In Parliament

Matter of Public Importance - Government Agenda


Wednesday 28 August, 2019.

Mr NEWBURY (Brighton) (15:22):

It would be remiss of me not to start by remarking on the quality, or lack thereof, of this matter of public importance. I heard the member for Essendon waste parliamentary time earlier today droning on about being an avid fan of the Comic Sans text font. I make the point that my four-year-old daughter’s birthday invitations are of the same font, and it is clear that those invitations and the member’s drafting of this motion are of equivalent quality.

The purpose of this motion is to boast that Labor is spending a lot of other people’s money and to take cheap political shots. Only recently ratings agency Moody’s fired a serious warning shot. They warned that the government should consider their budgetary and policy approach, but in typical fashion the warning was ignored. Not only was it ignored but the Treasurer doubled down. Moody’s warning should not be overlooked. The warning identified that this government’s profligate spending, its intention to over-borrow and the softened economy will have a compounding effect.

This government was first elected on a commitment of significant spending, a commitment that grew bolder after it was elected. Ever-increasing tax receipts, especially from property, and income derived through privatisation only enthused the government’s first-term spending. But since then the economy has softened and the property market has slowed significantly. Despite those changing circumstances, the government has not moderated its approach. That approach has left a structural hole in Victoria’s budget, one of the government’s own making. Moody’s has recognised this and said the government’s capital expenditure program will cause debt to rise more rapidly than revenue and lead to a credit negative. The state’s forecast debt has increased from a projected $20 billion to $54.9 billion, up by $35 billion. The increase in debt is equivalent to $14 000 for every Victorian household. Put simply—true to character—Labor is spending too much and using the Victorian taxpayer’s credit card to pay for it.

But the government is not just spending too much. To use the age-old political analogy, there are significant policy barnacles forming on their ship. The problems can be traced to enacting policy that is either driven by class-based politics of envy or ideology. We have seen a growing number of examples of both, including with property tax. Land taxes have doubled over the last five years; they are up by 109 per cent. This government has targeted my constituents with new envy-based property taxes, new taxes designed to target those the Treasurer claims can, and I quote, ‘afford to pay’. It was almost Bill Shortenesque to hear the Treasurer so freely admit his envy-based intention. These new taxes are in addition to existing retrograde taxes, taxes that have left bracket creep
go unchecked. The government’s class-based property tax approach is highway robbery.

Only days ago I convened a public forum at Brighton town hall with the Shadow Treasurer. The forum provided my community with an opportunity to have their say. Residents lined up to expose the outrageous property tax increases they have endured. In too many cases residents spoke of a tax system which has allowed the land tax bills of some to increase by between 50 and 100 per cent in one year. The message from them was clear: the current levels of property taxation will force some investors to sell. Many suspect this is the aim of the government’s approach: to force divestment of housing stock.

One of the most aggressive class-targeted measures in the recent state budget was the removal of the principal place of residence exemption for contiguous land. Put simply, this government is now applying property tax to the family home. One distressed elderly couple from my community spoke to me, broken-hearted, at being forced to sell their family home. Why? Because their vegetable garden is now subject to land tax, a tax they cannot afford to pay. In my community there are a number of families who have been hit by this new class-based measure, not because their land is unusually large but because of the historic characteristics of the property, or ways in which the land was subdivided earlier.

Property taxes have not only hurt individuals and families in my community; they have also hurt small businesses. One small business in my community has had their land tax double in one year, increasing from $35 000 to $65 000. They are a third-generation family business that have been operating in my electorate for 75 years. The tax increase, and I quote them directly:

… places our Business under enormous pressure …


… also puts in jeopardy the 25 employees’ jobs…

Another small business in my community has warned that, and again I quote:

… The ongoing viability of our business is in jeopardy …

That business has been operating for over 50 years. They have said, I quote:

… we are now starting to buckle under the weight of land tax to the extent that we have commenced laying off staff and will continue to do so …

Their business is paying more than $4500 in land tax every week—I repeat, $4500 every week—before they open their doors. The business has paid $1.5 million in land tax over the last 10 years. The business owner is genuinely fearful of next year’s land tax bill.

Before this year’s budget I said in this place that the government would introduce new and higher taxes, and they did. Sadly I cannot provide my community comfort because I am certain that over this term we will see the nastiest side of Labor exposed as we see the government find increasingly nasty ways to tax Victorians.

The barnacles forming on this government have also been caused by their adherence to ideology over evidence-driven policy. This is especially the case in the environment and energy portfolio space. As a community we are watching a collapse of the recycling industry and a solar scheme that has had a profoundly punitive effect, especially on small businesses. Another alarming example is the lack of grip the government has on energy security. The Australian Energy Market Operator’s recently released report is sober reading. I quote from the report’s projections for the forthcoming summer:

… all regions other than Victoria expected to meet the current reliability standard …

And that:

… involuntary load shedding may be experienced in Victoria … equivalent to between 260 000 and 1.3 million households being without power …

That means over 3 million individual Victorians. And how did the minister respond to finding out that almost half of our state’s population faces power blackout this summer? She said, ‘We’re in a tricky position’. What an astonishingly trivial response. The minister and this government have been caught out. They have been pushing wide-scale energy market transformation, but they have not developed a practical plan to make it happen. That is why the government needs to do more than set ideological aspirational targets. We need to develop a practical transformational plan. On a state-by-state comparison Victoria is notably behind. Gallingly, the minister admitted that point, when she recently said, ‘We need better planning’. Well, I am glad that the government have recognised their failure, but it is time for the government to do something about it.

It is also time for the government to stop selectively ignoring parts of the Victorian community. The services and infrastructure in my community are out of date and need attention. As I have noted before in this place, earlier this year 83-year-old grandmother Gloria Holmes tragically lost her life crossing over the rail line at Grenville Street in Hampton. Despite Public Transport Victoria identifying the crossing as high risk, two weeks before the last election, safety improvements were deprioritised. It was no surprise to learn that the minister’s office was involved in the decision to deprioritise. After public outcry following Mrs Holmes’s death, three months ago the minister advised that she was seeking departmental advice. Well, we are still waiting.

The secretary of the owners corporation committee at nearby Edgecliff apartments, Terry Walsh, has rightly described the ongoing delay as ‘just not good enough’ and said that the government ‘just needs to get on and fix it’. So far the only response Mr Walsh received from the government on the issue was what he describes as a ‘nonsense letter’ from the Minister for Public Transport. Let me assist the Minister for Transport Infrastructure, who has turned hand-balling difficult issues to Minister Horne into an art form. The independent Parliamentary Budget Office recently costed installing train-activated gates and audible warning systems at Grenville crossing at $2.1 million. The ball is now in the minister’s court; it is in the government’s court. Will this government invest in the safety of Hampton, or will Labor continue to deprioritise my community’s safety?

Moody’s has fired a serious warning shot and warned that the government should consider their budgetary and policy approach, but we know that they will not because it is far easier to boast when they are spending a lot of other people’s money—money being spent on the taxpayer’s credit card—than it is to run a responsible government.