Hansard debates

Mrs McARTHUR (Western Victoria) (14:04): I rise to speak on the State Taxation Acts Amendment Bill 2020. In many ways it is not a very exciting bill. It is certainly not the budget, but rather it includes many of the technical changes which make the budget possible. Yet in many ways the bill is actually very revealing of the Premier and how he and his ministers operate. The true measure of this government is not the eye-catching initiatives which the budget details, the lists of sugar-hit, media statement-friendly giveaways generations of Victorians will come to pay for. It is revealed instead in the day-to-day operations, the run-of-the-mill bills like this, how they are introduced and what they contain.

What can we see here? The first thing evident is the lack of respect for Parliament ministers displayed in the hurried introduction of this bill to the Assembly in the last sitting week and the confusion surrounding its timetabling. These are technical amendments once again rushed through without allowing proper time for consultation with accountancy and taxation professionals, the few people who actually understand what they mean. A bill briefing on the morning of a bill’s second-reading debate in Parliament, as occurred in the Assembly in the last sitting week, is simply not good enough. Once again this government has shown that it does not believe that mechanics matter, the nuts and bolts of a parliamentary system which have served our state and much of the democratic world so well for generations.

The next thing this bill reveals is the taxing instinct. When there is money to be extracted the consequences are rarely fully examined, particularly for regional communities. The legislation here amends the Environment Protection Act 1970 to increase metropolitan municipal and industrial landfill levies to $125.90 per tonne by 2022–23, with proportionate increases in the rural municipal and industrial landfill levy rates. This is a huge increase—more than $600 million over the forward estimates period—and it will cause huge financial stress, particularly for rural local councils which cannot so easily redirect existing landfill. At least in this instance it is Parliament amending the Environment Protection Act, not just a change on ministerial whim as the people of Bacchus Marsh discovered to their cost with the government’s watering down of that act’s protections in the interests of ramming through the dumping of toxic soil from the West Gate Tunnel project.

The next tax evident here reveals another instinct. When it senses money, this government simply cannot resist going back to the well and extracting more. The reforms to land tax are yet another instance of this. At every budget the rules are changed in the quest to extract more. This time it seems they seek to make parents and their children liable for land tax if grandparents living in a granny flat on the property are paying any form of rent. It is not just that this is an attack on thousands of families; it is the complexity and therefore potential injustice it introduces.

For tax codes to be fair they must be clear and make the exploitation of ambiguity as hard as possible. This provision does the opposite. Apparently expenses paid by grandparents in the scenario I outlined will not count as rent and therefore will not cause tax to be payable. But where is the distinction between expenses and rent? By their nature arrangements like this are informal ones. It is simply unenforceable. And in cases where it is enforced it will be unfair. Why should some families pay when others are so easily able to avoid the tax through the ambiguity this bill encourages? Furthermore, how will families even know this change has occurred? Will there really be a mass advertising campaign to announce the change? If there is, it will likely outweigh the revenue raised, yet another sound bite policy totally divorced from reality. In its enthusiasm to tax, tax, tax and tax again the government is introducing a new tax which not only reaches into the heart of family life but which creates an ambiguity damaging to enforceability and likely to produce unfairness. I am therefore pleased to support opposition amendments opposing both the landfill levy and this new attempt to modify the land tax principal private residence exemption.

The next tax grab is perhaps the most revealing and demonstrates the government’s tendency to overreach and its carelessness in so doing. The bill increases livestock duty collected from the sale of sheep, goats and their carcasses hugely from 12 cents per head to 35 cents per head. The absolute number may seem low, but that is a tripling of the rate. In their desire to raise even more money from hardworking agricultural producers, did the government stop for a moment to consider whether they were entitled to that money? I do not mean morally; that is a different question. I mean constitutionally. As those who have read this week’s Scrutiny of Acts and Regulations Committee digest closely will know, there is a serious question as to the legality of this clause. Clause 13 substituting section 245 of the existing Duties Act 2000 appears not to address the rather serious implications of section 90 of the commonwealth of Australia constitution. This increase looks a lot like an excise within the meaning of section 90 and, as such, would clearly constitute the increase in a duty, which can be imposed only by the federal Parliament. It would therefore ‘deprive owners of sheep and goats of their property in the duty payable “otherwise than in accordance with law”’. I look forward to the minister’s reply on this one.

In conclusion, then, this dry and technical bill actually reveals much about this government if it is looked into carefully. Once again, its haste and lack of consultation display complacency about the system and arrogance. This is a bill which shows their taxing instincts as well as their desire to overreach and their incompetence, and their desire to say things that sound good rather than making enforceable public policy.

And finally, I wish to observe what the bill fails to include—that is, any real attempt at structural tax reform such as that we now see in New South Wales. I cannot overstress how big a failing that is. There is no attempt to improve the competitiveness of our economy, just more and more layers of expense for individuals and businesses. What we have heard is just tinkering around the sides. To take an example, we have heard from Ms Terpstra about the changes in concessions on stamp duty in regional Victoria. Let us just look at that. Labor members and media releases are frequently cited, but if you look at the figures for forward estimates, they show forgone revenue is $39.7 million over a four-year period. So across the entirety of regional Victoria, this tax reduction will save less than $10 million per year. In a budget which raises $66 billion and spends an awful lot more, that is little more than window dressing. It is a long way from the game-changing opportunities missed to cut payroll tax or to properly investigate local rates, stamp duty and sales taxes. In what it does and in what it fails to do, the State Taxation Acts Amendment Bill 2020 is classic Labor.