State Taxation Acts Amendment Bill 2023

31 May 2023

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I rise to speak to the State Taxation Acts Amendment Bill 2023 on behalf of the Greens. This is a bill that seeks to make a range of changes to the state taxation system, amending eight acts, but predominant of course are the changes to land tax and the changes to payroll tax. In terms of payroll tax there will be additional tax for those with payrolls above $10 million and an increased rate again for those with payrolls of $100 million. This is estimated to raise about $3.9 billion over four years. Similarly with land tax, the tax-free threshold is going to be lowered, and there are some additional fixed charges as well, which are estimated to raise $4.7 billion in four years. These have been couched in frames as being temporary, even though they will be for 10 years, and focused on paying down debt.

In principle the Greens certainly support the need at this particular time to raise revenue. It was clear in the lead-up to the budget that revenue did need to be raised, and those who can afford it should be paying their fair share.

It has been pretty galling over the past year or so, particularly in the midst of a cost-of-living crisis, to see corporations profiteering, posting record profits, while Victorians in need are struggling. Just for example, the big banks are forecast to rake in about $33 billion of profit this financial year, record profits, and in fact it has been corporate profits that have been driving inflation. The Greens put forward a number of measures in the lead-up to the budget, including a bank levy and making property developers and the gambling industry pay their fair share, which I can go into a bit more detail on later, but we are extremely disappointed that this revenue is not largely going towards addressing the huge social issues that Victorians are currently facing.

The government has been at pains to point out that this is all paying down a COVID debt. I mean, this has all been spin from the government. Obviously there are a whole range of factors that have contributed to the government’s current debt, not just expenditure incurred from COVID but of course the infrastructure program as well – a whole range of factors of revenue and expenditure that contribute to the current fiscal situation. So really I feel that they have just landed on this COVID debt as sort of the most politically saleable way of selling what is actually required and they just need to raise revenue.

But what we are very disappointed with is that the revenue needed to be raised to address the many issues that Victorians are facing. The cost of living is through the roof. People are feeling the pinch. More and more people are being pushed to the margins, into poverty. They cannot wait another few years, whether it is when we are back into surplus or at another point in time, before there is any prospect of things getting better.

When you look at the plight of renters, there is nothing in the budget for renters, no safeguards in this bill for renters. We know we have got landlords who are already reaping windfalls from an overheated private rental market threatening to pass on the cost increase to renters. We have got renters facing another year of massive rent increases in a system that is in desperate need of reform. Rents I think have gone up 10 per cent and are due to go up another 10 per cent, pushing many to the brink. At the moment, right now at this point in time, the government is basically saying no to a rent freeze, no to rent controls, no to short-stay accommodation regulation, no to strengthening the vacancy tax – no to even a parliamentary inquiry, which finally the committee itself has managed to get up, but I think the government was trying to run interference on that on Tuesday. It is not an acceptable situation. We need clear, strong and immediate action in turn to safeguard and to protect renters here in Victoria.

There is a whole range of other issues that really needed to be addressed by the revenue raised in this bill: homelessness. Thirty thousand people are experiencing homelessness every single night, sleeping rough, couch surfing, in crowded or unsafe accommodation. Yet you have got a government, in their previous bill to raise revenue, shovelling more money into the racing industry, four times more in fact than they are into homelessness services. We have got people being turned away from homelessness services. We have got a public housing waiting list rising to 120,000 people. There was nothing – no more funding for social or affordable housing in the budget. It is not an acceptable situation.

As part of this so-called debt repayment plan, not only do we have revenue raised but then we have got massive, billion-dollar cuts to the public sector. Workers have already experienced low wage growth for years and have now just experienced the biggest real wage cut on record, and throughout this time we have got a government who has a policy of deliberately keeping wages low.

The SPEAKER: Order! Can I ask members to cease walking between me and the person on their feet. Member for Mildura, that includes you.

Sam HIBBINS: Thanks, Speaker. Just recently, up until just a few weeks ago, the wage cap was set at 1.5 per cent. It recently increased to 3 per cent, but that means all those workers who negotiated deals under that old wage cap are still going to be having those low wage increases, low wage growth, at this time of mass inflation, and even future wage rises just are not going to come close to meeting the rising cost of living. On top of all that we have now got cuts to 3000 to 4000 public sector workers over the next 12 months.

Just recently – I think in this debate – we had a government member saying we should all be saying thanks to our fantastic essential workers. Well, that is great. Let us say thanks to them; we all have been. But let us demonstrate thanks to them. The first port of call is to not sack them, not cut their jobs, but to make sure that they have got secure jobs with good wages that actually meet the costs of living, that go up with the cost of living. The idea that you have got public service staff just hanging around – they have already gone through multiple billion dollars worth of efficiency dividends in previous budgets – and that this is not going to have an impact on frontline services is I think just an absolute fantasy. For all the commentary that was done prior to the election talking about how Matthew Guy’s Liberals were going to be the party of cuts, to serve this up at the first budget I think is just absolutely appalling.

From our perspective much more could have been done to reform tax and raise revenue to pay for the things that Victorians urgently need. The government has been again at pains to point out that these are temporary measures, even though they are over 10 years. What we put forward is a bank levy, having the banks pay their fair share. The reality is that banks are posting record profits but are effectively subsidised by government by being too big to fail. So we think a levy as applied by the federal government or as has previously been proposed by the South Australian government could have raised billions of dollars, between $4 billion and $15 billion over 10 years, depending on the rate that was set. We could have seen a reintroduction of the social housing levy dumped last year, which could have gone to paying for more public and affordable housing instead of nothing seen in this next budget. We know the government’s current build is not meeting what is required. So there was a real opportunity I think in terms of longstanding systemic tax reform that could have been permanent that could have been applied in this year’s budget and brought forward in these bills that could have gone a very long way to meeting those needs, whether it is housing, cost of living, renters, public and affordable housing or a number of social issues that Victorians are facing right now. People cannot wait for those things to get better.

One aspect that we did support – and actually put forward – was the land tax exemption for land on conservation covenants. Currently people who wish to put a conservation covenant on their land to protect the biodiversity values in perpetuity are required to pay land tax on this portion of their property. This has been a disincentive for people to protect private land for conservation. Most other states in Australia have exemptions, and we certainly welcome Victoria joining them. I think it only brings in a small amount of land tax anyway, land tax on conservation covenants, so the budget impact will be very small. So certainly we support that measure.

I note we have heard from the opposition certainly that they are opposed to any tax increases, but also they want to legislate a debt limit. Really, when you look at that, what they are selling here is a state of permanent austerity here in Victoria, which we just cannot have. People in need cannot afford that. So I would urge the government, as this bill progresses, not to leave people in need behind, not to leave renters behind. Make sure that there are proper safeguards for them against the rampant rent rises that they are facing. Renters, people in need, cannot wait years or months for meaningful action.

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