State Revenue Legislation Amendment Bill 2008 
|
| Wednesday, 09 April 2008 | ||||||
|
Mr MIKE BAIRD (Manly) [6.40 p.m.]: I lead for the Opposition in this debate on the State Revenue Legislation Amendment Bill 2008. The bill seeks to provide tax concessions and first home buyer benefits to those with legitimate claims, to prevent duties avoidance practices, which are costing the State millions of dollars every year, and to extend some payroll tax provisions. The Opposition does not oppose the tenets of the bill and supports its objectives. It is pleased that the Government is taking some steps to make the First Home Buyers Grant more equitable. However, much more needs to be done to improve housing affordability and to ease the housing crisis. The bill amends seven Acts that relate to the administration of taxes and first home benefits. Schedule 1 outlines the changes to the Duties Act 1997. These include clarifying the duties concession for people buying their first home. There are anomalies that render some first home buyers ineligible for the concession because of the form of land title under which the new home is held. This bill will correct that. The bill also extends the duties concessions for transfers out of a deceased estate and it introduces a duty exemption for pharmacists who incorporate. This amendment was made for the legal profession a few years ago. The bill also tightens some loopholes, such as in relation to land rich duty. The law requires that when a company is sold and it owns the land it occupies the new owner must pay stamp duty on the land as well. However, parties often avoid paying this duty by drawing up a declaration of trust so that the legal title is still in the name of the previous owner. That often involves families, friends and associates. It is clearly done to dodge this tax. This results in one of the biggest areas of tax avoidance in the State. According to the Office of State Revenue, more than $50 million in revenue was lost last year as a result of this practice. This bill will close that loophole. The bill also introduces a concession on the duty payable for registration of a motor vehicle that has been modified for use by a person with a disability. This concession means that up to $25,000 spent on modifying such a vehicle is exempt. That is commonsense and welcomed by members on this side of the House. Schedule 2 amends the First Home Owner Grant Act 2000. With housing in such short supply, some young couples—particularly those in rural areas—are forced to build on their parents' land. They have not previously been entitled to the First Home Buyers Grant because they do not own the land on which they are building. The bill amends the legislation to allow the grant to be claimed in these circumstances. The Opposition also welcomes that amendment. Schedule 3 makes an amendment to the description of family membership plans in the Health Insurance Levies Act 1982 to utilise a definition used in Commonwealth legislation. Schedule 4 outlines changes to the Land Tax Management Act 1956. The amendment clarifies that land tax must be paid on each property, even if a single place of residence is claimed over adjoining properties. If people are lucky enough that their property sits on two or three titles, this bill provides that that would constitute a single residence. The idea is not to attack individual property holdings. If there is a principal place of residence, it will qualify. Schedule 5 amends the Payroll Tax Act 2007 to clarify an exemption relating to the wages paid by not-for-profit organisations and to modify the payroll tax grouping provisions to align them with systems in Western Australia and Victoria. Schedule 6 relates to the Taxation Administration Act 1996 and clarifies when tax officers may disclose information under taxation laws. Finally, schedule 7 amends the Unclaimed Money Act 1995 to extend Commonwealth laws relating to unclaimed money to superannuation providers. The bill also contains various housekeeping and statute law revision amendments, including the repeal of the Debits Tax Act 1990, because the tax under that Act has been abolished, and the repeal of the Stamp Duties Act 1920 because it has been replaced by the Duties Act 1997. The Opposition calls on the Government to consider further amendments in relation to stamp duty. New South Wales Property Council Executive Director Ken Morrison told the Australian Financial Review yesterday—and he has been saying it for a long time—that stamp duty definitions should be harmonised with those in force in other States. He said that "governments tend to move fast to plug leakages, but impediments to efficient business practices also need to be addressed". Harmonisation of stamp duty definitions would assist in that regard. I refer now to the housing crisis and the impact of stamp duty. The amendments extending the eligibility of the First Home Buyers Grant are a step in the right direction—to use a slogan previously used. However, much more needs to be done. Housing in New South Wales is scarce and house prices are sky high. Sydney has the highest number of households experiencing mortgage stress in the country. A Housing Industry Association report released last August stated that 41.1 per cent of households are experiencing mortgage stress. There were 3,935 writs of possession in New South Wales in 2007. So almost 4,000 New South Wales families lost their homes last year. It is alarming that the Government requires only 5 per cent of houses in housing developments to be affordable. Mr Geoff Corrigan: What is the Opposition's plan? Mr MIKE BAIRD: I thank the member for Camden for that interjection. I did not think he was listening. The figure in London is much higher—50 per cent. Even in South Australia the figure is 15 per cent, which is three times what is required by the New South Wales Government. Professor Julian Disney, who chaired the State Government's housing affordability taskforce in the late 1990s, told the Sydney Morning Herald, "disturbingly little has been done since then ... New South Wales is dragging the chain badly". In 2006 the amount of land developed in Sydney was roughly the same as that developed in Adelaide. New South Wales also has the highest infrastructure charges in the country, at around $43,000 per residential lot compared with $8,000 for Victoria and none for Perth. Only 29,300 new homes and units were built in New South Wales in 2006-07, compared with 53,000 in 1995 under the Fahey Government. That is the lowest level of residential construction in New South Wales since the Australian Bureau of Statistics started collecting data in 1969. So we do have a crisis. CommSec economist Martin Arnold said publicly that housing construction in New South Wales was weak and there was little incentive for investors to build. He said, "You are really on the back foot in New South Wales." Further to the interjection about the Opposition's plans, in June last year the New South Wales Coalition recommended that the Iemma Government adopt a shared equity program to help get first home buyers into the market. The Opposition examined the program and believes that it has significant merit. The shared equity scheme was introduced in Western Australia last year after Perth experienced escalating real estate prices similar to those in Sydney. The Western Australian Government's First Start scheme allows the Government to buy a portion of a home with eligible first home buyers. That portion can be bought from the Government at a later date. I call on the Iemma Government and members opposite to give young couples and families a much-needed leg up by purchasing part of a property for eligible first home buyers. It is a commonsense measure that will not only provide thousands with a home to call their own but will also drive jobs, investment and growth. I offer that little plan for members to consider. The profile of homelessness is changing in this State. People suffering mortgage stress who have jobs are being forced onto the street in large numbers. I mentioned yesterday's release of the findings of the National Youth Commission inquiry into youth homelessness. The figures in the report are staggering. The number of homeless youths across the nation has doubled in the past two decades. The Opposition has called on the State Government to hold a New South Wales summit to address homelessness. The bill proposes to modify the payroll tax grouping to align it with the legislation in other States. As the Government seems keen to bring New South Wales into line with other States, I call on the Treasurer to cut the State's payroll tax rate, which at 6 per cent is the highest on the mainland. In Victoria it is 5.05 per cent and in Queensland it is 4.75 per cent. Payroll tax accounts for a third of New South Wales' tax revenue. Payroll tax collections in the current budget will increase by a total of 29 per cent, or $1.6 billion, over the next four years. Before the recent election, the Premier said he "would love to cut the 6 per cent payroll tax rate when there was a lift in economic projections and a rise in GST payments". The newspapers state that the Treasurer is expecting a budget surplus that is several times greater than the $506 million predicted last December. Now is the time for the Premier to honour his commitment to cut payroll tax. Here is an opportunity to do so, and I am sure that that is what he will do. He said he will do it, and we call on him to do it. He should honour his promise, particularly as his brilliant Treasurer we hear is talking about a surplus several times greater than $506 million, or about $2.5 billion. With a surplus of that size, they could start cutting payroll tax. The reality is that New South Wales-based small businesses are paying almost 10 times as much in State taxes as their Queensland counterparts. A 12-employee firm in Sydney pays approximately $25,600 in State taxes, compared with only $2,600 it would pay if it were based in Brisbane. That is an indictment on the Government. We wonder why businesses move from New South Wales and set up in Queensland. The statistics speak for themselves. The New South Wales Government is by far the most unpopular State government among small and medium businesses, with a rating of minus 40 per cent. [Interruption] I am reading the statistics. Members opposite should listen. The New South Wales Government has recorded the lowest confidence level of any State or Territory for 11 of the last 12 quarters, according to the Sensis Survey of May 07. I can provide a copy of that to Government members. Amending the payroll tax groupings through this bill is worthwhile, but cutting the payroll tax is substantially more important. It should be an imperative in the coming State budget. The Opposition supports the tenets of the bill and calls on the Government to accept its responsibility to provide affordable housing to New South Wales families and provide a fairer tax system for New South Wales businesses. Add to:          Write Comment
|
||||||
