Thursday, 28 November 2024

Bills

State Taxation Further Amendment Bill 2024

Second reading

Debate resumed on motion of Harriet Shing:

That the bill be now read a second time.

Evan MULHOLLAND (Northern Metropolitan) (10:47): I rise to speak on the State Taxation Further Amendment Bill 2024. From the outset I would like to indicate that we are not opposing this bill, but we will move amendments to try to, once again, fix up Labor’s mess. In relation to both the Premier and her leadership over the last decade as a senior member of the Andrews government as well, the critical question needs to be asked: can Victorians trust this Labor government when it comes to managing our economy? When we look at the current state of the Victorian economy – I have said it before and I will say it again – it is an absolute mess. It is a basket case. In no uncertain terms it is a complete and utter bin fire, this economy under Labor. We are currently facing the highest taxes in the country – the highest business taxes, the highest property taxes – and the most crippling debt, which stands at $188 billion, the highest of any state in Australia.

What that means for our future and our children’s future is that we are paying $26 million a day every day just to service the interest on that debt. $26 million could sure buy a lot of things in my electorate. In a matter of a few weeks maybe you would be able to just get on and duplicate Yan Yean Road in the seat of Yan Yean and Donnybrook Road as well, which is important. We would not need 80-kilometre speed limits on the Hume Freeway, which have massively impacted our transport industry as well. This is what it means: when the Labor government wastes, it will tax – it will increase taxes. We know that it will increase taxes because there have been 55 new or increased taxes. When Labor waste, they always introduce new taxes. Somebody has to pay for that, and it is Victorians that are paying the price right across the state. Instead of investing in things that could alleviate the burdens Victorians face every day, we are pouring literally millions into just servicing the debt that has grown bigger and bigger under Labor.

After 10 Labor budgets all we have is debt and fairytale talk about the Suburban Rail Loop, which is stealing much-needed funds from my region to go into a tunnel in the eastern suburbs. When I ask, as I have asked several times this year, about when Broadmeadows train station, one of the largest transport hubs in Victoria, is going to get an upgrade and get off the RACV’s worst train stations list, I get told that – even though Frank McGuire promised it, by the way – that train station upgrade is happening but as part of the Suburban Rail Loop North, which will not get to Broadmeadows, if all their timeframes are to be believed even, until 2052. That is the contempt with which they treat people in the northern suburbs of Melbourne. But they are building an unfunded $40 billion rail line in the eastern suburbs that the federal government has not committed to. That is literally like going to an auction, outbidding everyone else on a property and then going in and saying you have just got to speak to your mortgage broker – ‘I’m still yet to go to the bank to sort out the finances.’ That is what they have done with Victorians’ future. That is going to mean we cannot invest in critical infrastructure around the state like Donnybrook Road, like Yan Yean Road, like the Pakenham community hospital, like the Melton hospital, where I assume they will have to build a second fence around the existing fence they put up a week before the last election saying ‘Melton Hospital coming soon’.

You have run out of money. We see the Labor briefing that the Suburban Rail Loop is sucking up the funding for all available projects. We see the reports about ministers and MPs staying behind after their caucus to speak to the Premier and the Minister for Transport Infrastructure about their criticism of the Suburban Rail Loop, but the members opposite are still too cowardly to call it out publicly. They will get on the blower to a journalist and repeat what happened, and we saw some interesting comments from the minister for infrastructure admitting to Labor colleagues that this project is all about politics. It is all about winning seats in the eastern suburbs. This project had its origins, we know, in a locked room at PwC down the road at tax evasion city. Then it was called the Suburban Rail Loop. It was called Australia’s biggest public transport project. Then they kind of dropped that line and went back to Suburban Rail Loop for a while. Then just before the last election they went to SRL Airport. Wow! That assumed we were getting both the SRL and the airport rail. Instead we have got neither. We definitely do not have airport rail. They had to weigh up, ‘Do we build this eastern suburbs suburban rail tunnel or do we build the airport rail?’ They chose the eastern suburbs rail tunnel over the airport rail, embarrassing all those Labor northern and western suburbs MPs that were out there with corflutes and with DLs before the election saying, ‘Labor’s delivering an airport rail.’ How embarrassed would you feel if you were the Labor MPs in those areas? I know the member for Niddrie should be very embarrassed. They should be very embarrassed by the way in which Jacinta Allan has let them down. You wish they would say it publicly. But now the SRL is no longer SRL Airport. I wonder how much it took to design that logo.

Anyway, they have moved on. It is now Australia’s biggest housing project. I say to the Premier: you cannot put lipstick on a pig. This project is no longer popular. It does not have support. When I go out into the growth areas – I get around my community a lot – and I attend my regular weekly listening posts or markets, the Suburban Rail Loop elicits a response that would be quite unparliamentary for me to repeat here today. I encourage state members of Parliament to actually go out to regular markets and listening posts, because you do not see them, particularly not in places like Wallan. You just do not see them, because people have had a gutful of this state Labor government. They cannot even drive on their roads safely, and yet the government is pouring billions of dollars into a gold-plated rail tunnel in the eastern suburbs while literally everyone else misses out – everyone misses out. The whole state misses out because of Jacinta Allan’s vanity project. Just last week the Australian Bureau of Statistics confirmed Victoria has had the highest unemployment rate in the nation for seven consecutive months. For seven months Victorians have been paying the price for 10 years of this Labor government: unemployment on the rise, wages stagnating, people across the state struggling to find meaningful work. This is not the Victoria that we deserve.

You might have read Tim Pallas’s Australian Financial Review column this week. I know we are a few months away from the comedy festival, but if you need a good laugh have a read of the Treasurer’s Australian Financial Review column: ‘Victoria is an economic powerhouse’ – really? Let us just have a look at some of the things that he said. He said:

… Victoria has created more jobs –

new jobs –

than any other state …

I repeat: for the seventh month in a row Victoria has had the highest unemployment rate in the nation. The unemployment rate is the most relevant statistic as jobs are created simply due to a larger population –

Ryan Batchelor: There are more people participating in the labour market in Victoria by a long way compared to New South Wales, Mr Mulholland.

Evan MULHOLLAND: It might be a bit below, Mr Batchelor, but it does not benefit individual Victorians. Victoria has recorded the second-highest population growth in the past year behind WA. If Victoria had not created new jobs, our unemployment rate would be even higher. Those opposite might not understand economics, but because Victoria has had the second-highest population growth, the unemployment rate is the most relevant statistic. He has also said that Victoria has had the strongest economic growth with real gross state product at 27.4 per cent since Labor came to power. We should be interested in the individual living standards of individual Victorians. It is not the size of the overall economy that is important, it is the size relative to population. Since Labor has been in power the Victorian population has grown by 18.6 per cent. Victoria has achieved an increase in GSP per capita of 10.6 per cent, less than New South Wales and South Australia. In 1999–2000 Victoria’s real GSP per capita was 1.7 per cent above the national average. It is now 11.5 per cent below the national average. Worse yet, Victorian gross household income per capita has fallen below the national average and every state except South Australia. Victorians are obviously struggling under the weight of Labor’s increased taxes.

Mr Pallas also said that a US-style debt ceiling would mean cuts and closures. Labor has literally no way to pay off Victoria’s crippling debt. Labor actually plans to keep increasing debt relative to GSP until 2027–28, after the next election. Debt will increase to $228.2 billion by 2028, according to the Auditor-General. Victoria had a debt ceiling in place until 2018 when it was scrapped by the Labor government. The Liberals and Nationals will legislate a charter of budget honesty, including a debt cap, so that Victorians have confidence that government will end the waste and deliver what really matters to them. We have had independent economists like Saul Eslake backing us up on that in regard to a debt ceiling. We see some ridiculous comments like, ‘The state has delivered the largest infrastructure program ever.’ I saw they trotted out Steve Bracks as well to make similar claims. What we know is they have allowed the CFMEU, bikies and organised crime to run riot on worksites at taxpayer expense. We saw another article in the Age today by Nick McKenzie detailing further allegations. I wonder when the government is going to release the final Wilson review. My guess –and I reckon the betting odds are about $1.10 – is it will be around Christmas Eve or in between Christmas and New Year. You would get pretty good money for that. They are not transparent. We know in several areas there is grey corruption, but particularly when it comes to our construction sites, and there has been well over $40 billion of blowouts.

The Metro Tunnel is the latest bungled major project to see blowouts. Originally budgeted at $9 billion, the project is now estimated to cost $13.87 billion – a blowout of nearly $5 billion. We know the Suburban Rail Loop has already blown out – originally pitched at $50 billion during Labor’s 2018 election campaign. Obviously PwC are not as good at numbers as they are at evading tax, and this is what happens when you do not rely on your departments – not even the department secretary knew about the Suburban Rail Loop one. But what can we expect from this Labor government? I mean, it is estimated the SRL East and North will cost up to $216 billion; the first stage will cost around $40 billion, and it does not even have federal funding for this project. I have seen them come in one after another. They will come in with their speech from Anthony Albanese and quote him saying, ‘It’s the most exciting infrastructure project in Australia.’ Except he said that as opposition leader and has not said a peep about it as Prime Minister. Labor MPs in Labor’s caucus – some of whom might be in this room but most of them in the western suburbs – are right to question it and are right to question what happens if the Labor government is defeated at the next federal election. The Labor government signed billions of dollars in contracts, and I am sure, Acting President Galea, you would much rather see those billions of dollars not wasted but going to important projects in your community, as would the members opposite – we definitely do on this side of the house. But Labor cannot manage money, and of course Victorians are paying the price.

This bill attempts to make access to bulk-billing appointments easier for some patients, and I acknowledge as much, but it does not go nearly far enough. It applies to general practice, not to allied health professionals, which means that services like physiotherapy, podiatry, psychology and even dental care still remain subject to this punishing health tax. This remains a significant issue, and I know right now that the burden of this health tax will force many medical professionals to either raise their fees or close down altogether. I was recently at one healthcare facility in Roxburgh Park for Christmas carols, and they are a great allied health provider. They provide NDIS services, aged care services and home care services, but of course they are affected by the health tax in a big way. They were very pleased to hear that the Liberals and Nationals have made a commitment to repeal the health tax in full. It ought to be repealed in full. This is going to move more people to emergency departments. If you are in Melton, are you going to go to the fence they have put up, saying ‘Melton Hospital coming soon’? This is a bad tax, but of course when Labor waste – and they have wasted a lot – they increase taxes. There are 55 new or increased taxes. It is Victorians that are paying the price, and this is the way that they are paying the price every time they go to a health service. We will be moving some amendments to this bill to try and make it better. As I said, we are not going to oppose it. I am happy for those amendments be circulated.

Amendments circulated pursuant to standing orders.

Evan MULHOLLAND: I will just go through and explain our amendments. On clause 1 they amend one of the purposes of the bill to reflect the amendments that seek to amend the Payroll Tax Act 2007 to provide a full exemption as opposed to a partial exemption, as is currently included in the bill, from payroll tax on a GP’s wages. It amends the bill to provide that a GP medical business’s wages are exempt for the purposes of collecting payroll tax, not merely partially exempt. It removes the formula for determining partial exemption of a GP’s wages from payroll tax. It updates the clause numbering to reflect the removal of subclause (2). It removes redundant definitions as a result of the removal of the partial exemption formula for the rest of the amendments. You would think that would be something that this chamber would support. I know Dr Mansfield has spoken about these issues as well, and I urge my crossbench colleagues to support these kinds of amendments.

This kind of stuff happens when we have got a government that cannot manage money. Labor have been in power and Jacinta Allan has been sitting around the cabinet table for 10 years now while they have wasted billions and billions of dollars, and now they have turned Victoria into an economic basket case – so much so that you have got Labor MPs at war with each other, being told to cap the amount of funding for their electorates and that they are not getting their pet projects. Ministers have been told to cut down their budget bids. They have been hit with a truck named reality in regard to this. It is quite clear that the Treasurer Tim Pallas, who created this mess, is not the one to fix it. Jacinta Allan sat around the cabinet table creating this mess. She let the CFMEU run riot on construction sites, fleecing taxpayer dollars, extorting and using illegal coercion, which has led to over $40 billion in budget blowouts on infrastructure projects, so she is not the one to fix it either. After 10 years of Labor all Victorians are paying the price. A Liberal and Nationals government in 2026 will clean up the mess. In Prahran we will start the change we need in order to get Victoria back on track.

I just want to run through some comments about the Victorian economy. We know Saul Eslake is a respected economist that has worked with all sides of politics throughout his career. He said that Victoria:

… now ranks alongside South Australia and Tasmania as “cellar-dwellers” in terms of relative economic performance …

…

Victoria’s per capita gross product has declined from 1.7 per cent above the national average in 1999–2000 to 11.5 per cent below the national average in 2023–24, ahead of only South Australia and Tasmania.

…

… Since the turn of the century, labour productivity in Victoria has risen at an average annual rate of 0.8 per cent per annum, the slowest of any state or territory, and well below the national average of 1.1 per cent per annum.

I want to quote the Australian Financial Review:

Victorian households are further behind on their mortgage payments than those in any other state, passing Western Australia for the first time in at least seven years, according to new data published by S&P Global Ratings on Wednesday.

…

Victorian postcodes take out five of the … top 10 locations for mortgage arrears …

Unfortunately, about a place where I spend a lot of time, it says:

The … northern suburb of Craigieburn topped the list, with almost 3 per cent behind on their repayments, while Burnside, Pakenham, Point Cook and Hoppers Crossing were also in the top 10.

I have been to all of these places recently and am out and about in all of these communities. I tell you what, things like the GP tax, they know about; things like plunging everything into the Suburban Rail Loop instead of providing cost-of-living relief, they know about; and things like budget blowouts, they know about. Things like CFMEU corruption and illegal coercion on construction sites, damn well they know about it – ask anyone who has driven on Mickleham Road or Craigieburn Road if they know about CFMEU intimidation tactics.

Another report says:

… economist Saul Eslake, in a recent audit of Victoria’s economy for The Australian Financial Review, found household income had fallen below that of Tasmania for the first time.

Richard Welch interjected.

Evan MULHOLLAND: Behind Tasmania. The report continues:

“It ought to be embarrassing for Victorians that it now has lower per capita income than Tasmania …” Per capita gross product has declined from about 2 per cent above the national average 25 years ago to 11.5 per cent below.

It is little wonder so many businesses are thinking twice about Victoria, and this is a sad state of affairs. We should be a state that people want to invest in, that people want to come to. We should not be embarrassed to be Victorians anymore. I am a proud Victorian, but it is embarrassing to be Victorian under this government. We need to restore pride in our state, which means we need to increase investment in our state. I want to note another comment, as the report continues:

Brian McNamee, chairman of Melbourne-based biotech giant CSL –

who I actually visited recently in Broadmeadows –

told The Australian Financial Review that fund managers had said to him Victoria was “uninvestable” given the scale of what they saw as reckless fiscal mismanagement.

‘Uninvestable’, Victoria is. It goes on:

This view aligns with that of Australian Industry Group boss Innes Willox, who believes Victoria “has given itself a reputation as a notoriously difficult and unattractive place to … do business”.

We have seen so many examples of this. Certainly there are the manufacturers of the northern suburbs who talk to me quite a bit about the government’s energy policies surrounding the use of gas, and communities across Victoria are concerned about the government’s hostility to gas projects. It is hostility to business in general, because on that side of the house what experience have they had with running a business? What experience have they had with setting up a business? What experience have they had employing people – employing people in your own business, running a business, to understand them? They do not understand them. They see hardworking business owners as a piggy bank, so they can collect it all to go into things like the Suburban Rail Loop in the eastern suburbs. They see mum-and-dad property investors as a piggy bank and through their massive land taxes have basically set a de facto one property per person policy here in Victoria. Propertyology and other investment firms are telling investors in Victoria, ‘Don’t you dare invest in Victoria; it’s not a good investment,’ and people are selling up here and investing in Queensland and investing in South Australia. It is the same with manufacturers and big civil firms, which are getting calls from ministers and secretaries of other governments saying, ‘Come over to our state,’ because they realise that Victoria is a basket case. Businesses can be poached from Victoria and treated a lot better interstate than they are here.

This is why I say Victorians do not want to be embarrassed to be Victorian anymore. Victorians want to be proud of their state. I love Victoria; I love this state, but Victorians do not want to be embarrassed to be Victorian anymore, and we are under this government – with $188 billion of debt and with businesses fleeing the state. It is shameful the way this government has taxed Victorians with 55 new or increased taxes, and it has made Victoria uninvestable. ‘Uninvestable’ is what Brian McNamee from CSL said – similarly, Innes Willox. It is really hard to invest in Victoria. New taxes are not the way to go. Victoria needs to have pride in itself again, but it cannot under this Labor government. After 10 years, if there is anything we know about this government, it is that they cannot manage money, and Victorians pay the price of their incompetence and mismanagement. It is a shameful government. Tim Pallas has created this mess and Jacinta Allan has created this mess – and they are not the ones to turn it around.

David LIMBRICK (South-Eastern Metropolitan) (11:17): I also rise to talk on the State Taxation Further Amendment Bill 2024. Again I find myself in an uncomfortable position. I thank the Treasurer’s advisers for their consultation with my team on this bill, but I find myself in the uncomfortable position that we have the third government tax bill in a row that I cannot really oppose. This bill does a lot of things. Some of them I do not like. I will start with one that I do not like. It is the removal of the exemption for friendly societies from certain duties. Apologies to my ex-colleagues in this sector, but this will be a rather minor impost, is my understanding. The main significant thing of this bill of consequence which will have a positive effect is the clarification of payroll tax arrangements for GPs in Victoria. Effectively it will give payroll tax exemptions to GPs, with strings attached. A string is that the proportion of their patients that are tax exempt must be bulk-billed. I understand that the opposition has amendments to make this exemption universal, and I signal that I would be supporting that amendment. However, the net result of this will be effectively a tax cut, and therefore I cannot oppose it – so well done to the government.

But I agree with my colleague Mr Mulholland that this state is in a dire financial situation with debt rising out of control. There are very few opportunities for the state government to raise new taxes. They have gone hell for leather with land tax, and that is turning out to be a bit of a disaster. It is disincentivising residential investment for rentals. In the south-east I have spoken to many factory owners who are finding enormous increases in their land tax bills, and they are looking at scaling back operations or moving interstate. Some of them are even looking at shutting down, which is extremely sad. As has also been mentioned by Mr Mulholland, as that is happening in conjunction with inflation pressures and energy costs for these manufacturers, many of them just cannot survive, which is a very sad thing. I am very supportive of our manufacturing industry in Victoria and I wish we would see more investment in manufacturing in Victoria, but the government does make it very, very hard.

The government cannot raise lots of new taxes, because really they have sort of hit the other side of the Laffer curve for a lot of these. We have seen it with the port tax that they tried a while ago, which was going to result in less tax revenue when they raised that tax. We saw it with the federal government when they tried to raise taxes on tobacco excise. They are actually losing tax revenue because we are on the other side of the Laffer curve. Many of these taxes you simply just cannot raise any further. They will dampen economic activity to such a degree that you will not actually get more tax revenue.

So how do we deal with our economic situation? The government has to cut spending. I would like to offer a constructive suggestion to the government. Rather than smack them around and stuff like that, I will offer my services. I think that what Victoria needs – and I know that my colleague Mrs Deeming has spoken about this – is a DOGE. We need a department of government efficiency, and I put it on the record right now that I will volunteer my services. I will not ask for any extra pay in excess of my salary. I know the government do not want people attacking them, because if they make big cuts they get all sorts of people upset. They get the unions upset. All sorts of people will be upset. Well, I will volunteer. I will be the bad guy. I will work with the Treasurer and his staff – he has very good staff – to come up with ideas to make this state more efficient.

I note that the very interesting thing that has happened with the DOGE in the US when Elon Musk has been talking about this is he has talked a lot about 80 per cent. Those people who have been in business would know about the 80–20 rule. For those unaware, the 80–20 rule says that 80 per cent of the value of your enterprise comes from 20 per cent of the effort, and then the rest, the 80 per cent, makes only 20 per cent of the value. Therefore, to maximise efficiency you can maintain high productivity by retaining the 20 per cent that actually provides that productivity. I suspect that if we look at it in a lot of detail there are a lot of productivity gains to be made in the public service in Victoria. The idea that they are running highly efficiently and without any waste is fanciful. I imagine even the government would agree with me on that – that there are lots of areas that could be looked at.

I note also that the government is looking at getting out of certain businesses, which I think is a good thing. I said yesterday that I have no idea why the state government is in the broccoli and cauliflower business. It seems rather anachronistic, and I am glad that the government is looking at getting out of that business, because it makes no sense. In fact this is a good example of the government trying to do too much. They cannot really do it that well when they try and do too much. I would urge the government to focus on the important stuff – focus on law enforcement, focus on delivery of roads and health services and these other basic things – and with all the other stuff that they do, try and get out of it, stop doing it, because a lot of times it is really not necessary. Broccoli and carrots – why are we in the wholesale vegetable business? It just does not make any sense at all. It should not be a function of the state government to have anything to do with that, and I am glad that the state government has recognised that.

I have got some other ideas that might be able to save money. I do not think the government has been thinking about this one, and so I will put it forward as a constructive suggestion: train stations. I know that they are developing some of the train stations as activity centres or they already are – ones like Box Hill and Glen Waverley. I am actually a big fan of the area around Glen Waverley. If you go down to Kingsway on a Saturday night, it is actually a really great place. It is better than going out in the city actually. It is pretty safe. There are lots of nice restaurants and clubs and everything. But there are a lot of train stations around the city where all you see is an empty car park and a couple of bored-looking PSOs. The only economic activity you will see, if you are lucky, is a vending machine, although you often do not even see that. This just seems like such a waste to me.

I did a lot of study on this on my last trip to Japan; I actually made a video about it. Lots of people recognise the Japanese train system as the best in the world, but what they do not realise is that the reason that it is the best in the world is because it is fully privatised and the government has very little to do with it. A lot of people are also surprised at how they make their money. The train companies do not make their money out of train tickets. In fact they barely break even, and in some cases they make a loss. What they really make their money out of – and I am sure the government knows all about this with the SRL – is real estate, both commercial and residential. What they do is they set up a new train station in an area with little development, like some of the train stations with empty car parks and bored-looking PSOs, and they develop them. I would urge the government to look at this, because I imagine there are lots of companies that would be interested in developing train stations and putting commercial things there or apartments or all sorts of things. If you go to Japan and look at the train stations there and what they have around them, they build entire economic centres around the train stations. As you go home from work you can buy a gift for your family. You can buy some takeaway on the way home. There might be a little bar; you can stop in with your mates and have a drink and all sorts of things on the way home – much better than a Coke vending machine at exorbitant prices. I think that this would be a good idea, and I think that there would be companies that would be interested in investing in this sort of thing. So I think that that is a good thing.

Another constructive idea – and I know this is sort of in the decision-making process at the moment; I have spoken about this many times and I spoke about it yesterday – is the Hydrogen Energy Supply Chain project in the Latrobe Valley. I strongly urge the state government to get on board with this, because I think it is going to be a fantastic project. It will result in billions of dollars of investment in Victoria. It will result in a new energy production facility here, which we need more of, and also an export market. Of course the Treasurer will be happy that they will be getting lots of new taxes. They will even be getting some brown coal tax, I think, from that one. Also they will be getting payroll tax and all sorts of other taxes that I am sure the Treasurer will love. But on top of that we will be getting foreign investment and new production facilities in this state, which is exactly what we want. We need foreign capital in this state. We need people to invest here. I agree with Mr Mulholland – I want Victoria to be a place to invest, a place where people want to come and live, a place where people want to set up factories, want to set up energy production facilities and want to set up service businesses. This is what we want in Victoria, and high taxes will not create it.

I know we are not talking about many of these taxes today, and I wish we were, but it is good at the very least that we are not going to send doctors bankrupt here through making them pay extra payroll tax. I give credit to the Treasurer that he has used his powers to waive taxes for GPs that may have discovered that they are liable for these taxes that they did not believe they were liable for. I give credit to the Treasurer for that, and I also give credit that they are coming up with a solution, although I do not like the strings being attached. It is unfortunate that with everything that the government do they try to push and control and manage everything and stick their fingers into every sort of activity. I wish they would just step back and let the market work properly – how it is meant to. Nevertheless, they are still allowing a proportion of doctors’ patients to be seen without paying payroll tax, so that is a good thing. The Libertarian Party will not be opposing this bill.

John BERGER (Southern Metropolitan) (11:29): I rise to speak on the State Taxation Further Amendment Bill 2024. This bill sets out a plan by the Allan Labor government to make sure Victorians are put first always – not foreign companies and not those who would otherwise try and shove aside hardworking families. This amendment bill also makes changes to the state’s land tax, which has helped Victorians weather the pressure of the housing market better than other states. The reality is clear. CoreLogic found just a couple of weeks ago that Melbourne continues to be a leader in fighting the global pressure on housing markets.

Year on year the price of any kind of dwelling in Melbourne has dropped nearly 2 per cent. That makes Melbourne one of only three cities keeping housing prices down for first-time home buyers, with Hobart coming in second place at 1.2 per cent and Darwin basically breaking even, being down 0.1 per cent. We are building more homes, and we are doing it faster. We all know about our landmark housing plan, and this bill adds to it, because we know we have a lot of work ahead of us. This is the direct impact of the state’s land tax reforms, which redirect investment towards productive assets and projects such as in the commercial and industrial sectors of our economy, where there are land tax exemptions. That is probably also why Victoria’s economy is one of the strongest in the nation. It is thanks to the hardworking Victorian people, the people in my community, that we have stronger economic growth in real terms than New South Wales, Tasmania, Queensland and Western Australia. This is because of good, strong investment in the productive corners of our economy from firms both domestic and foreign. This bill also will amend state taxation legislation to introduce an additional surcharge levy on property and land subject to land tax specifically for foreign purchasers. This clarifies certain legal and legislative arrangements which have conflated the role of national and state taxation regimes, ensuring that it is clear who is responsible and that foreign purchasers are certain of their obligations.

This bill also includes provisions to exempt medical practitioners and centres from payroll tax – to a point. This will help ensure the financial viability and stability of smaller general practices with a large number of staff. Payroll tax is incredibly important to the state’s finances. It contributes about $10 billion a year in revenue for Victoria or just under 12 per cent of this year’s projected gross state product. This is no small amount. Keeping a strong and consistent revenue base is crucial to a healthy budget. It is good economics, and it is good governance. Do you know what I think cuts back access to universal healthcare for ordinary Victorians? Cutting $5 billion to $6 billion in funding from regional hospitals. That is exactly what those opposite promised to do within two years when they were led to a resounding defeat by the member for Bulleen. But the opposition will fold their arms and turn a blind eye to their own policy agenda and then wave their fingers at the payroll reform for general practitioners. This taxation amendment is not aimed at cutting away at universal health care, as a member in the other place alluded to, but at amending our taxation settings appropriately to reflect the needs of the economy and the needs of the people.

As we head into next year it is important to know the current budget delivered by the Treasurer some months ago projected the state’s return to an operating surplus of over $1 billion. In that scenario it is clear the answer is not to extensively wind back our state’s few tax revenue sources but to modernise them for current circumstances. A clear example is our reforms to stamp duty and land tax in regard to industrial and commercial property sites. This Allan Labor government acted decisively to ensure it reformed the state’s taxation system to promote more economic activity while ensuring a healthy stream of state revenue. That reform pulled away the inefficient duty on transactions for commercial industrial properties and replaced it with a low-level levy on the valuation of the property. That obviously has some strong benefits – namely, it does not distort the market for new commercial properties as much and provides the state with more secure revenue that is not based on how many commercial properties were sold that year. Similarly, we will strengthen our tax base with these amendments to make sure they do not overly hamper economic activity but also provide the state with a strong, consistent revenue base to continue functioning.

This amendment bill will further reform land tax in regard to what kinds of properties are up for taxation. Previously it was crystal clear that land tax was to apply to investment properties and clearly excluded space for primary residential properties, which was not to be taxed in a similar way. This further amendment bill changes that to allow for the family holiday home not to be subjected to this levy. This means that if the home is occupied by a family or family member for at least four weeks of the year, then it is not subject to the same charges as someone leasing out a property as a primary income source. Another important change in the amendment bill is the exemption of housing properties used for the relief of poverty from broader land tax charges. That would reference a property or a string of properties that are not residential or investment homes. It would be applied to homes which are by their nature and purpose designed for helping those in poverty.

Think of charities, shelters and other similar projects that are not there to make money or to draw rent and revenue. Their purpose is to provide shelter of some kind to those struggling to turn anywhere else. It is these sites that provide a sanctuary for those who are the most in need and who are looking for anywhere to sleep at night. These sorts of properties will now be exempt from the land tax and charge. It will allow them to continue to do the work that looks after so many lives in so many ways, shapes and sizes. There are so many well-spirited, good-intentioned people in Victoria, all who give up their time, their labour and their energy to make sure that others also have a place to call home. This amendment bill will make sure that organisations like that are not ultimately taxed on their land valuation and forced to move. If the land in question is not yet developed for that purpose, the charitable organisation with custodianship over the land to be used for future development can seek an exemption from land tax for two years. There are of course nuances to this. The presiding commissioner, for example, will have the authority to apportion the land so that parts are exempted and parts are subject to land tax with prior requirements, such as instances where half of a property is used for charitable purposes and the other half is used for non-primary residential.

This is a comprehensive bill which makes the necessary amendments to all factors. They touch all different aspects of our state revenue sources, and they uphold the two fundamental principles I have already set out today. They will promote economic activity on the one hand, and on the other hand they will ensure the taxes bring in revenue on a consistent basis with lower fluctuations compared to a blunt force like excise duties. It is a wideranging piece of legislation that will, I am sure, provide positive yields and benefits for the community, particularly my constituents in Southern Metro. The Allan Labor government is investing in my community with new housing projects and investments into health, rail and education, all of which are possible through the sensible economic management of this government.

When the coalition were in government, they ran deficits in Victoria and ultimately fell apart, struggling to legislate through either house. Prior to the pandemic this Labor government had surpluses and invested heavily in our communities, with big projects transforming Melbourne, and of course we did all of that while cutting taxes. We have cut and reduced taxes 64 times since coming into government and maintained these strong services. The coalition, on the other hand, had to increase our taxes 24 times, only to still fail at snagging a consistent surplus under their belt. So before those opposite stand up and lecture us on taxation policy, they should just sit back and have a bit of self-reflection. If I fumbled the state’s finances that poorly, I would not be lecturing a successful government on how to best manage a surplus.

These tax amendments are considered reforms which take communities’ interests into account and make the right decisions that guarantee a stable and stronger future for our state. Whether it be exempting properties with charitable status, assisting those in need of poverty relief or exempting someone’s non-commercial holiday home, this bill excludes the state’s land tax charges for more types of properties. It also makes amendments to payroll tax provisions for medical clinics, such as for GPs with a number of staff on hand. This is a more considered approach than managing our whole system at the most immediate local level, by having reforms in place which will allow these GPs to remain commercially viable. The coalition as usual will kick up a fuss about all of the changes to the taxation arrangements in this state, but I would not give it the consideration they expect. We have delivered the strong outcomes Victorians expect, and our state government will continue to act in their best interests. These tax reforms are moderate and considered, and they take into account the needs and concerns of the community and respond to them adequately to ensure people do not feel punished.

We can also act to direct investments in productive parts of our economy. The Allan Labor government and the Andrews Labor government before it have transformed Victoria for the better. It feels quite far in the past now, but when we were first elected in Victoria it was very much a different place. Car manufacturing was on the way out and the coalition slumped the economy. The naysayers were telling us we could not remove level crossings. They were saying that this, that or the other could not be achieved realistically, and in every case we defied expectations and delivered on what matters. We are on track in Melbourne to house the same number of people by 2050 as London does today. I am sure many of us have visited London at least once. For those who have not, I can assure you it is going to take us a lot of hard work, but if we take to it we can have the right outcomes. We will not get there overnight. It will take some meaningful, incremental steps to set us in the right direction. Our land tax arrangements are a powerful way of directing capital investment to the places that matter, free of stamp duty for commercial properties, and ensuring businesses are freer to grow in Victoria by having provisions in place.

As well as prioritising Victorian homebuyers over foreign property magnates, we are giving Victorian renters and first-time homebuyers the attention they need right now. We know it is tough to secure yourself some housing and to keep a roof over your head. The Premier has said on numerous occasions that her priority is to make sure millennials get to fulfil the same dream as people like me – to own their own home. But we cannot do that if people are consistently being undercut or overbid by foreign property owners. That is why the government has these provisions in place. They do not ban people from abroad from investing here, but we incentivise people to invest in Victorians first. That is why these reforms are so important. At their core, they put Victorians first and they invest in what really matters to them. The tax system encourages investment in their jobs, their communities, their local infrastructure and their schools, and the list goes on.

We are modernising our tax base so that we can continue to deliver on these important investments and give Victorians a better future, which is important. We have a steep task ahead of us. I think it is important that we act now to make sure the settings are in place to compound this in the long run so Victorians are prepared for that future. These are reasonable amendments and reasonable policies which deliver what we need as a state – they deliver a more secure and consistent revenue base and encourage investment where we need it. That is the record of the Allan Labor government, and I am proud to support it as we continue to deliver on what matters to everyday working families. I commend the bill to the house.

Melina BATH (Eastern Victoria) (11:42): I am pleased to rise to make a brief contribution on the State Taxation Further Amendment Bill 2024, noting that the Nationals along with the Liberals are not opposing this bill. It contains some improvements to the system, but it certainly does not go far enough. One of the key issues that this bill addresses is that it formalises Labor’s payroll tax on general practitioner clinics, but it only introduces a partial payroll tax exemption on bulk-billing for GPs. We wish to see that extended, and we have prepared an associated amendment for that. This is a tax amendment by Labor – with this partial payroll tax exemption – that apparently up until now did not exist. We heard the Treasurer and the Minister for Health in the past repeatedly say there were no changes to payroll tax for GPs, yet this bill in the house today suggests otherwise.

I remember last year reading that the Royal Australian College of General Practitioners were highly concerned and highly distressed, naturally, for their members but also about what this would mean for service provision – for health care – in Victoria. Indeed my focus, and that of the Nationals, is always on rural and regional Victoria. The tax grab was described at the time by the Royal Australian College of General Practitioners as ‘the biggest existential threat to general practice’ in Victoria. That is an indictment of a system that is under stress at the best of times. There was great concern that if they were nearing retirement age, this sort of taxation retrospectively applied would push people into early retirement.

In many of our regional centres, there is only one doctors clinic. You are very, very lucky in a town if you have got two or more, depending on the size, but many absolutely struggle to find doctors to serve their communities. They are like gold – they are an incredible asset. We were in Emerald the other day at an upper house inquiry into climate change resilience – I know my colleague Mrs Broad was there – and we heard from a doctor who was from Monbulk. He has been there for I think 16 years. He does not live on the mountain – in the town – but the community spoke very highly of him and his work, and of course it is reciprocated. He spoke so intensely of care, not only for the physical wellbeing of his patients and the community but also for those connections that they form over many years. That is just one small example. It is shocking in this government’s addiction to taxation that that person is an example – I am not saying that he is – of someone who would be a huge loss to the community should early retirement be the only option. Indeed one of my Gippsland GPs – and there have been many that have come into my office and written to me over time, particularly last year – was going to be forced to close due to this tax burden. Therefore, what does that mean as a flow-on effect to our emergency departments and also in terms of health outcomes for Victorians?

If I go and think about Wonthaggi and some of the GP practitioners down there – of course it is a really big centre; it is really a vibrant place – there are limited GPs. I know recently a number of constituents wrote to me and spoke about how the emergency department is often flooded, overloaded with patients. Why? Because they actually cannot get into their GP, and the waitlist is so long that a case that might have been a reasonably benign or a non-critical case, after waiting for a number of weeks to get into a GP, can end up being quite critical and having to go to emergency. Anything that a government would do to put a further impost on GPs is just unthinkable.

Here we have a bill that is going to provide for a partial exemption, and I note that my colleague Mr Mulholland will move on behalf of the Liberals and Nationals amendments for a full exemption for payroll tax on GP wages rather than the partial one, and I ask the house to support them. If you want to be fair dinkum – given some of the healthcare concerns that we have, as I have just outlined, in this state – then provide that certainty and provide a full exemption. The bill also proposes some other changes in relation to repealing tax exemptions for friendly societies and ensuring an enforceable foreign purchases additional duty. It also provides provisions for land tax exemptions for alpine resorts and transitional exemptions for a holiday home after an owner’s death. I note in recent times media articles about the fact that the government may well be looking to sell off both the Lake Mountain and the Mount Baw Baw government-owned facilities into private hands. Again, this shows that the government is not only strapped for cash but in a diabolical state.

Let us talk about what this government has done. Let us talk about its 55 new or increased taxes in the past year, and I think that is the exact opposite to what the former speaker was portraying. This of course is incredibly impacting the cost-of-living crisis that we have and the burden that Victorians are facing. Let us look at the balance sheet. Often how do you judge a state’s finances? By looking at two measures: state debt and gross state product. Indeed we have heard, unfortunately, a revised magnitude of projected debt by 2028 – I think the Victorian Auditor-General’s report came up with the revised estimate – of over $200 billion, with a ‘b’, by 2028. Of course that would be more than $26 million per day, more than a million dollars an hour in interest repayments. $26 million per day would provide 128 ambulances. In fact if we look at the yearly salaries, it would be over 300 nurses’ annual salaries, over 500 Victoria Police annual salaries – and boy, are they being ignored by the government at the moment – and over 300 paramedics. What does this equate to, this forward projection of $200 billion? It is 22 per cent of our gross state product, our GSP. That is well above the average of other states at 11 per cent. I have spoken with our fantastic and well-loved former Leader of the National Party, Peter Walsh, who has often said that when they were in government back between 2010 and 2014 there was a consideration in the Treasury and certainly in the government of the day that gross state debt should be not too much higher than 6 to 7 per cent of GSP. Yet now we have got a debt that is just ballooning to alarming proportions. I am now a grandmother, and it is my granddaughter’s grandchildren that will have this burden for us.

I also want to briefly speak about the housing issue, the importance of housing in our regions and the fact that this government is certainly nowhere near cooee of coming up with 800,000 houses over the next two years. Indeed we know it is around 57,000, I think, built this year. Certainly closing down a timber industry does not aid that, with higher importation costs and poorer quality into the bargain. But of those 55 new and increased taxes, 29 of them – 29 over the past 10 years – are property-based taxes. One of the taxes that we have seen is the land tax threshold reduction. This government has reduced the land tax threshold from $300,000 down to $50,000. I note that this change has certainly caused a financial impost and a financial hardship for many people facing that land tax bill for the first time. It is around that $500 to $1000 mark. The Treasurer Tim Pallas actually admitted that every Victorian household would have an extra $1300 based on this tax. Victorians are being punished for this government’s own mismanagement at a time when they can least afford it.

We have also seen increased land tax rates. So alongside the lowering of that threshold the government has increased the land tax rate above the $300,000 threshold, and this has added a further burden on property owners, contributing to this cost-of-living crisis. We have a significant rental crisis, and I know my colleague was talking about this only the other day – I think it was you, Mr Mulholland – and also Mr McCurdy was talking about the change in rental bonds and the fact that they had gone down in the last 12 months by 6000 rental bonds. Of course the cost of each rental bond had gone up, so that says that, sadly, mum-and-dad investors are leaving the market. They cannot afford to cope with these additional taxes. They are leaving the market, so not only are the lines getting longer to view an open-for-inspection rental property but they are becoming more expensive. How can people rent and afford to put away money to save for their own home? It is becoming more and more challenging for Victorians to own their own home.

The introduction of stamp duty on off-the-plan purchases has made it more expensive for people to buy new properties. I was speaking last week with property developers, and they were highly passionate and had a lot of skin in the game. They have been there for a long time, and they were pulling their hair out in relation to some of the imposts that this government has put on them and on the market and therefore on regional developers and potential house buyers over the last 10 years. They spoke about development costs; land taxes, as I have gone into; and the negative impact on the market. Less homes are being built in our regions. For many people, rather than paying for a house and land package where about 35 per cent to 40 per cent of that package of house and land happens to be tax – tax, tax, tax – what they are doing is buying old homes, for example, in Wonthaggi, and one of the property developers was speaking about this, and renovating them. That is great, but it is still then taking them off the market. They are not putting the focus on new homes; they are taking them off potentially a rental market. Again, we saw that in the statistics.

Also, they raised the fact that this government is ignoring some very important stakeholders, like the Real Estate Institute of Victoria. They feel that they are being shut out. They have skin in the game and they have knowledge, yet this government says, ‘Don’t talk to me.’ It is not on track in relation to the housing statement – a statement by any other name. I will leave my contribution there. In doing so, as I said, the Nationals will not be opposing this bill. We ask people to support the Liberals and Nationals amendment. It is a very sensible one. It is actually focusing on supporting GPs, not only in the city but all across Victoria and in regional Victoria.

Tom McINTOSH (Eastern Victoria) (11:56): I rise to support the State Taxation Further Amendment Bill 2024. I want to thank my colleague Mr Berger for his contribution before. I note that the bill will fulfil a commitment made by the Allan Labor government to provide an exemption from payroll tax for payments to contracted GPs and to employee GPs who are providing bulk-billed consultations from 1 July 2025. I have during this debate listened to some of what has been offered by those opposite. It has been full of negativity, as can be expected from the noalition over there. They have been absolutely true to form. They have talked about a variety of particular economic items. Of course they failed to mention where unemployment was the last time the Liberals were in power. We know that they will slash jobs if they are ever given the opportunity to run this state, we know that they will cut services, and we know the impact that this will have on Victorians. When last in government those opposite did not deliver any major infrastructure. It was never an intention, it was never something they thought of, because they have no values, no policies and no plans to deliver anything for Victorians.

I do not even know why they are here. They do not even believe in government. Their Reaganism and Thatcherism in their uni student days has brought them to this place. The Institute of Public Affairs delivered Mr Mulholland into this place. I do not know if they write his notes. Mostly what we hear is about how talented you are and how hardworking you are, Mr Mulholland, but why don’t you put your money where your mouth is? We know you think you are leadership material. Why don’t you run for Prahran and put your money where your mouth is? You are that confident; run for Prahran. See how you go, mate. We will absolutely back you. We will absolutely see how you go. Mr Mulholland, if that fails, if they have a remake of Edward Scissorhands I reckon you would be the perfect fit. We know you will cut, cut, cut if you ever get your hands on the lever, you lot. You do not care about education and the massive investment this government is making in early education, in primary schools and in high schools – you could not care – or the new hospitals we have built, the pay and conditions for our healthcare workers, or what we are doing for women’s health. You lot could not care about that one iota – or about the investment we have made in infrastructure, public transport, roads or rail. You lot would not touch it. You would cut, cut, cut.

Georgie Crozier: You’re desperate.

Tom McINTOSH: You are absolutely desperate, because you have got no plans, no policies and no values to put forward to Victorians – nothing to present to Victorians – because you are full of negativity, nastiness and divisiveness. You will divide Victorians, because that is all you are capable of, all you are confident of. Victorians deserve the investment in them to ensure they have the jobs.

Business interrupted pursuant to standing orders.