Bill: State Taxation Acts Amendment Bill 2025

BILL DEBATE

‘STATE TAXATION ACTS AMENDMENT BILL 2025.’.

Wednesday, 28 May 2025.

James NEWBURY (Brighton) (10:54):

I rise to speak on the State Taxation Acts Amendment Bill 2025 on behalf of the Coalition.

In its substance, much of this Bill is about technical changes – not just technical changes – to a number of tax-related Bills, including the Commercial and Industrial Property Tax Reform Act 2024, the Land Tax Act 2005, the Payroll Tax Act 2007 and the Taxation Administration Act 1997, as well as others. But what this Bill does not do is make any structural tax changes or substantially reduce the tax burden on Victorians.

We have been having a debate in Victoria about that burden. The recent Budget highlighted the incredible burden of tax that is being placed upon the shoulders of every Victorian. When you look at the Government’s strategy – I suppose if we use the word ‘strategy’ in the loosest possible terms – in their Budget and in their most recent Budgets, the underpinning of the revenue base for the Government’s spending, their overspending, is taxing Victorians. Victorians now know that the tax burden is too great. Over the life of this Government wages have gone up by an average of roughly 38 per cent and the tax burden has gone up by 183 per cent. The real winner in this State is the Government through its massive, massive tax collection.

The government said before the Budget, ‘We promise there will be no new tax increases – promise, promise, promise there’ll be no new tax increases.’ This was on the same week as they passed an emergency services levy that will rip $3 billion from people over the forward estimates.

This State Tax Bill, as I am led to believe, included the previously announced congestion levy. The Government advised me that the congestion levy would be
included in this Bill, but because the Government wanted to avoid the community’s deep, deep distress about the level of taxation imposed upon them, the Government, as far as I am advised, removed the expansion of the congestion levy from the Bill. In the next sitting weeks – I suspect the next sitting week or the one thereafter – we will see a Congestion Levy bill. So much for the promise of no new taxes. We know that not only was the congestion levy announced and committed to, but the Budget included the increased revenue. The $100 million of new revenue because of that new tax is in the Budget. So, the promise of no new tax is simply not true; it is included in the Budget. All the Government has tried to do, sneakily, is move the measure to impose that new tax from this Bill and presumably to its own bill in a couple of weeks time, which just goes to show the duplicity. But I go back to the point: what this Bill does not do is deal with structural issues in the tax system or the overburdening of tax upon every Victorian.

There is one thing this Bill does do which the Coalition has been calling on for some time, as has been publicly reported; this is not something that I am just saying. It has been publicly reported that the Coalition has been saying over and over again that on land tax domestic violence victims should not be punished for fleeing because of domestic violence. The Government has been sending Bills, including, as has been reported, to one victim in Bayside for fleeing their home because of threats of violence. We had a domestic violence victim who received bills from this Government – and threats if they did not pay – to pay land tax because they had been threatened with violence. How could that be?

For quite some time the Coalition has been trying to get the Government to take this issue seriously. I personally wrote to the Premier seven times. That is after writing to the Treasurer and that is after raising it with the Minister, who obviously were constrained by the legislation as it was. But I wrote to the Premier seven times and said, ‘We have to do something, Premier.’ So, I note that this Bill does seek to do something for domestic violence victims in relation to land tax obligations – it is something. However, I do note that the Amendment contained in the Bill, as far as I am advised from the Department, is not retrospective, so any of the victims who have been sent land tax Bills because they have fled up to when this Bill is given royal assent will not be helped. The Government has said to me they will not be helped. This Amendment will only be prospective. So, we would say to the Government: though we absolutely accept that after being dragged kicking and screaming on this issue there has been some attempt to do something in this Bill, it will not fix the problem that exists for victims who have raised the issue to date, and that is concerning.

The other concern in relation to this particular measure is this measure has a number of requirements around it, as you would expect. When the measure is tested by the Department as to whether or not an exemption exists, one of the tests is whether the person who flees from their property has earned a dollar or anymore from that original principal place of residence, because if they have, they are not eligible for an exemption. This has been a very, very contentious issue, because what we are saying to victims, who we know often take a long time to leave the circumstance they are in and in almost all cases find it extremely difficult to find a new place to live – finding the next place to live, even if it is somewhere safe next, is a very, very difficult thing – is that if you earn a dollar on your primary place of residence you will not have access to redress. Just think this through logically – and when bills are drafted logic very rarely comes into it. What happens in many cases, and cases that I am aware of, is a victim leaves because of domestic violence, and they might have someone, for example, rent their property because they cannot afford the next place to live. They certainly cannot afford to pay for two properties – one they do not live in and the next place that they will live. But what these restrictions say is if there is one dollar earned on that original principal place of residence they are excluded from help.

I appreciate entirely that this is a very complex issue. I appreciate that it is a very difficult issue to resolve, especially with black-letter law. But to have a simple rule that says that if one dollar is earned on the original property a person cannot be exempt from a land tax obligation just does not make sense, because they may need to generate income to live once they flee. What we are saying with these amendments is the victim is now obliged to fund two properties. So, if you leave, you are obliged to fund two properties.

You are obliged to pay rent on your second property or however you choose to live in the property you flee to – you have obviously got to pay for that, you have got to keep it, you have got to pay all the Bills associated with that – and then on the first property you will be land-taxed if you earn one dollar there. I just do not think it passes the logic test.

Of course we would have been open to having a conversation, because we were the ones proposing to close and to help resolve this issue, to work through a better pathway forward. Perhaps it could be by Treasurer’s call; perhaps there could have been a circumstance where the Treasurer has the capacity to say there may be circumstances where someone leaves their principal place of residence and earns a dollar on the property to survive, to have a roof over their head. The Treasurer could make that determination, because they are complex issues, and as I have said, we accept that. But to simply say, ‘If one dollar is earned, therefore they are no longer eligible for a domestic violence exemption to land tax’ is just wrong.

The other thing the Government have neglected – and this has been raised with them many times – is that we are aware of circumstances where people have been forced to leave their homes because of natural disaster and the Government has chased the victims of natural disaster who are living in a second property while their first property is being repaired. We are not talking about people who are trying to fleece the system or do anything wrong; we are talking about people whose homes are either destroyed or partly destroyed. The Government is saying, if you leave your property because of, in most recent cases, flooding – you are forced, you cannot live there – ‘if you leave your property, we’re going to landtax you on that property when you’re living somewhere else.’ How can that be right?

When it comes to the domestic violence issue, we have led on pushing for this Amendment, and we accept that, though not fully formed, there is an Amendment here. But we have also raised the natural disaster concerns, and the Government has said, ‘Maybe we’ll look at it another time.’ Well, here is the Bill right now. ‘We’ll look at it another time’ – when? The Government provided advice that there could be a State Tax Amendment Bill later in the year. Well, there arecurrently victims – I have raised them in the Chamber – who have been forced to leave their home because of flooding, and the Government is trying to Bill them for land tax because they have been flooded. It is not their fault there has been a natural disaster, and yet the Government’s response is ‘Maybe down the track we’ll think about it.’ It is not good enough. On the domestic violence issue, I would reiterate the calls we have made privately and make them publicly too: the Government should consider whether or not the hard and fast rules around the measures are appropriate, because there will be circumstances where it is fair and reasonable for a dollar to be earned on the original property.

I am not in any way saying this is an easy issue, and it may need Treasurer’s intervention. We may be talking only about a handful of cases each year, but I think it is only fair and reasonable for the Parliament, when considering this Amendment, to think about whether or not this exemption properly covers the issues that need addressing. In the case that I have raised – not in detail, because of course we are talking about very, very difficult circumstances – these amendments will not solve that case for two reasons: (1) because of the hard-andfast rules and (2) because it is not retrospective. So, every case which has come to a member of Parliament where land tax is being charged on people because they have fled domestic violence will not be solved by this Bill.

I say: why wouldn’t we want to help the people who have already got the Bill?

Why would we want to help only people in the future? I think it would be reasonable to say this amendment solves a problem in the law. So why wouldn’t we want to work out a way to help the people who are needing help, and why wouldn’t we want to just make sure the details are right and make sure that amendment fully covers them? As I said, it also covers natural disaster, because we know there are cases, as I have said, where people are being charged land tax for being forced to move out of their homes while their houses have been either fully or partially destroyed, and that is just not right. It is just not right.

The other concern we have with the Bill is that in the wording from the Department there is a new measure that has been described as a tax. Now, I know the Government promised no new taxes in this Budget, but the measures in this Bill include, in the Government’s own words, a ‘penalty tax’ measure. I have not included this new penalty tax measure in our 61 new taxes and charges. I think it would be fair to say we could, because the Government has described it as a tax.

A member interjected.

James NEWBURY: This measure is new, Member. This measure is new, and it has been described in the Government’s own briefing as a new ‘penalty tax’ measure. The Government has described it that way. What the Government is seeking to do through this measure is create a new penalty. I was not going to make a big point of it, but as I have been asked, I will have to refer to the Government’s own advice. The Government is seeking to approve a new penalty tax measure that the State Revenue Office can impose, and what this penalty measure would do is allow the State Revenue Office to penalise people for not paying a Bill, effectively. Currently they can impose a 25 per cent penalty tax, to use the Government’s words, or they can impose a 75 per cent tax, and this new measure would create a new penalty tax of 50 per cent. So, it is a new measure, a new penalty tax – I do not want to misquote – as the Government has described to me in writing.

I note that the State Revenue Office issued 15,405 assessments with a penalty tax in the last financial year. All of these were charged at the 25 per cent penalty rate – I suspect because the requirement of imposing a 75 per cent imposition through a tax penalty requires a very serious and egregious form of not paying your required Bill. So far, the State Revenue Office has charged the 15,000 people a 25 per cent tax. If this Bill were to pass, I suspect if we were to have a look at these figures next year, we would see a good proportion of them move into this new 50 per cent penalty rate, because the new penalty rate test will be based on recklessness, which obviously has a common law definition. I suspect what this will do is revenue raise for the State Revenue Office through this mechanism, and they will up the penalty provision, and presumably they have asked for it for that reason. They want a new penalty tax measure, so there is a new penalty tax in this Budget in addition to the congestion levy measures, which are actually included in the Budget revenue, and the Coalition wholly does not support this new penalty tax measure.

So, under Standing Orders I wish to advise the house of Amendments to the Bill and request that they be circulated.

Amendments circulated under standing orders.

James NEWBURY: The two Amendments that we will move relate to natural disaster in the circumstance of land tax, so a victim of a natural disaster should receive an exemption from land tax – it is not fair and reasonable that the Government is land-taxing people who are forced to move from their homes because of natural disaster, so we are seeking to Amend that in a similar way to the domestic violence provision, so it would be in addition to the domestic violence provision – and also we are seeking to strike out the 50 per cent new penalty tax, the new tax that the Government has in this Bill. Though, because they are technical Amendments, we will not be voting on them in the Lower House, I do make clear that these Amendments will be moved in the Upper House, and I suspect and would hope that Members in the Upper House who will have the opportunity to consider this will be able to say to the Government: why is it that people who are being forced to flee their homes because of natural disaster are being land-taxed for it? How can the Government possibly stand up and try and explain that natural disaster victims should be land-taxed because
they have fled their either partially or fully damaged homes? How can that be the case? So, the Amendments will seek to address that issue, as the Amendments will also seek to address the new penalty tax provision in the Bill.

Unfortunately, we do not have the capacity, because the Government does not consider Bills in this way, to take these Amendments to a vote in this place because the Government does not see fit to take any Bill into consideration in detail, as it were, in this place, but in the Upper House Members across the entire Chamber will have the opportunity to consider these issues in detail. Whether or not the Upper House Members consider a new tax fair and reasonable – and I will let that stand where it is – I do very much hope that the Members in the Upper House can look at the Amendment that relates to natural disaster and say, ‘Well, that’s fair. That Amendment is fair. We can’t be taxing people because they’re forced to flee their home because of natural disaster.’ So, I do hope that the Members of the Upper House can look at that fairly and reasonably.

There are a number of other technical changes in the Bill. Many of them we have gone through in detail with the Department, and they have estimated that they
should be of no cost impact, so they genuinely are believed to be technical, and we can only take them on face value. We probably look at any change in a Taxation Bill from the perspective of the Government trying to find a way to close a loophole and make money, so the first question we often ask is: how much money are they estimating it will make? We take the Department at their word that these technical changes will not do that. For example, there are some technical changes around the commercial and industrial property tax reform on qualifying use of land, and there are some changes around sale of trust property being moved between trusts where the owner remains the same, and we understand that in that circumstance there are no additional cost implications. There are some minor changes around unclaimed money and also around the Victorian conservation trust in terms of also providing money.

With all of those things, we take the Department at its word that it will not have anything other than technical changes.

I should note that the Bill does make Amendments to the First Home Owner Grant and Home Buyer Schemes Act 2000, and I think it is important to recognise that yesterday the Coalition committed to a game-changing policy to provide first home buyers with massive tax relief. If you are a first home buyer and you have
not been able to get into the market – as we know, that is certainly the case, as less and less young people are able to get into the market – a future coalition Government will wipe that stamp duty cost up to $1 million. So up to $1 million you will pay nothing. The Government have been saying for the past day that they think more people will want it – good. The Government have been saying more people are going to want this tax cut, and the answer to that is: good. What is interesting from this Government is they are taking cheap shots about how many people want this policy, but I have not heard the Premier say she will match it. Where is the Premier? I have not heard the Premier say she will match it. I am happy for the Premier to tell Victorians every single day of the week how much people love this tax cut. Every single day the Premier and every Minister can talk about this tax cut. You are welcome, Ministry, to talk about this tax cut. You are welcome to talk about how many more people you think are going to take it up. You are welcome to underline the importance of it. Talk about it all day, every day. I want to talk about it.

Talk about our five tax cuts. Talk about our tax cuts every day – more than happy. On the first home buyer tax cut we are proposing, talk about it every single day. Do you know what the estimate was? It was that 17,000 people in a full year would take up that tax cut, and the Government think it may be more – they think it may be 18,000. Fantastic, because it is young people getting into homes. For the Government to say we are going to do nothing, and we are going to take cheap little shots because they think people want it and we are going to do nothing – well, that just absolutely highlights the craven nature of this tax-loving Government. Talk about the policy as much as the Government wants. The difference is we will cut stamp duty for first home buyers significantly, which the Government now says is going to be very, very, very, very popular and taken up. Fantastic – that is the goal. That is what we are trying to do. That is why we designed the policy. Yet what have we heard from the Government? Nothing. Are they going to match us? No. Are they going to match the tax cut? No. The Government and the Premier can talk about how much this policy is needed every
single day of the week. I would love the Premier to talk about it every single day. The Ministry can talk about it every single day, because it is true: people need it. That is why the policy is there. That is why we created it. That is why we announced it. At some point, do you know what is going to happen? At some point, do you know what the community is going to say? ‘Well, what about the Government? What are they going to do? They’re talking about this policy and the need for it all the time. They’re talking about how popular it is going to be, but they are not agreeing to it.’ In terms of the Bill, we are not opposing the Bill. We will be moving the Amendments that we will be moving, but we will not be opposing the Bill.