State Taxation Acts Amendment Bill 2019 Second Reading

29 May 2019

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 I rise to speak on the State Taxation Acts Amendment Bill 2019. I thought I would say a few words on this bill, given that I am acting in the Greens Treasury spokesperson role while the member for Melbourne is on maternity leave. This bill makes a number of changes to taxes in the taxation acts, imposing some and decreasing others. We have got additions to stamp duty rates for foreign purchasers. We have got some changes around whether there are exemptions for land that is attached to a principal place of residence, and there are also some reductions in the tax-free threshold for payroll tax, among other changes to the tax acts. It has been raised with me many times that, given the government’s agenda, obviously there is a lot of support out there for a government that does things as opposed to the previous government, which did not do anything. People say, ‘What are they going to do if the money runs out for certain issues?’. I have always said, ‘I thought the Treasurer might have a plan B’. I think he has probably had to go to the top drawer and just pull out some of the tax changes that he has been required to. He has probably got a few of them.

I reckon he has probably got a few more tucked under a pile of papers for a rainy day just in case there are further revenue downturns. He has pulled a few of these tax changes out of the top drawer, and he has introduced them to plug a few holes in the budget. There are a few things I would just like to point out. We will be supporting this bill, and we look forward to a further debate in the upper house, where we can hopefully, clause by clause, go and look at the merits of the various changes. We will not be supporting the reasoned amendment put forward by the opposition. The first thing I would just point out is of course the matter around stamp duty. A lot has been made of the downturn in stamp duty revenue. There has been some commentary that perhaps it has been overblown just a bit. What we have seen is a downturn in revenue from stamp duty—some is in value, and interestingly some is in the volume of transactions, which goes to a point around being so dependent on stamp duty.

This issue around stamp duty—of replacing stamp duty with a more broad-based land tax—is one of those issues that obviously is on the agenda of a lot of people who promote tax reform and look at tax reform. It is one of those things pointed out as being very popular amongst economists and think tanks but one that is put very much in the political too-hard basket, given very much that it replaces a once-off tax with a tax that you will probably see every single year. So it would be much more front of mind for people. That said, it is something that the Greens have said we do need to look at. We do need to look at reforms to stamp duty and replacing it with a more broad-based land tax for a range of reasons. Primarily it is a much fairer tax. It promotes lower house prices and a housing system where people can more freely move to housing that suits their needs, so it could lower house prices and provide a much more stable revenue base. How that is done I think is up for debate.

My federal colleagues put forward a proposal, ran it up the flagpole some time ago, that the federal government could help with the shortfall of revenue to the states. I know the ACT Greens Labor government is in part of a long-term 20-year plan to move from stamp duty to a more broad-based land tax. So we are prepared. This is one of the things that is in the political too-hard basket, but that is not something that is unfamiliar for the Greens. Certainly I think this particular budget and the downturn in stamp duty revenue does raise these sorts of issues about the reliance on a tax that is inherently unreliable. I also point out that in doing this changeover if you are investing in infrastructure, as this government does, that infrastructure is then raising the value of homes around that infrastructure. The efficiency then of making that switch I think would be much more consistent with the existing programs and infrastructure projects that the government has.

I think what also has been lost in the debate around this budget is that we have got these changes and some increases in taxes to plug the hole, but we are also seeing a very big cut to the public service—$1.8 billion. We know what that means. It is called an efficiency dividend. It does mean job losses. It does mean cuts to programs. The Premier and the Treasurer are on the record as saying that redundancies are a last resort. That is good, but they are still on the table. That is what we heard under the previous government, and we know there are a whole range of other ways that the public sector, faced with these ‘efficiency dividends’, reduce staffing levels—not giving further hours to casuals, not continuing with contracts when they come to their end and not filling positions when people leave. There are a whole range of things. I am really concerned about the cuts to the public service. We are already seeing that it is going to be around $200 million this financial year, increasing to over $500 million the next financial year.

I think Victorians have a right to know: for those people who work in the public sector, what is going to be cut? Is their position safe? What are they going to be doing? These are really serious concerns, and I think the government and the departments need to be absolutely clear and transparent to the Victorian people about when, where and how these cuts are going to take place. I would argue that these cuts are unnecessary as well. The Greens put out in our election initiatives a number of initiatives that looked at revenue as well. We looked at taxes on the big banks. We looked at taxing the windfall profits that are made when land is rezoned. These would raise significant revenue—around $1.5 billion each. So it is disappointing to see that instead of going after the big banks and the massive windfall profits from some property developers the government is going after the public sector, which we rely on so much. There are a number of other revenue initiatives that we put forward: increasing the tax on online bookmakers and increasing coal royalties, and even the container deposit scheme was a revenue raiser.

So there are other measures that this government could have taken rather than going after the public sector. Of course it is good that they are maintaining a surplus, but that is well above what they are going after the public sector for. There are a number of projects as well that they could have not gone through with to save revenue. From this budget I think it is very clear that one is the prison. It is a $1.8 billion prison. It is an eye-watering amount of money considering the increase in the prison population is largely due to people on remand who have not even been sentenced. As everyone knows, the statistics around the prison population are incredible, coming from just a narrow band of postcodes. It is directly related to disadvantage.

This is while we have only got $200 million or so for public housing. It is incredible that when the housing sector is absolutely crying out for more funds to address homelessness, which I think is the biggest social justice issue right now—making sure that we have people with secure homes and that people are not homeless and living in insecure accommodation—that we are spending $1.8 billion to home people in prisons, not billions of dollars homing people in homes. It is incredible. The Greens will be supporting this bill in the lower house, but we look forward to further debate in the other place.

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