GOVERNMENT BILL: Budget 2016
November 1st, 2016
On the 1st of November 2016, Mark spoke to the Statutes Amendment (Budget 2016) Bill.
The Hon. M.C. PARNELL: I rise to speak to some aspects of the budget bill, and my colleague the Hon. Tammy Franks will also speak to items in this bill. I will not address all of the issues raised by the Statutes Amendment (Budget 2016) Bill, but I want to touch on a couple of issues at this stage and, like all members, I reserve the right to ask more questions when we get into the detailed committee stage.
The first thing I would like to do is thank the Treasurer, and Mr Ben Tuffnell in his office, for arranging a comprehensive briefing. Because so many pieces of legislation are amended by this bill, the briefing I think consisted of some 10 or so government officials, and I appreciate the time they took. I also thank them for answering a number of questions on notice that I provided, and I will refer to some of the answers and ask some supplementary questions as we go along.
The bills that are amended include the Land Tax Act, and one of the things the bill does is change the taxable status of land that is owned by sporting and racing associations. A number of sporting and racing associations have already had exemption from land tax, but the proposal in this bill is for further exemptions to be granted. I asked the advisers when they came to see me about precisely which organisations will benefit from this additional land tax exemption, and I will just read a couple of sentences of the answer they provided to me subsequently. It says:
Sporting and racing associations could stand to benefit from this exemption, as long as the association is established for one of the eligible purposes, and that is sporting purposes, playing of cricket, football, tennis, golf, bowling or other athletic sports or exercises, or racing, and that includes horse racing, trotting, dog racing, motor racing or other similar contests.
It then goes on to set some other requirements. The advice to me in relation to exactly which organisations will benefit includes the following:
Based on the 2015-16 land tax holdings/liabilities, the following types of sporting and racing associations will stand to benefit from the expanded exemption. Note: associations that would stand to benefit from the exemption but that do not pay land tax on the relevant land, as the association's total landholding does not exceed the 2016-17 land tax free threshold of $332,000, have been excluded from the table below.
I will not seek to have the table below incorporated in Hansard because it is a table of one line, and basically it says that there are nine sporting associations that are expected to benefit from the additional land tax exemptions and two racing organisations.
What I would like the minister to take on further notice is which two racing organisations: which ones will benefit from additional land tax exemption? If the minister could name those organisations, then I would appreciate that. The fact that the department knows that there are two of them means that it must know who they are, and I would like to know as well.
The next issue in the bill that I would like to touch on are the amendments to the Passenger Transport Act. The thrust of these amendments is to introduce a $1 per trip levy on all metropolitan point-to-point transport journeys. The purpose of this levy, which was intended to start on 1 October this year—but clearly, we have not passed the bill yet, so it has not yet come into operation—was to compensate the taxi industry for the loss that it is deemed to have suffered as a result of the introduction of ride sharing services such as Uber.
The idea is that $1 per trip will be collected from taxi passengers, Uber passengers and licensed chauffeur passengers and that that money will go into a pool, from which taxi operators will be compensated. I have to say that I do have some concerns about the validity of a compensation regime. Members would have received correspondence from Uber, and I will just refer to a couple of sentences of that submission. It will be no surprise to members that they do not like it, and I think that their reasons are quite sound. Under the heading, 'No transparency', Uber's submission states:
The SA Government has announced a $31 million compensation package for taxi licence holders , funded by a $1 per trip levy on all transport models. The Government has provided no modelling to support its new tax . N o end date has been placed on the levy and it is expected to raise far in excess of compensation requirements, generating at least $80 million over 8 years.
South Australians deserve to know how the Government will spend this levy. The taxi industry estimates that fewer than 40 South Australian taxi licence holders actually operate their taxi. Large companies, trusts and families hold a significant number as passive investments. Licence s holders have already benefited through extraordinary returns , and purchased their licences at heavily discounted prices that reflected the risk of regulatory reform.
The Uber submission goes on to state that this $1 per trip levy will make ride sharing 8 per cent less affordable and that it will make even taxi fares 4.7 per cent more expensive. The Uber submission (I am pretty confident that this would have gone to all members of parliament) is that the levy should not be charged. The submission concludes:
Forcing emerging industries to compensate incumbent sectors will deter innovation. A levy imposed on safe, reliable and affordable transport would mean asking new entrants and new consumers to pay for the repair of bad laws—bad laws that have benefited those demanding compensation. That is an unprincipled approach to law reform. The levy amounts to a price tag on choice, innovation and progress.
The reality of the situation, as I understand it, is that because these measures are included in a budget implementation bill, the opposition is disinclined to oppose any parts of the bill and reluctant to amend the bill, but I think that an exception could be made in this case. The clear reason that the government said it wants to raise this levy is to compensate the taxi industry.
My submission, which has been incorporated into amendments that have been filed, is to say, 'Okay, let the government have exactly what they said they wanted; that is, enough money to compensate the taxi industry.' That is not what this bill does. What this bill does is create a new open?ended tax that lasts forever. It lasts way beyond the money that is needed to compensate the taxi industry has been collected. If you think about it, what we are effectively doing, beyond the purpose for which the money is needed, is taxing those who choose not to use private vehicles.
Some people choose not to use private vehicles for a range of reasons. Sometimes they are not able to drive themselves. Other people are making a choice to use their private car less or perhaps a choice to own fewer private cars. Taxis and Uber really fall into the category of public transport, so effectively what we are doing is taxing public transport users, and not to compensate the taxi industry, because within about four years enough money will have been collected. We are just taxing those people using Uber, chauffeured vehicles and taxis. We are taxing those people forever for general revenue.
I do not think that is fair. It is not that I am against the government raising sufficient taxes for its operation. On the contrary, the Greens are always supportive of having a decent tax base, but not this one, not taxing people using this form of transport. There are plenty of other things we can tax: we could tax more pollution and there is a whole range of things that we could do. We could tax some of the speculative financial behaviour that we see, but we do not need to tax people who are using Uber or taxis.
My amendment says, 'Yes, let's have this levy but let's end it after four years.' That is what the government said they wanted the money for. It gives them enough money but then the tax comes to an end and other forms of taxation can then be considered. I think it is consistent with the position the Liberal Party has taken, which is a position I should say that has been honoured in the breach on previous occasions.
When it is put to me that there is a convention, and that the opposition does not oppose budget measures, well, the carpark tax was a budget measure and that was opposed. It was put to me that that was a different case because they had talked about it during an election campaign. Well, it seems to me that, using similar principles, the government has said that they want a levy to compensate the taxi industries. Let's let them have that but no more; so in other words, finish this tax after four years. If the government wants to come back and say, 'I've got the figures wrong and it is going to take longer,' then they can try and make that case, but on the calculations provided to me, four years will be enough.
The bill also amends a number of other acts including the act that provides exemption from stamp duty for people who buy apartments off the plan. That is a policy that the Greens supported when it came in. The policy originally applied to apartments in the CBD and the Greens supported it because we know that increasing the population of the city is good at a number of levels: it is good for the vibrancy of the city, it is good for resources, it requires a less car-dependent society, and there are lots of reasons to encourage more people to live in the city. The policy was then extended to the inner suburbs and, again, the Greens supported that.
As an alternative to urban sprawl, you increase the density of people living in the city and inner suburbs so that made sense as well, but I am really scratching my head as to why the policy should now be extended to apartments or flats (using the old language) built anywhere, not just in inner suburbs or the city but anywhere—far-flung areas. The amount of subsidy, effectively, that that provides in terms of an average apartment, whether it is 400 or 500 or a fancier apartment at $600,000, we are talking about $20,000 tax forgone. My question of the minister is what is the policy basis for extending that tax exemption to apartments bought off the plan anywhere and not confining it to areas where there is clear policy reason to do so such as the city and inner suburbs?
It seems to me that it is nothing more than a taxpayer subsidy to the apartment building industry and I cannot see that it makes a lot of sense. It doesn't provide that preferential treatment that city and suburban apartments I think deserved. I would ask the minister if he could address that in summing up or at the committee stage. There are other issues which I will raise when we get into the committee stage.
The bill raises a number of issues where I have concerns but they go beyond the scope of the bill so it might be difficult to deal with those, but for now the Greens will certainly be supporting the second reading of the budget bill. We look forward, when we get into committee, to the Legislative Council supporting the amendment to limit the taxi tax or the Uber tax to four years so that it does just what was promised it would do and that is compensate the taxi industry and no more.
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