to clause 8 in particular—

Members interjecting.

The ACTING PRESIDENT (Mr Melhem): Order! Mr Ondarchie and Mr Finn, if you want to have a chat, you might have to go outside and have your chat there.

Ms SHING: I am so sorry, Mr Ondarchie and Mr Finn, to interrupt your conversation. As I said, you would have thought that responsible economic management was something that would make the Liberal Party sit up and prick up their ears, but no such luck. All we see is that this is an opportunity for them to provide an amendment to clause 8, which is an opportunistic effort to seek to undermine the imprimatur which both the shadow Treasurer and Mr Rich-Phillips have acknowledged expressly on the record, and it is indeed an effort to undermine the work that is going on to provide certainty and consistency and the best administration of taxation and regulations that underpin it. So we oppose the amendment proposed by Mr Rich-Phillips and the opposition in this regard but otherwise wish the bill a speedy passage and consideration in the committee stage.

 Dr CUMMING (Western Metropolitan) (11:17): I rise today to speak on the State Taxation Acts Further Amendment Bill 2019. I rise with grave concerns. It is great to see that the government want to actually amend this legislation, but I feel that what they should be amending is their rate of land tax. For 10 years they have not changed the actual rate, and I have raised this concern previously because I have elderly residents and pensioners who are directly affected by the current land taxes and how they affect them. It is a sad situation when as a pensioner you have worked all your life, have become asset rich and income poor and rely on a certain amount of rental income but because of circumstances out of your control your property is actually valued quite highly and therefore you are going to be slogged anything around $10 000 a year in land tax. Now, for such properties, yes, the land value is great, and they may be in Yarraville, but the actual properties are falling down and are single-fronted Victorian houses.

An elderly person might not have been able to maintain the paint or anything on a property for probably 20-odd years, and they keep the rent cheap so that somebody can afford it. Some students might be in there, trying to afford it and happy to deal with an unrenovated single-fronted Victorian house in Yarraville. But due to the land tax owners have no choice but to actually add on an additional $200 a week just to pay for it. Then they have to pay the rates, which is another $100. So before you even occupy the property, you are paying $300 in council rates and land tax. Therefore whatever you add on top is considered your pension or the hard-earned return on all your years of paying the property off hoping that that was going to be your retirement and pension fund.

These are people who do not want to be on a pension. They want to be self-funded retirees, and these are people who, way back then, did not have super. They were told, and they thought, that having additional properties was going to be their pension fund, but now they are going to be hit by this land tax. Why I say they are going to be hit by this land tax is, respectfully, because the government is only looking at the 16 inner-Melbourne councils. They are not looking at the 79 councils across Victoria. This tax only applies to the 16 inner-Melbourne councils. Who are those 16 inner-Melbourne councils? They include mine in the west. Yes, they are desirable areas, but the land tax has not actually had the desired effect it was supposed to, which was to help with the homeless situation or to see property turnover. We still have this issue of land banking.

What the tax is also not going to address are problems in my particular area. I have very large parcels of land in West Footscray that may have previously been petrol stations. They are absolutely ripe for residential development, but this land tax will not touch the parcels of land in that area that have been sitting there vacant for 20 years. It will not incentivise the property owners to actually make apartments. Owners are also going to be slogged double-time now because there are additional council rates for parcels of land that are vacant. So you have a council rate with which you will be slogged due to your land being vacant, and now you are going to have a state land tax on top because your property is vacant. If we feel that this is going to somehow incentivise people to actually build something, I struggle to see the sense and rationale of that.

Yes, let us slog the 16 inner-Melbourne councils, let us forget about everybody else and let us especially forget about those people who have holiday homes. I love this! Holiday homes are exempt. Thank you, everybody! Congratulations! If we are looking after the homeless, why are we not taxing people right across the board? What I have heard numerous times is that we are trying to encourage people to live in country Victoria, are we not, and to actually get into those vacant properties that are across the whole of country Victoria, of which we have many—yes? So where is the incentive in this bill? I do not see any incentive in this bill.

All I see is that we are going to impose on the 16 inner-city councils an additional land tax when properties are empty for a certain period of time, which in essence would make sense if that was actually going to help our homeless situation, but I do not see how it will. We cannot, especially if we are taxing them additionally, because like I said just earlier, once you have this larger tax those property owners are going to take that money and put it onto those renters, and therefore virtually the people who own those properties are only tax collectors for the state and tax collectors for their local council, and those ongoing costs are actually put onto the burden of those residential properties. That is where you get the increase in rent, and therefore there is no incentive to have those properties continually being occupied. That is why you see vacant properties currently.

For them to look at the current data, what is actually occurring is the State Revenue Office have been using data on water and energy bills. They are looking at your water bill, and if you are 50 litres or less, they are saying that that property must be empty. They are also looking at electricity bills and saying, ‘The usage there is quite low so this property must be vacant’. Respectfully, there are a lot of people out there that are doing the right thing or have very low bills. They have low bills for many reasons, one being that they are hopefully trying to get off the grid in the way of having their own water supply or having tanks. There are also people out there, as I was saying about pensioners earlier, who keep their energy bills super low. A lot of those properties, especially in my area, do not have electricity and gas connected due to those people not being able to afford it, because they are actually collecting their money just to pay their rates and their land tax and just to pay for food.

I am not a supporter of an additional tax that is only looking at the 16-member councils. But also, it is an amendment that does not take into consideration that there have been 10 years of the same rates. There has not been any shift in how our land tax is actually gathered. We need to look at how the property prices have increased, and we also have to look at people’s personal circumstances when we tax people. These are additional taxes. We have to look at people’s personal circumstances, because otherwise we are taxing people who are asset rich and income poor, and ‘income poor’ could apply to people who have just lost their job. These are hardworking people who have just lost their job or have fallen ill. They will struggle forever and a day to get on top of their tax bills, because they have no means to pay them. We are virtually making people homeless due to their not being able to pay taxes, which is a sad state of affairs.

 Mr FINN (Western Metropolitan) (11:28): I rise to speak on the State Taxation Acts Further Amendment Bill 2019. I take on board the comments by Ms Shing, the minister without portfolio over there, who made some observations about members on this side of the house whilst she was pontificating on matters that lost most of us, I have to say, and there were varying attitudes between the two speakers we have had from the government to this point.

Mr Gepp was very clear, was very succinct and was very much to the point. He likes tax. In fact he does not like tax; he loves tax. As a Labor man you would expect him to love tax. He spoke for 15 minutes about his love for tax, and he cannot think of anyone or anything that should not be taxed more. That is something that, as I say, you would expect from a Labor man, and Mr Gepp is a true Labor man.

Then we heard from Ms Shing. I am not exactly sure if Ms Shing’s heart was in it. She did not sort of show any great enthusiasm for this legislation. She did not show any great enthusiasm for the government. She did not show any great enthusiasm for the direction that the government might be taking us in. In fact the last time I saw such a pathetic performance was Greater Western Sydney at the MCG on grand final day. I think they might have actually put in a better performance on the day than Ms Shing did. At least they started well. The same thing cannot be said of her. That is rather sad. I think probably Ms Shing is looking forward to the end of the year. She has had another disappointing one, and I can understand that she wants a Bex and a lie-down. That is fully understandable.

I go back to election night in 2014. I made a prediction that night. I was really hoping that I would be wrong, but unfortunately, like in so many things, I was right. I said on the night of the election in 2014 when the Andrews government was elected, ‘You watch. Give this mob a few years and we’ll be longing for the days of the Cain-Kirner governments. This Andrews mob will make us all yearn for the days of the Cain-Kirner governments. They will be the good old days’. And sure enough, here we have it. As was said a number of times during the federal campaign, ‘When Labor runs out of money, it comes after yours’. That is what this legislation is about: it is about coming after people’s money. Let us make it very clear: taxation is not government money; it is taxpayers money. That is the big difference between this side of the house and the other side of house: we know that, we accept that, we respect that. But the other side—Labor and the Greens and some of our friends on the crossbench—regard taxation as their money. But they have no automatic right to that money. In fact they should not be taking as much as they are.

We on this side of the house know and respect that taxpayers work very hard for their money, and the government have an obligation to respect the fact that it is their money. In fact in the times when we were in government, when I had the opportunity to open whatever community facility in the west that I had been asked to by the minister of the day, I always began my comments by acknowledging the owner of the money that went to build the facility, and that of course was the taxpayer. We on this side of the house have total respect for those who earn money and are forced to pay tax. Fundamentally we believe that taxation should be much lower than it is. In fact it should be as low as we can possibly get it—not so much Mr Gepp and not so much the Labor Party, who are very keen on taking every cent they can possibly get. They are very keen on doing that.

This is a typical Labor government. We have heard both the Treasurer and the Premier say that they have delivered good Labor budgets. Yes, they have. ‘Good’ and ‘Labor’ I am not actually sure are two words that should be used in the same sentence. But they are indeed solid Labor budgets because they tax and spend. The more they spend, the more they tax. They do not particularly care what they spend it on, and they do not particularly care how much they spend, as long as they spend. That is their definition of activity. That is their definition of being a good government: spending other people’s money. That is what they are on about. We have seen this time and time again, and we are seeing it again. They have no understanding of what is value for money, no understanding at all.

We are seeing this at the moment, as Mr Ondarchie pointed out, in quite a number of blowouts on projects right across the board. You just have to have a look at some of the railway crossing removal projects that are going on at the moment out in the western suburbs. I have raised this in the house a couple of times now, and I anticipate that I will probably raise it again: the prospect of three railway crossings being removed in Werribee at a cost of close to $2 billion that will cause an enormous amount of pain for motorists permanently. You could spend that sort of money to cause pain only in a Labor government.

The local people have put forward a proposal which would allow, for the same amount of money, a tunnel to be built which would remove not just the railway crossings but also the traffic difficulties that the current proposal put forward by the government would cause. I will bet London to a brick that the minister, Jacinta Allan, will tell them to get stuffed, because that is what she does. When people come to her with a proposal which actually makes sense, when community people come to her and say, ‘We have got a better idea than the one that you’re proposing’, she says, ‘Get stuffed’. That is her attitude. This is Labor’s attitude to consultation on these sorts of things.

I wish the people of Wyndham well. I know the Wyndham Infrastructure Network has done a power of work coming up with a proposal which will actually work for the local community and will provide a much better end product for the local community than is being proposed by the government. I will, as I have so far to this point, assist them in pushing that agenda. I think it is a very worthwhile agenda. But you will not see much joy, I suspect, from the government, which is extremely set in its ways in that this is the way they are going to do it and they do not particularly care who suggests or wants to do anything else.

This piece of legislation is before the house today because earlier this year, and perhaps late last year, this government made a decision—in fact it made a number of decisions. It made spending decisions based on the election of a Shorten government. It made decisions that it would spend up big, that it would throw billions of dollars at everyone and everybody, because Bill Shorten was going to be the Prime Minister and he would bail Victoria out. He was going to be the Prime Minister, and he was going to bail Victoria out.

Well, guess what, it did not quite work out as well as they would have liked, it has to be said. On 18 May this year the suggested collapse in the Victorian coalition vote did not eventuate. In fact in Queensland the coalition vote went through the roof. As a result of that Scott Morrison was re-elected as Prime Minister and poor Mr Shorten is now in a sort of semiretirement, really, I think. Although, it has to be said, I understand he is sitting, waiting for Mr Albanese just to look the other way briefly and will be plunging the knife into his shoulderblades in the time-honoured tradition of the ALP. If I was Albo, I would not be looking into the distance too much, because there is a bloke behind him with a very sharp knife. That is something that should be kept in mind. We have a situation where this government made decisions on spending based on something that had not actually happened and in the end did not happen.

It is like me going down to a car dealership this afternoon and buying a brand spanking new Mercedes, one of those C-class ones. You know, the big ones.

A member interjected.

Mr FINN: I am not sure—I am not going to give anyone a plug—but one of those nice, big, brand spanking new Mercedes. I would buy that, and then I would go into a real estate agent and I would buy a beachside mansion like the one that Al Gore has got. I would buy that. Then I would go to a travel agent and I would buy a first-class round-the-world ticket. I would look at the bill and I would say, ‘I today have spent $4 million, but I don’t have to worry about that because I’m going to win Tattslotto on Saturday night. I don’t have to worry about that’. This is the way this government thinks. Can you believe that? ‘We can spend whatever we like because we’re going to win the federal election and Bill Shorten is going to bail us out’. Well, what a brilliant thought process we have from the government in this state. As we saw, the people of Victoria and the people of Australia knew better, and that is a particularly good thing.

But unfortunately we now have the situation where the state is more than $62 billion in debt. We have seen the state’s credit card blow out by, I think, close to 27 per cent in the last 12 months. This government has gone ahead and spent the money, but it did not win Tattslotto. It did not even get three numbers. It did not even get the supplementary. So here we are, as Victorian taxpayers, stuck with the bill. We are stuck with the bill, and here we have a piece of legislation which is going to slap us around the ears, is going to pick us up, is going to shake us upside down until all the money falls out of our pockets and Mr Pallas can come around and collect it. That is what this legislation is about today.

The fact of the matter is that this government, being a good Labor government, has no respect for the taxpayer. Like Mr Gepp, it regards the taxpayer as nothing more than a revenue stream for itself. They say about the taxpayer, ‘Just give us your money. We don’t care about anything else’. We have got to the stage now, as we had with previous Labor governments, where the money has run out, the bills need to be paid, and who is going to foot the bill? The poor old taxpayer yet again. Each and every taxpayer in this state will be slugged again and again and again. This is just the first piece of legislation; there will be others. As Mr Rich-Phillips and Mr Ondarchie said, God help us come budget time next year. This is a very, very sad piece of legislation, but this is a very, very sad government, and it means that Victorians are very, very sad people as a result.

 Mr MEDDICK (Western Victoria) (11:43): I rise to speak to the State Taxation Acts Further Amendment Bill 2019, and I will make just a few points. The most recent news about the racing industry is that they systematically slaughter horses for pet food. The government has failed to take action to stop this. Instead, today we see a bill that in part makes amendments to the calculation of the Victorian Racing Industry Fund to further benefit the industry. This year’s budget delivers a total of 102.4 million taxpayer dollars over four years to the racing industry through the Victorian Racing Industry Fund. I have to ask the question: why are we continuing to subsidise an industry that is rapidly losing community support?

This bill also amends the Land Tax Act 2005 to clarify the operation of the vacant residential land tax. When this bill was being proposed the government was advised that, while well-intentioned, the tax they proposed was more complex, with more exemptions and conditions than a more generally applied land tax would be. It is no surprise that the collection of this tax has been beset with difficulties and legal loopholes. I support the move here to close some of those loopholes but wonder why the government does not do more to end exemptions and make the law simpler, fairer and more generally applicable. Why does it apply to some professions and not to others? Why does it not apply to commercial land left vacant for years? Indeed why is the government fiddling around the edges of the taxation system when large and systemic changes are required to improve productivity, equity and the financial and environmental sustainability of our state? I will be supporting this bill today for the good that it does; however, these questions do need to be considered in future taxation decisions.

 Ms BATH (Eastern Victoria) (11:45): I would like to say a few words on the State Taxation Acts Further Amendment Bill 2019, and the first words that I will say is something that the Premier said back before he was Premier, and he said it to Peter Mitchell: ‘I make that promise, Peter, to every single Victorian’. We know that that was in relation to a ‘Will you put the taxes up, Premier?’ question from the media. He made that promise, and he has broken that promise on multiple occasions. In fact I will lead the house through the multiple times he has broken that promise. His Treasurer has been a willing partner. We have seen new taxation in terms of city taxes for the West Gate Tunnel. We have seen a tripling of the coal royalties tax and the mayhem that has created in the Latrobe Valley and in particular in Hazelwood. The government will say, ‘No, no, no, that’s not our fault’. Well, if you push someone to the end of a gangplank and you wiggle the gangplank, they will fall over, and that is what Engie in Hazelwood has done.

In terms of other taxes, we have seen the introduction of the Uber and taxi fare taxes and an increase in stamp duty on new cars. We have also seen an increase in stamp duty on off-the-plan purchases; a new so-called vacant land tax, and I know Mr Rich-Phillips has mentioned that before; a new property annual valuation land tax; new stamp duty taxes on properties for spouses; new point-of-consumption gambling taxes; new land surcharge taxes which have subsequently tripled in value for the absentee owners; new stamp duty surcharges on foreign purchases; and an increase in the fire services property levy.

What many, many of my CFA volunteers and farm and family household owners ask is, ‘When are we going to get some proper and direct funding to the brigades and the services that are so desperately needed in country Victoria?’. There has been the growth areas infrastructure contribution levy, a $140 million increase in property transfer fees and also now the gold royalty tax that I am going to speak to in a minute.

Under Daniel Andrews, we have new taxes which also include a $12.5 billion property tax slug to pay for an unfunded rail loop promise. At the time when Labor announced this $50 million-plus Suburban Rail Loop, it was unfunded. I believe the Treasurer said something along the lines of ‘Value-capture opportunities will be required’. Does that not sound nice and hunky-dory? That means: ‘We’re going to slug you with another tax’.

Back in this year’s May budget the Treasurer also increased the duty on luxury cars costing upwards of $100 000. Some would say, ‘Well, if they can afford to buy that car, let’s slug them for it’. I know many, many rural and regional people, many farmers, who have actually spent their lives working very hard on the land, who scrimp and save, who put all their money back into machinery, into improving the quality of their herd, but have got that dream of taking that car eventually, when they are at retirement age, and going around Australia and being one of those grey nomads. Well, those people that have scrimped and saved, that have provided tax to this government and to previous governments for decades, now have an extra tax on top of their LandCruiser, for example. When the Treasurer was asked about this and was told, ‘They’ve been saving up for 20 years for this’, he said to them, ‘Get a life’. What seems like a joke to the government and indeed our Treasurer may not be taken so lightly in country Victoria. It means some penalties there for our rural and regional communities.

One example I would like to highlight and spend a bit of time on today is the gold mining royalty or tax. This was introduced at a rate of 2.75 per cent in this year’s budget. The gold industry is a very important and profit-raising but community-valued industry across regional Victoria. This tax has done little but threaten those jobs and put downward pressure on investment opportunities for companies seeking to increase and expand their exploration. Mining across the state employs almost 12 000 Victorians and supports 88 000 extra jobs in terms of that supply chain of medium-sized and small businesses in mining equipment, technology and services. We know that it is often those down-the-supply-chain businesses that really also contribute to our taxes and investment in our communities and towns. It provides a strong economic return to the state in relation to mining licences, which cover only 0.2 per cent of our land size.

Minerals and metals support around 4 per cent of Victoria’s gross state product, GSP, with a combined economic contribution to Victoria’s economy of at least $13 billion. Ballarat, Stawell and Fosterville communities certainly benefit from the investment that companies make in terms of our goldmines. Fosterville is a really great story insofar as they have reinvested half a billion dollars of investment into those mining operations in order to find and access that mother lode that they have. The companies and the population of Bendigo and surrounds are really feeling the positivity of that investment. The Ballarat goldmine is another example of a regional employer and has roughly 220 employees and contractors. Local mining companies have been just so blindsided by this government’s move, as has the Minerals Council of Australia.

It was fortuitous that this bill was coming up, because the Nationals ended up having breakfast with the minerals council this morning to get a bit of a run-down as to how they see the kaleidoscope of what this is going to create in terms of their representatives and their businesses. James Sorahan, the new Victorian director, has said:

The Andrews Government has not consulted or listened to regional communities that rely on highly paid, high skilled jobs that mining delivers in Victoria.

One of the key facts about the mining industry is that without a doubt it can often happen underground, in terms of goldmines. But it is a really good contributor in terms of the wages that it pays back. It is 65 per cent higher than the average pay in that sector in terms of investment back into wages. There is also a very young market, but they are not capturing just young people. They are prepared to take people who have had experience in other ways in this industry and have had other life experiences. So it is very open, with a broad and diverse range of people that can get involved and become part of the mining industry.

The Minerals Council of Australia also looked into and assessed, I guess, the ranking of Victoria in terms of what Victoria is doing in investment. The Fraser Institute, in its investment attractiveness index in its annual survey of mining companies, ranked Victoria 43rd out of 83 jurisdictions across the world. So how interested are people going to be in Victoria when we are ranked only 43rd out of 83 jurisdictions?

The reality is that this tax will become a disincentive for other external, overseas investment companies or indeed smaller companies within Australia. What happens with these sorts of taxes is that for a company that may be operating currently in the state, part of the way of continuing to explore and sustain that investment and the livelihood of that company is to create exploration opportunities. In any business, when you are being hit with a tax, you ask, ‘How can I continue to survive in this industry?’. It is often by withdrawing those non-essential services or non-essential activities. So this could actually mean a reduction in exploration, when we need in this state a continuation of and support for those companies that will explore, find and develop new lodes.

The other point I would like to make is that when the Treasurer talked at the Melbourne Press Club about this gold tax and he was asked why he had imposed a new gold tax, he said simply, ‘Because I could’. The frustration that the minerals council and others are talking about is that there was no proper consultation. To that point, the minerals council have gone to a key fact about the lack of consultation but also to how this royalty or tax is flawed. I will quote the document that they provided to me this morning. It is flawed because:

Victoria would have a higher gold royalty than Western Australia—the biggest gold mining state

… it does not reflect the varied risk profiles … underground operations of Victoria’s mines—

or the unique need for ongoing exploration to sustain goldmines, the point I just raised. Also, the lack of transitional arrangements for start-up mines ‘amounts to a retrospective tax damaging Victoria’s reputation as an investment destination’, and:

Revenue raised … is not devoted to the regions …despite effectively being a tax on the regions.

One thing that WA have certainly got right in past years is that they had a royalties to regions tax, so the money that was made in the regions was used to develop infrastructure, including homes, towns and schools—important value-adds to our regions in WA.

This tax is going to be taken by the Treasurer and by this government, and shoved straight back into Melbourne to fund all these activities happening in Melbourne. And certainly we know that this government’s track record on infrastructure investment in this year’s budget alone is shocking in terms of rural and regional investment, particularly in the transport sector where we take up 25 per cent of the population but we have got 4 per cent of that investment in terms of infrastructure upgrades et cetera.

I find the one most consistent thing about this government is that they consistently do not consult. They have not consulted with the CFA in terms of the bill that was diabolically passed earlier this year. They have not consulted with the primary care partnerships, our primary care networks and the like. They have not consulted with Minerals Australia. And yet only yesterday we had Jaclyn Symes, the Minister for Resources, trumpeting how great their work is in terms of gold and gold investment. Well, I would like to see her actually communicate prior to introducing legislation.

In relation to this bill, I would just like to communicate that I certainly support Mr Rich-Phillips’s opposition to clause 8. I think it is eminently sensible of Mr Rich-Phillips, as usual. The Liberals, and The Nationals in particular, will be opposing this bill.

Business interrupted pursuant to sessional orders.

The PRESIDENT: Now is the time for questions without notice and ministers statements, but before I call for the first question I wish to welcome in the gallery a delegation from the Nauru Parliament, which is led by the Speaker, the Honourable Marcus Stephen. Welcome.