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Mr MIKE BAIRD (Manly) [5.08 p.m.]: I speak on behalf of the Opposition to the State Revenue Legislation Further Amendment Bill (No 2) 2009. I say at the outset that the bill contains some sensible amendments that will clarify the administration of some taxes. However, I highlight that the tax does little to ease the burden on businesses as the State starts to limp out of recession. The object of the bill is to make several amendments to the Payroll Tax Act 2007 and the Duties Act 1997 to clarify compliance administration, including the introduction of a new secondary nexus provision so that payroll tax for employees who work partly in New South Wales and partly interstate, such as truck drivers, is payable based on where the worker resides rather than where the wages are paid. The primary nexus provision remains unchanged—that is, for employees who perform work only in New South Wales payroll tax will continue to be payable based on where the work is done. The Opposition has concerns in relation to that issue in areas such as the Tweed and Albury. The member for Tweed will talk about those concerns, and I will refer to them later in my speech.
The bill also aims to increase the threshold for landholder duty, which is payable on acquisitions on interest rather than the outright purchase of land or property, from $2 million improved, which is land with a building, to $2 million unimproved, which is land only. The bill also seeks to clarify the creditor exclusion for landholder duty to distinguish between debt and equity interests to determine which interests are dutiable; to clarify that an agreement for sale of an interest in a landholding is taken to be completed within 12 months from the date of that agreement, acknowledging that it is possible for people to use long-dated or undated transactions as a means of avoiding duty and this will close that loophole; and to clarify the imposition of landholder duty so it is payable on changes of beneficial ownership in landholding, companies and trusts.
The bill also seeks to clarify that duty is payable on the transfers of mining leases, and I will refer to the New South Wales Minerals Council later. The bill provides that carbon sequestration rights are not interests in land for the purpose of the Duties Act, as set out in Council of Australian Governments agreements to harmonise the issue of those rights across various States. The bill also makes a minor amendment to the Parking Space Levy Act 2009 No 5 to clarify the imposition of the levy as from 1 July 2009. I understand that a Parliamentary draftsman picked up a drafting error and we congratulate whoever that was.
I understand that in June all States and Territories agreed to a new secondary nexus provision, which will obviously assist in the harmonisation of payroll tax and help drive New South Wales to become the first place to do business—a stated economic goal on this side of the House. We support harmonising wherever we can because it provides a huge relief from the regulatory burden on businesses in this State. There is also value in introducing a nexus provision as growth in the electronic transfer of wages has made the administration of payroll tax more complex. It has become common for employees to have their wages paid to more than one account and in jurisdictions other than where they have performed services. A nexus provision will make it easier for companies to administer payroll tax.
The bill effectively raises the threshold for landholder duty. That makes sense because it is the first time the threshold has been raised since 2003. In some cases the full payment of the purchase price has been delayed, sometimes indefinitely, as I said earlier. I note that the Property Council of Australia has raised concerns that legitimate transactions could be caught by this provision. I will allude to some of the Property Council's concerns later and ask the Minister or the Parliamentary Secretary to address those concerns when he replies to the debate and to provide some comfort to the Property Council.
Adopting the Australian Tax Office's test to distinguish between debt and equity interests in property will help ensure that genuine creditors are exempt from landholder duty. Clarification of the imposition of landholder duty is needed to ensure that the acquisition of a corporate trustee of a discretionary trust is not used to avoid landholder duty. Having seen creative lawyers and financial engineers at work, I can understand the need to close some of those loopholes. Most of the provisions address what is clearly, according to Treasury advice, the means and mechanisms that people use—intellectual capital that could be applied in other ways—to avoid paying duty. The bill certainly closes those loopholes, and we commend and support those provisions.
We have some concerns that the changes to the calculation of landholder duty may be more complicated for taxpayers to understand as the threshold is based on unimproved value yet the amount of tax they have to pay is based on improved value. The distinction between those two issues may provide a complication and we hope it is made clear in the information that is distributed to taxpayers. The Property Council of Australia has raised some specific concerns that we ask the Government to address. The Property Council has raised concerns that the provisions relating to a discretionary trust are "unclear and uncertain in their intention and operation" and that "they appear to make it impossible for a person to determine whether they are acquiring an 'interest'". The Property Council considers that the existing clause should remain, and we are open to the Government's advice in relation to that issue. The Property Council also makes the point that determining the ultimate beneficial owner of a bare trust in part 2A is "difficult, if not impossible". Even if it is difficult perhaps the Minister or the Parliamentary Secretary could suggest how it could be clarified.
The Property Council of Australia believes the amendment to part 2A "gives rise to the potential for unintentional double duties", which should be avoided and should be addressed. The Property Council opposes the provisions intended to close the loopholes regarding the timing of payment of landholder duty as it "creates an additional cost for genuine transactions that may not be agreed to be completed within 12 months". Even though there is a provision for a refund, it does not include interest and would create additional red tape. I believe that particular point is open to interpretation, but the Property Council raises it as a legitimate concern and I can understand that people may use that particular mechanism to avoid paying duty. I look forward to the Government's response in relation to that issue. The Property Council is also concerned that legitimate equity schemes of arrangement will now be liable to duty and believes that the commissioner's powers under the anti-avoidance provisions are "sufficient to deter avoidance behaviour".
I was surprised that the New South Wales Minerals Council was not consulted about the bill in relation to the potential duty on the transfer of mining leases. Part 32 of schedule 1 to the bill confirms that duty is now payable on the transfer of mining leases. I believe the New South Wales Minerals Council is open to that provision, but it should be acknowledged that the council is a stakeholder that is directly impacted by the actions of this legislation. As such, it should be consulted and its concerns should be allayed in this debate.
In relation to the Tweed—and we know the local member is 100 per cent for the Tweed—the Minister for Finance offered support and made a direct promise to provide staff on the ground to work on harmonising taxes in the Tweed. There is no doubt that the Tweed suffers and it is unlike any other region in the State, except perhaps Albury—and the member for Albury would raise similar concerns. Businesses in this State operate at a competitive disadvantage to those located a few hundred metres down the road. As a matter of priority, the Tweed must be considered a particular economic zone and the significant competitive disadvantage that businesses in the community suffer because of their proximity to Queensland must be noted. We on this side of the House join the member for Tweed in asking the Minister for Finance to honour his commitment to prioritise this matter—a commitment we understand he made directly.
We need to prioritise these issues—not just tinker around the edges—when tax laws impact across borders. Places like the Tweed should be front and centre of the economic plan to restore this State. My colleague and good friend the member for Tweed will work on the issue directly, but we ask the Minister for Finance to honour his commitment and look very closely at the problems facing the Tweed, such as how we can start to make the region competitive with its neighbours across the border.
In regard to the parking space levy, the bill makes a small amendment relating to dates and the enforcement of a particular date. But it would be remiss of me not to put on record that the parking space levy is a good example of how this Labor Government announces policies without conducting any analysis. Treasury documents obtained by the NSW Liberals & Nationals have revealed "little research" was done into the "effectiveness of the PSL [Parking Space Levy}", which was almost doubled by the Rees Labor Government in last year's Mini Budget. It was claimed that the levy was necessary to reduce congestion and increase the use of public transport, but we know that that claim was made without any clear evidence whatsoever. It was revenue first, and analysis and reasons later. One cannot get a better example of how this Labor Government goes about its business. It has a budget shortfall and it needs to find revenue but it does not want to consider what the impact will be and it does not want to consider a broader strategic policy. Is the Government trying to impel people to use public transport? If it is—and that seems to be the intent of this levy—is public transport in a position to cope with the increased demand? Should there be a congestion charge? We do not know; there is no analysis. Who is going to determine how those funds will be used?
I have heard the Minister for Transport say that the revenue will go to parking stations, but we do not know how the funds will be used. If a government wants to run a broad policy it should do the analysis first. This is a good example of how that has not happened. In the next two years revenue of about $100 million will be collected from the levy, but no analysis has been done on the impacts, whether we were ready for such a levy or how the proceeds will be used to make this city more sustainable. The Treasurer should take responsibility for that. I call on him to undertake appropriate analyses. That should happen before any announcement is made: the long and short-term impacts of every decision should be analysed.
The Labor Government's economic management strategies are called into serious question given its handling of payroll tax. The Treasurer's new favourite term is "green shoots". He is driving us all mad with his constant references to green shoots. Walt winds him up and tells him to say only two words—green shoots—and he religiously follows those instructions. It is amazing that he can use them every time he opens his mouth. He forgets that it was this Labor Government that scorched the earth of the New South Wales economy. The Treasurer used a prop in the other place that looked as though it was from his grade 6 science project showing green shoots emerging from the earth. This is a serious issue, but the Labor Government attacks the problems facing the economy by spinning a nice line. Walt does that incredibly well. The approach is cloaking very serious problems and that is why our economy continues to struggle. This State continues to struggle because the Government is not dealing with the real issues.
Only this Labor Government could be excited about a $1 billion deficit. The Government was told that the deficit would be $1 billion rather than $1.3 billion, but that was only because Kevin Rudd provided extra funds. Members opposite organised a press conference to announce to the world that this State has a $1 billion deficit and we were supposed to be excited. We need some facts put on the record about this Government's policy response to the global financial crisis rather than Walt's spin. Of course, Eric would have nothing to say if he did not have that spin. How has this Labor Government responded to the global financial crisis, which has been a huge economic challenge for the State? The response by the Treasurer and the Premier was the New South Wales Housing Construction Acceleration Plan. That was a cornerstone of the budget. It was supposed to be worth $64 million. The Treasurer recently said that homebuyers had saved $7.2 million in stamp duty. That equates to about 0.0018 per cent, and I acknowledge that contribution. However, it is about 11 per cent of what was promised.
The Treasurer talks about infrastructure and record spending ad nauseum. The truth is that the infrastructure program was announced by Morris Iemma almost two years ago. The mini-budget explicitly cut infrastructure funding. Of course, Kevin Rudd then rescued the State Government. New pictures of Kevin and Nathan are appearing because this Government is desperately trying to latch on to Kevin's popularity—which is questionable. It is trying to take credit for the stimulus provided by the Rudd Government. This Government's spending on infrastructure has actually declined. Treasurer Roozendaal talks about record spending on infrastructure, but if we were to subtract the funds provided by Kevin Rudd it would be clear that the amount allocated to infrastructure has declined. The allocation for the north-west rail link did represent an increase in infrastructure spending, but it was cancelled, which resulted in a decrease in spending. At the height of one of the biggest economic crises this State has faced, this Government cut infrastructure spending. Regardless of the spin members opposite try to put on it, that is the truth.
Government members also go on and on about all the jobs that have been created. We were told about the $7.2 million contribution, but the Government spent $2 million on an advertising campaign to tell everyone what a good budget it had handed down so almost all that contribution is gone. Robert Carling, a former Treasury official, said:
The statement that infrastructure spending will ‘support up to 160,000 jobs’ is an unsourced, unsubstantiated assertion. It is stated as a scientifically verifiable fact but is impossible to substantiate...
For my part, I am willing to concede that the infrastructure spending and associated tripe will help support 70 jobs – those of the Labor members of the NSW Parliament.
Mr Carling is a respected commentator and what he said is the truth. A freedom of information request revealed a comment written on a draft of the budget speech by a Treasury official stating that the department could not verify the claims about jobs supposedly being created at Port Botany and Orange or by Pacific Highway projects. I have sympathy for the Treasury officials who had to try to give some credibility to the Government's pie-in-the-sky job numbers. The Government cannot verify the creation of those jobs and infrastructure spending has declined. That is its response to the global financial crisis and the final infrastructure stimulus figure is $7.2 million. Eric Roozendaal and Nathan Rees are kidding when they pretend that this Labor Government has created any sort of economic stimulus.
The Opposition obviously supports the allocation of $7.2 million in stamp duty relief. However, that is the only measure that this Government is entitled to talk about. It has done nothing else in response to probably the most serious economic event in recent history. The downturn has been less severe than anticipated, but this Government decided to do nothing in response. Treasurer Roozendaal can spin his green shoots, but this Government is responsible for the scorched earth that is this State's economy. We are limping out of the recession and we will continue do so because this Labor Government is happy to spin ideas and to take credit for improvements when it has done nothing to achieve them.
If the Government had adopted the Opposition's payroll tax policy it would have directly stimulated the businesses that employ two million people across this State. If it had done that, if business confidence had improved, if employment had increased and if investment had grown, I would have been the first to applaud. Sadly, that did not happen. This Government did absolutely nothing at a most critical point. While there has been some improvement, that has occurred as a result of the Federal Government stimulus, which impacted on retail sales. I have heard Treasurer Roozendaal take credit for increasing retail sales. He should understand that when stimulus money goes into consumers' pockets they spend it and retail sales increase. The State Labor Government cannot claim credit for that.
I acknowledge that the CommSec report that was released last month is only one report, but it contains a few points that the Treasurer should take on board. It ranks the economic performance of each State and Territory Government over the past 10 years using various economic indicators. On economic growth, New South Wales ranked eighth; on retail trade, seventh; on unemployment, sixth; on construction work, eighth; and on dwelling starts, eighth. Overall it was also ranked eighth. That independent report states that over the past 10 years New South Wales has come last in the economic performance rankings. The first thing that a genuine, transparent Government that is trying to fix the problems should do is to acknowledge them. It should try to understand the reasons for them, the blockages and how to attack them.
We have outlined plans in relation to payroll tax. The payroll tax reductions that Government members spoke about were outlined well before the global financial crisis, so the Government's policy response in relation to payroll tax during that time was nothing. The Opposition has outlined a payroll tax plan. We have also outlined Infrastructure New South Wales. There is an opportunity for this Government to bring together a body of experts, not just from around the country but also from around the world, to deliver infrastructure in this State. When plans are put forward infrastructure will be delivered. That is a commitment from this side of the House.
Whether it be infrastructure, payroll tax reform or doing something about the regulations, we need to return confidence to businesses in this State. If we return confidence to businesses, they will start employing people, start investing and start helping to turn the economy around. Holding up a poster of green shoots is not the way to do it. That is a stunt. It is symbolic of the way the Government goes about its economic management. It has a huge responsibility to drive this economy forward and the unfortunate reality is that we are doing nothing more than going backwards.
While we support the tenets of this bill and the concept of harmonisation and closing loopholes for people who have been creative in avoiding duty, we make the point that both the Premier and the Treasurer have much more to do to turn New South Wales around, to apply themselves seriously to the job of economic management of the State and to not take credit for things they have not delivered. As soon as they start understanding that, the State will be in a much better position and can start leading this country again.
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