12 March 1991 - Current
STATE TAXATION LEGISLATION AMENDMENT BILL 2014
6 February 2014
|ASSEMBLY||Statement of Compatibility||O'BRIEN|
STATE TAXATION LEGISLATION AMENDMENT BILL 2014 Statement of compatibility Mr O'BRIEN (Treasurer) tabled following statement in accordance with Charter of Human Rights and Responsibilities Act 2006: In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006 (charter act), I make this statement of compatibility with respect to the State Taxation Legislation Amendment Bill 2014. In my opinion, the State Taxation Legislation Amendment Bill 2014, as introduced to the Legislative Assembly, is compatible with the human rights protected by the charter act. I base my opinion on the reasons outlined in this statement. Overview of bill The purpose of this bill is to amend the: Congestion Levy Act 2005 to expand the congestion levy boundary at a concessional rate from 1 January 2015; Gambling Regulation Act 2003 to increase the two top tax brackets for hotel and club venue operators by 4.2 percentage points and reduce the minimum return-to-player ratio from 87 per cent to 85 per cent from 1 April 2014; Fire Services Property Levy Act 2012 (FSPL act) to reallocate, from the 2014-15 financial year, the land use classification assigned to residential investment flats, short-term holiday accommodation, water catchments, dams and reservoirs, industrial and commercial zoned land with derelict buildings and land that is used for outdoor sport; and the FSPL act and Valuation of Land Act 1960 to make minor technical amendments, including aligning the eligibility requirements for the FSPL concession with the concession available for council rates. Human rights issues 1. Human rights protected by the charter that are relevant to the bill This bill engages the following human rights protected under the charter act: Recognition and equality before the law Section 8(3) of the charter act provides that every person is equal before the law and is entitled to equal protection of the law without discrimination within the meaning of the Equal Opportunity Act 2010 on the basis of an attribute set out in section 6 of that act. Clause 20 amends section 29 of the FSPL act to extend the availability of the fire services property levy concession to a person who holds a residence right in a retirement village. To hold a residence right in a retirement village a person must have attained the age of 55 or retired from full-time employment or be the spouse of such a person. Accordingly clause 20 may impact on the right to equality and discrimination under the charter to the extent that it provides a fire services property levy concession based on age, which is a protected attribute under the Equal Opportunity Act 2010. Section 8(4) of the charter act provides that measures taken for the purpose of assisting or advancing persons disadvantaged because of discrimination do not constitute discrimination. This amendment is specifically targeted at assisting senior Victorians, with fixed or low incomes, to meet cost of living expenses. Therefore, it is considered that this amendment falls within the exception in section 8(4) and does not limit the right to equality and discrimination under the charter.
Conclusion I consider that the bill is compatible with the charter act. Hon. Michael O'Brien, MP Treasurer
STATE TAXATION LEGISLATION AMENDMENT BILL 2014
Mr O'BRIEN (Treasurer) -- I move: That this bill be now read a second time. Speech as follows incorporated into Hansard in accordance with resolution of house: The State Taxation Legislation Amendment Bill 2014 makes amendments to the Congestion Levy Act 2005, Gambling Regulation Act 2003, Fire Services Property Levy Act 2012 (FSPL act), and Valuation of Land Act 1960 (VL act). The Victorian coalition government is continuing to take the responsible steps needed to manage Victoria's finances and deliver record investment in infrastructure and services for Victorians. The 2013-14 budget update continued this government's record of strong financial management. This bill implements key measures announced in the 2013-14 budget update to redraw inner Melbourne's congestion levy boundary and adjust electronic gaming machine taxes to ensure the appropriate return to the community from gaming activity. These measures are critical to maintaining the state's strong economic position, and set Victoria up for continued investment in schools, hospitals, public transport and roads to benefit all Victorians. The current congestion levy boundary will be expanded to include areas contiguous to the existing inner Melbourne boundary. The new areas will be levied at a new concessional rate of $950 per car space from 1 January 2015, which is the equivalent of less than $2.70 per car space per day.
The levy will continue to be applied only to owners of non-residential, off-street car parking spaces. All existing exemptions will apply in the expansion area so that the levy will not be payable on visitor parking, disabled parking, hospital visitor parking, loading bays and residential parking. New exemptions will also be introduced for parking at the Melbourne Zoo and for temporary public parking at Yarra Park and Melbourne and Olympic parks in the heart of Melbourne's sports precinct. Expanding the boundary recognises the impact of congestion in the areas surrounding the inner Melbourne area, and addresses the unfair commercial advantage gained by operators located close to, but just outside, the current boundary. In line with the government's commitment to responsible economic management and building infrastructure to meet the needs of Victoria's growing population, revenue from the levy will be used to support public transport and road infrastructure initiatives which are vital to our state. In the 2013-14 budget update, the government also announced changes to gaming machine tax rates. This announcement is consistent with the arrangements outlined in the lead-up to the sale of gaming machine entitlements concerning the intended share of revenue from gaming between venues and the state. In the material provided to the industry ahead of the auction of entitlements, the then government advised that the new tax structure was designed to collect a share of gaming machine revenue broadly similar to that raised under the previous gaming operator licences. The historical average government share was between 36 and 38 per cent. The industry was also advised that tax rates would be regularly reviewed to ensure the government received a broadly similar share of gaming machine revenue to the historical average. Since the new entitlements and tax rates commenced in August 2012, it has become clear that the tax rates legislated by the former Labor government have failed to recover a broadly similar share of revenue as under the previous arrangements. The tax rates set by the former government were too low to recover the share of gaming revenue that had been intended for the state. As a consequence, the government's share of gaming machine revenue fell to 34 per cent in 2012-13 and was not expected to exceed 35 per cent in the foreseeable future; considerably less than the intended 36 to 38 per cent range. To address this failure, the government is undertaking corrective action to restore its share of gaming machine revenue by adjusting the top two tax rates. The bottom tax rate will remain unchanged and the top two hotel and club tax rates will be increased by 4.2 percentage points as follows: for hotel venue operators, the rates increase from 50.83 per cent and 58.33 per cent to 55.03 per cent and 62.53 per cent respectively; and for club venue operators, the rates increase from 42.5 per cent and 50 per cent to 46.7 per cent and 54.2 per cent respectively. As there is no change to the lowest tax rate for club and hotel venue operators, this means that club venue operators with machines returning a monthly average per-EGM revenue of $2666 or less will continue to pay no gaming taxes on their earnings, while hotel venue operators in that position will pay a concessional rate of just 8.33 per cent. In addition, the government is adjusting the legislated minimum return-to-player ratio that applies to hotels and clubs from 87 per cent to 85 per cent. This will bring the return-to-player ratio in Victoria in line with New South Wales and Queensland. It is noted that many venues have chosen to operate a return to player that is considerably in excess of the legislated minimum and it is open to venue operators to continue to do so. It is also noted that these tax changes do not recoup any of the more than $3 billion the Auditor-General found the former government had failed to realise on the sale of lucrative 10-year gaming licences valued at over $4 billion for which the former government received less than $1 billion. The gaming machine tax changes and adjustment to the minimum return-to-player ratio are being legislated to commence from 1 April 2014. They are essential to ensuring that gaming venues contribute the share of tax that was intended at the time of the industry restructure and that Victoria's schools, hospitals and essential infrastructure continue to be securely funded. The strong economic management of this government has enabled the most significant state tax reform in decades with the introduction of the fire services property levy. As a result Victoria now has a fairer fire services funding system which ensures all property owners contribute to the fire services, not just those who adequately insure their properties and contents. The government has also invested $21 million in concessions, which means that for the first time over 400 000 eligible pensioners and veterans receive a $50 discount on the levy for their principal place of residence. This reform is also a direct recommendation of the Victorian bushfires royal commission. Crucially, these reforms have assisted to put Victoria's fire services on a more secure financial footing. This is reflected in the significant increases to the operational budgets of the Country Fire Authority and the Metropolitan Fire Brigade under the coalition government. This bill makes amendments to the FSPL act and VL act, to further promote the key objectives of the fire services property levy and streamline the administration of the levy for local councils. As the use of fire services can differ across properties, differential fire services property levy rates apply to different property types. This bill will improve the practical application of the levy for Victorians by reallocating certain properties to different land use classifications. Most notably this bill will reallocate residential investment flats from the commercial to the residential land use classification. While it is appropriate commercial rates apply to
properties that generate an income, or are an investment, this amendment will mean that, from the 2014-15 levy year, these residential investment properties are treated in the same way as other residential properties which currently fall into the residential land classification -- whether owner occupied or rented. This bill will also reallocate dams, reservoirs, water catchments, and outdoor sporting grounds to the public benefit classification, and commercial and industrial land with buildings that add no value to the vacant land classification. These classifications will better reflect the practical application of this land. These amendments demonstrate that the government is delivering on its commitment to the fair and equitable operation of the fire services property levy. The coalition government acknowledges the important role that local government has played in implementing and administering the fire services property levy. This bill will also make a number of minor technical amendments to the FSPL act and VL act, which will further streamline the administration of the levy and ensure the FSPL is supported by a dynamic and responsive valuation system. A number of the amendments are intended to make it easier for local councils to administer the levy by ensuring that the administrative framework for rates and the fire services property levy are aligned. This includes amendments to allow the apportionment of the fire services property levy in the same circumstances that rates can be apportioned, and technically aligning the eligibility requirements for the fire services property levy and municipal rates concessions. This bill will also make it easier for councils to apply the fire services property levy by allowing the councils to apply the lower Metropolitan Fire Brigade (MFB) rate where a parcel of land extends across the MFB and Country Fire Authority border. This bill will also amend the VL act so that Victoria's valuation system can better support the administration of the fire services property levy. This includes amendments which provide the valuer-general Victoria with authority to amend the Victorian best practice specifications guidelines during the biennial valuation period. These guidelines are prepared by the valuer-general to assist councils to prepare valuations. This amendment will allow the valuer-general to review the guidelines more regularly so that areas of uncertainty can be addressed during the valuation cycle, helping to maintain the quality of valuations and property databases, which are used to assess the fire services property levy. This bill will also make amendments to ensure that supplementary valuations and adjustments can be made where a change of occupancy affects the use of the land, or the initial valuation incorrectly identified the use of the land. These amendments will ensure that the amount of fire services property levy collected is based on the current use of the land, and the integrity of valuations and property databases can be maintained. Other amendments to the FSPL act and VL act made by this bill include minor technical improvements which were identified during implementation of the levy. These amendments will improve the quality of the legislation and provide greater clarity and certainty for local councils in administering the fire services property levy. I commend the bill to the house. Debate adjourned on motion of Ms GREEN (Yan Yean). Debate adjourned until Thursday, 20 February.