Legislative Council

GREENS BILL: Ending the $1 Passenger Transport Tax

May 17th, 2017

On the 22nd of May, Mark introduced and spoke to the Greens Bill to put a sunset clause on the Government's new tax on passenger transport in Adelaide - Passenger Transport (Expiry of Point to Point Transport Service Transaction Levy) Amendment Bill 2017. 

Part way through Mark's second reading speech, the President of the Legislative Council rule the Bill "Out of Order" and prevented Mark from continuing.  A copy of the full transcript of proceedings is below.

Introduction and First Reading

The Hon. M.C. PARNELL: Obtained leave and introduced a bill for an act to amend the Passenger Transport Act 1994. Read a first time.

Second Reading
The Hon. M.C. PARNELL: I move:

That this bill be now read a second time.

The point to point transport service transaction levy of $1 per trip, applying to all taxi, ride sharing and chauffeur car trips in the Adelaide metropolitan area, came into operation on 1 May. The new levy was part of last year's budget, and it was introduced to raise money to compensate the taxi industry for losing their monopoly rights to provide certain transport services. The compensation package was mostly in response to the commencement of new ride sharing operators such as Uber, which had commenced operations in South Australia.

The debate over whether compensation of incumbent taxi licence holders and operators was necessary or justified has been a vexed one, but the government proceeded down that path and compensation is now locked in. To pay for it, the government introduced the levy, but is it really a levy? Is it hypothecated to specific purposes? Is it time-limited to the period necessary to raise the funds required for its stated purpose? The answer to all those questions is no. It is not a levy; it is a tax. It is not hypothecated; it can be spent on anything. It is not time-limited; it is open-ended; it is permanent. The tax does not end when it has done its job; it may never end.

This is the wrong that my bill seeks to overcome. This bill ensures, through a sunset clause, that the tax will come to an end when sufficient funds have been raised to satisfy the government's compensation package. There is a certain amount of guesswork involved in calculating how long it will take to raise the amount required to compensate the taxi industry at $30,000 per licence plate and $50 per week for lessees for a period of up to 11 months.

At briefings last year, we were advised that the money could be raised in four years. Since then, further estimates have been provided that suggest it might take a little longer, especially given the considerable compliance and administrative costs. The length of time will also obviously depend on how many trips are taken, which could vary according to prevailing economic conditions.

A worst-case scenario is six years. That is the sunset period that I have adopted in this bill. The $1 per trip transport tax will end in six years. This is certainly something that will be welcomed by the taxi industry, the chauffeur car industry and Uber. I have received communications from the CEO of Suburban Taxis, Mr Vince Mazzoni, who welcomed this bill because it ensured that this would not be a new ongoing tax on their industry.

I have also had discussions with Uber and they are very keen to see this tax come to an end as soon as possible. As members would know, the taxi industry and Uber do not always see eye to eye, but on this issue they are in furious agreement. They do not like the new tax and they want to see it gone as soon as possible.

Let us explore this issue of whether it is a levy or a tax. One question we could ask is whether the money raised might be used for other good things in the transport area. The answer, of course, is yes, it could, but those good things could also be funded in other ways as well, through other taxes and through general revenue.

It is worth teasing this out because the government, in its attempt to convince the public of the merits of this new tax, has identified some other good things that it is proposing to do with the money. These include fee reductions to chauffeur vehicle operators, taxi drivers and owner drivers and improvements to access cabs. There is no legal link between these programs and the new tax. The government might as well have promised to spend the money on police, hospitals, teachers or even cute baby animals. However, the fact remains that it is a new tax and it can be spent on anything. It is not hypothecated to any particular transport task.

In trying to sell the new tax to the travelling public, the government has pointed out that passengers will be no worse off because the government has now capped the credit card surcharge fees charged by taxis from—

The PRESIDENT: The Hon. Mr Parnell, the bill you have before us basically involves money—a tax. It is improper to introduce such a bill in the upper house, so I deem it out of order.
The Hon. M.C. PARNELL: In terms of your ruling, Mr President, it is a bill that proposes a sunset clause. It does not propose to raise any—

The PRESIDENT: I have some very experienced advice here, which says that it does deal with money—taxation—so it is inappropriate.
The Hon. M.C. PARNELL: When I moved the identical provision as an amendment to the budget bill last year, I was not ruled out of order.

The PRESIDENT: That was a suggested amendment, last year.
The Hon. M.C. PARNELL: So, you are ruling the bill out of order?

The Hon. M.C. PARNELL: Is there any recovery mechanism or conditional notice of motion, or something?

The PRESIDENT: Under the constitution, any bill that deals with money or a tax cannot be presented to this council.
The Hon. M.C. PARNELL: Does that include levies?

The PRESIDENT: Levies, tax—anything.
The Hon. M.C. PARNELL: I will accept your ruling, Mr President.
The Hon. T.A. FRANKS: Point of order, Mr President: I have moved a similar bill and we used raised italics as a way of getting around that, as a suggestion to the other place.

The PRESIDENT: That is an amendment and this is a bill.
The Hon. T.A. FRANKS: It was a bill—the voluntary firefighters compensation bill.

The PRESIDENT: That was a clause of the bill, the Hon. Ms Franks. We are talking about a whole bill here. It is a bill that deals with tax and my advice is that it is totally inappropriate to be introduced to this council. You might have to have further discussion about this at a later date.
The Hon. T.A. FRANKS: It was not an amendment to a government or opposition bill; it was an entire bill.

The PRESIDENT: I am not going to argue. I am quite happy to sit down and talk with you, the Hon. Mr Parnell and the Clerk and get some other advice, but this is the advice that I am getting so I cannot pursue it any further. It is ruled out of order.

For more information see a copy of the Bill

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