Thursday, 28 November 2024

Bills

State Taxation Further Amendment Bill 2024

Second reading

Debate resumed.

Tom McINTOSH (Eastern Victoria) (14:22): It is about 2½ hours since I left off, so I will just recap a couple of points that I was making. I will not quite bring the energy I brought before question time, because I am sure those opposite will not want to hear it. They will not want to hear about their negativity, their slashing and the cuts that they will make if they ever get the opportunity. I did acknowledge the contribution Mr Berger made before the lunchbreak as well and appreciate that, and I recommit my support for the State Taxation Further Amendment Bill 2024. I touched on the fact that it fulfils a commitment to see the exemption from payroll tax for payments to contractor GPs and to employee GPs for providing bulk-billed consultations from 1 July 2025.

The government announced back in May that the Allan Labor government was working with other Australian jurisdictions to support our general practitioners to provide more bulk-billed primary healthcare consultations for families. Following extensive consultation with the primary care sector and work to align settings across the country, the government announced that all Victorian general practice businesses will receive an exemption from any outstanding or future assessment issued for payroll tax on payments to contractor GPs for the period up to 30 June 2024. I will come to some of the government’s other measures on payroll tax, in both reducing and discounting payroll tax for our small businesses in the regions, later in my contribution. A further 12-month exemption from payroll tax for payments to contractor GPs through to June 2025 will be available for any general practice business that has not already received advice and began paying payroll tax on payments to their contractor GPs on this basis. This exemption is being provided through the Treasurer’s existing ex gratia powers and will be applied in this way under any Labor government.

There are a number of things I want to touch on, which I briefly got to touch on before the break but was cut off due to question time and cut off due to incessant noise from those opposite. I do not think they like hearing the truth, and when they hear it they do not want to engage. The economy of this state is something that we on this side acknowledge is incredibly, incredibly important and needs to be sustainable and here to deliver for individuals, for families, for the people that make up our communities across our great state. It is important that we are investing in the infrastructure and the services that Victorians need through the entire journey of their life, whether it be early education, primary school, high school or skills and jobs – skills and jobs, which we again heard a lot about in question time. It is good to see the opposition raising TAFE. It is good to know they know it exists for something other than just being cut and shredded.

With our healthcare system we need to ensure, again, from the start to the finish of people’s lives that they have a world-class health system that they can reach out to and depend upon to go about their lives. We must ensure that through this education and through this healthcare system we have got people that are skilled and fit and able to actively participate in our workforce, enabling them to support their family, their loved ones, and contribute to their local communities. That keeps our economy driving forward. To have this economy driving forward we need to be able to connect our communities and we need to be able to connect our state, whether that is on our roads or on our rail and whether that is personal, public or freight transport. We need to be able to bring the whole thing together, and that is exactly what this side goes about doing day in, day out – ensuring that can happen.

We need to ensure that all this can happen under a sustainable environment. I have just come from the Parliamentary Friends of Landcare event, the first event, a packed room with people from across Victoria who engage with their local Landcare groups or local friends of various environment groups, whether it be estuaries or whatever it might be, to manage and care for their local environment, because Victorians, indeed Australians – and as we heard, Landcare started in Victoria and is now around Australia and in other parts of the world – feel a deep pride and passion in caring for their local spaces.

When you put all that together, we look at creating a thriving state for people across Victoria to live in, to love, to thrive in, to be their absolute best in. Whether we are talking about individuals, families or indeed businesses, we on this side are proud of what we have been able to do for businesses with the payroll tax free threshold, lifting it to $1 million, nearly doubling it from when those opposite were last in power. Fifteen per cent of all taxpaying businesses will not pay a cent, because our small businesses play an incredible role in our state, whether it is their connectedness to their local communities, whether it is mums and dads working in their local community, whether it is kids growing up around the business and getting to learn and understand or whether it is those businesses providing to their local communities. I am absolutely proud that we are supporting them with those tax-free thresholds – a bit of a mouthful, but we are getting there. I am also incredibly proud that in the regions it is a quarter of the metro rate, at 1.2 per cent, to support our regional businesses to also thrive.

It is a far cry, what the Labor government has done to invest in our regions, invest in the services and invest in infrastructure to set the foundations and the settings for regional local businesses to thrive. When you build the infrastructure in our towns, people stay. When the services are there, people stay. People can age in place. People can grow in place. Families can work in place. With the investment we have made into kinder and with the investment we are making into our childcare centres, parents – predominantly mums – can get back to work. They can take on that job in the local health service that does not get left unfilled. They can earn money to contribute to the family, which sees the excess money go into the community and keeps the community ticking together, and – another thing that those opposite do not like – they can put money into their super to ensure their retirement.

Our kids are going through the schools that we have invested in in the local towns, and there are so many primary schools and high schools that I get to visit throughout Eastern Victoria that have had significant upgrades and new buildings to ensure that that infrastructure is there and that our kids go in and are proud and our teachers go in and are proud to deliver a world-class education in this state. What that does, from three- and four-year-old kinder and primary school to high school, is bring through the next generation of Victorians to participate in our workforce in the most meaningful way possible. It sets up not only our community and our social fabric for people who can be their best, but it sets up our economy for people who can be their best.

It is our people that make us competitive. Although the Liberals would like to rip up pristine agricultural farmland and frack it, it is our people that make us the best. An Australian Financial Review article today – just to pick up on fracking – says there are 20 per cent reductions on energy costs going forward in electrification, and what is the solution of those opposite? Tens of billions of dollars of nuclear power plants.

Members interjecting.

Tom McINTOSH: I have had to skip forward due to the interjections. I wanted to keep going a little bit forward through health. I will come back to health. Just to pick up on energy: those opposite, instead of seeing home owners and businesses with generators on their roofs, and batteries and electric vehicles – which I know are very frightening to you all – would rather ship oil from the other side of the world, paying foreign nationals who are potentially against our national security interests. You do not want to see farmers generating electricity off their land and diversifying their incomes, because of your ideological obsession, your ideological hatred of renewables. You are obsessed and you are hate filled, and that negativity is driven by the National Party out of Queensland. You are not allowed to come up with your own policies.

I do have a glimmer of hope that with Danny O’Brien taking on a leadership position he will protect the generations of jobs and the tens of billions of dollars of investment in offshore wind off Gippsland – because if it was up to you guys, that industry would not even exist. And what is your answer? It is tens of billions of dollars of nuclear reactors that do not have a workforce, and you are lying to workers. You are lying to current energy generation workers, because the jobs that you lot promise will not exist for decades. They will not exist for decades, and the businesses and the households in this state will not have the affordable, reliable clean energy that we are putting in the pipeline. If it was up to you lot, you would leave an absolute gap.

In our healthcare system we have our investments in hospitals all around this state and our investments in the pay and conditions of particularly those predominantly women that work in that industry around our state. Whether it is education, whether it is health or whether it is the infrastructure connecting it all, we have invested in it. And every step of the way, you have opposed, because you believe in nothing. You believe in nothing, you promise nothing and you deliver nothing other than negativity and divisiveness. That is why I am proud to be in this government and proud to support this bill.

David DAVIS (Southern Metropolitan) (14:33): I am pleased to rise to make a contribution to this particular bill, rising as I do after the strange and offbeat presentation we have just heard. The State Taxation Further Amendment Bill 2024 is a bill that the opposition will not oppose, but we have serious concerns about it. The payroll tax changes go a tiny notch in the right direction but fundamentally do not deal with the problem that is being imposed by this government. It is a tax on health, it is a tax on doctors and it is a tax on dentists and on physios and it is being passed all the way through to the patients. It is actually making health care more expensive and less affordable. That is what it is doing.

The Duties Act 2000 changes are a series of changes that we will have a bit to say about in a moment, but there are more land tax hits on a whole range of matters, hitting people who have provided for their own wealth. What I would say is all of this comes in the background of the state’s growing debt, the state’s growing financial enfeeblement, the state’s growing position relative to other states and jurisdictions. The Auditor-General has blown the whistle on this government in his report Auditor-General’s Report on the Annual Financial Report of the State of Victoria: 2023–24 tabled last Friday. This is a very important report, and I would say to people across the Victorian community that it is dry and frightening reading but people should read it because it dispassionately, thoughtfully and with great authority lays out the problems that the state now faces. It says:

In this report, we share outcomes of our audit on the state’s financial report and share our independent perspective on the state’s financial outcomes and risks to fiscal sustainability.

They make the point they have seen the general government sector incur another operating loss of $4.2 billion. This brings accumulated losses over the last five years to $48 billion – $48,000 million in losses. It deals with the fact that there are serious operating losses because the public sector has not been managed well. It deals with the issues around the major projects.

Now, it is true that additional debt was incurred with COVID, but I am here to tell you, and the auditor’s report from 2020 made this very clear, the state had entered a period on 31 December 2019 where we were already in the negative. That, importantly, is BC – before COVID. So that is what is going on here. Let us just rehearse for those who may not know it what has happened. The Baillieu–‍Napthine governments worked hard to ensure the state had a strong fiscal position, and that is where we were. The tables in this report show the responsible management of the Baillieu–Napthine governments. Let us just do this little trip down memory lane, because it will be instructive for some newer members. We left government with the state in a very secure financial position. The state also had a debt cap in place, an agreed debt cap across both sides of the Parliament. It was in 2018 in the week before the state election that the then Premier Daniel Andrews and Treasurer Tim Pallas stood before the media and in effect tore up the fiscal responsibility that had been a model on both sides of politics. They said, ‘We’re going to increase the debt to GSP from 6 per cent to 12 per cent.’ Later, when COVID came along, they ripped out the debt cap and did not want to have any protections for bad fiscal management into the future. But you can never forget that press conference where Daniel Andrews and Tim Pallas stood in front of the pack and said, ‘We’re going to tear up the agreed debt cap. We’re going from 6 to 12 per cent.’ Of course the rest is history.

They rocketed off as they laid out big project after big project. The problem with these big projects – some of them are good projects, some are less well thought through – is they are all mismanaged. Every single one of them has come in either over budget or over time – or generally both – and more than $40 billion has been squandered in cost overruns. So even a good project that has been thought through should be managed properly, and the waste and incompetence of this government in allowing these projects to flush into huge overruns has been extraordinary and is the central cause of what has occurred in this state. Incompetent, ineffective control of these major projects is leaving Victoria in a very difficult position into the future.

Our position with respect to other states has deteriorated massively. Those who want to check can go to page 24 in the Auditor’s report, figure 12. He looks at the gross debt of Australia, Australian GGS – general government sector – by state as a percentage of nominal GSP. What you will see is Victoria, after 2018, rocketing up under Daniel Andrews and rocketing up under Tim Pallas, the worst Treasurer in Victoria’s history. What you will see is that Victoria’s debt by the end of the estimates period will be bigger than those of Queensland, New South Wales and Tasmania combined. And yet we were in a sensible position. We had debt to GSP at about 6 per cent previously. Then after Labor took the brakes off and said, ‘Look, Mum, we’re going free downhill, we’re going no hands, and off we go,’ we have been going downhill, and the debt is going up and up and up. People should be very aware of where this sits. The graph at figure 10 in the Auditor’s report, ‘Growth of Victoria’s gross debt’, shows for the whole state of Victoria that they will have taken more than $250 billion out at the end of the 2027–‍28 period. That is the sign of a failed Labor government, a Labor government like all Labor governments: in the end they cannot manage money, they cannot control the books, and they bankrupt people and they bankrupt the state. That is actually what they are doing. They are seeking to bankrupt the state through their incompetence – buying votes here, buying votes there and unable to control the fiscal levers, allowing the state to careen into a terrible position where we will have debt which will hang like a smelly albatross around the neck of Victorians for decades into the future. Whatever government comes in, it is going to face the legacy of Daniel Andrews, Jacinta Allan and Tim Pallas.

I also want to be clear here. Some people say, ‘Oh, poor Jacinta Allan. She’s come into government, and she’s inherited this terrible mess.’ Well, it is a terrible mess, that is for sure, but she was one of the architects of it. She was the architect of it. She is up to her collywobbles in causing the debt. That is what she has done. She is the one who had oversight over all the projects – she is ‘Miss Major Major Major Major Projects’ – getting bigger and bigger and bigger as the debt coming out of each of the projects washes through the system and smashes Victoria’s finances. That is Jacinta Allan’s record. She is the one who presided over the failure to control these major projects. I could go through the list, but I do not actually think it is necessary.

We even saw today the tabling of the updated position on the Metro Tunnel. We see that there is again slippage in time. We have got massive debt, already much greater out of the Metro project. The Metro has a very good value. We actually supported a version of the Metro, a different one, and we understand the theory behind the Metro and what the government is trying to achieve. But that does not absolve it of its responsibility to make sure the project runs on time and on budget. It is its job as a state government to actually get in and manage the projects, to cost them properly in the first place and then to manage the projects. It is not a licence to say, ‘Oh, we’re a Labor government. We can do whatever we like. We can waste billions of dollars of state money’ – hard-earned taxpayers money – ‘and we can waste that to the nth degree.’ I say that is what has happened here. I do urge people to sit down and read this report from the Auditor-General. He has done very important work.

I think it is also important to realise that the Treasurer is wriggling here. He is trying to look for some hook or some way to explain what has happened to Victorians and Victoria. The truth is that in recent years under this government, income per head and income per household have been falling. People are getting poorer, and we saw this with the Saul Eslake figures that came through in recent days where he looked at this very carefully – a very thoughtful and respected economist. Now Victoria’s income per head is lower than Tasmania’s. I do not think that that has been the case since about the 1840s. Victoria has always been a more successful economy, had better income per head and better income per household, but the end result of Labor’s incompetence and its waste and its profligate behaviour is that our income per head and income per household is falling, and the taxes are going up. The taxes are going up and up and up. The regulations have got worse. If you doubt me, go and read the Victorian Chamber of Commerce and Industry report from about 18 months ago. They tabulated the regulations across the different jurisdictions and singled Victoria out as the one with the most impactful and excessive regulations, so there is significant work that needs to be done there.

At the same time we have seen not just the fall in income per head and the rising debt but also declining services. After 10 years of Labor, the waiting lists are higher, much higher than they were. When we left government there were about 38,000 on the waiting list. There are mid-60,000s now on the waiting list. If you look at the ambulance response times, they have deteriorated. If you look at the transfer times in hospitals, the deterioration is actually quite severe. I just read some figures on the Alfred into Hansard earlier in the day, and they are a disaster. They are a disaster because if you are waiting to get into hospital and you have to wait longer, your outcomes deteriorate. They looked at, for example, the shocking deterioration in the performance of the wait times in the emergency departments. These are real problems and a deterioration in the performance. So not only are we going into debt, not only are our taxes higher, but our services are deteriorating too. The same is true in education. The same is true in transport; there is no evidence that we are getting better results on transport. In fact, there is a lot of evidence in the results that our train punctuality and so forth has deteriorated quite significantly over the 10 years of Labor.

So bad service results, high tax, high debt and deteriorating living standards – that is what we are actually facing. Victoria’s living standards are going backwards. I pay tribute to the work that the Australian did in recent articles this week, from last weekend onwards, which looked at Victoria’s position. You can see Australia’s position deteriorating under a Labor government federally, but Victoria’s position has deteriorated with respect to other states in Australia too. So this is a disaster. It is all due to Daniel Andrews, Jacinta Allan and Tim Pallas. That trio should hang their heads in shame. They should be run out of the state and asked to never return after what they have done to our state, after the damage they have done to our state, after the tragic amount of damage that they have done to our state. It is shocking.

Sarah MANSFIELD (Western Victoria) (14:49:049:): I rise to speak on behalf of the Greens on the State Taxation Further Amendment Bill 2024. I will say at the outset, we will be supporting this bill. We are broadly supportive of the changes that are contained in this bill. The one area that I just want to make some comments on is the changes to the GP payroll tax situation. It is well overdue that something was done about this issue. It first came to a head last year. In August 2023 in Victoria the State Revenue Office released a ruling that outlined that payroll tax applies to most general practices, and that ruling was to apply retrospectively and prospectively and apply to a number of other health professionals.

It is important to understand that most medical practices are private businesses. They have independent practitioners that generally operate as sole traders who pay a proportion of their billings to the practice in exchange for use of the facilities and support from staff like nurses and receptionists. This is what is really important I think to understand in this context: the longstanding interpretation of payroll tax laws right across states and territories, all across the country – and these interpretations were supported by professional financial advice received by general practices – was that payroll tax laws did not see GPs as employees. That did not apply to the typical arrangements in a group general practice that are commonplace right across the country. Then there were several court cases that tested this longstanding interpretation, and they determined that payroll tax applies in most medical practices because of the nature of the way GPs work together in those practices. While they are not technically employees, the way they function – for example, they might work out a leave roster between them to ensure that their patients continue to receive care or they might work together to ensure that someone is checking someone else’s results if they are not in the practice on a particular day – and those team practice protocols meant that under the eyes of payroll tax laws they were seen to be functioning more like employees than sole traders. When these court cases occurred, understandably there was quite a lot of distress and uncertainty in general practices right across the country, because suddenly the way that they had been operating and their business models were being questioned. It was uncertain whether payroll tax did or did not apply to what they were doing.

Other states and territories recognised that these cases presented a genuine practical problem on the ground for general practices and sought to provide some clarity for general practices quite quickly. A lot of them acted very swiftly to at least put in a pause on the application of payroll tax and limit retrospective application – some states went as far as to quickly say, ‘It’s not going to apply to general practices’, like Western Australia – but all the others dealt with this much more swiftly than Victoria. When we tried to raise this issue with the Treasurer the response we were met with was, ‘Nothing has changed. The law has never changed. Payroll tax laws are exactly the same. Nothing to see here.’ While, yes, the law had not changed, the practical interpretation of it had changed, and I think that was a very disingenuous response. General practices that were trying to engage in good faith to resolve this issue and get some certainty I think really were done a disservice over quite a long period of time.

One of the really difficult things was that several practices reported receiving massive bills for retrospective liabilities. Many others started getting quite concerned that they were going to face something similar – they had not yet received any kind of bill but were concerned they might. I heard that some practices were considering closing because they were so uncertain about their future. When we think about what is going on here, for primary care there is not really a public option. People have to go and see private general practitioners. It is how you access primary care in this country. I think creating that much uncertainty in the sector was really an unhelpful thing to have occurred.

The other thing that I think has been quite concerning has been the fact that if general practices are now being seen as, ‘Well, if you function in this way by working together, working as a group to provide good clinical care, making sure you have leave rosters, making sure someone’s always on call, checking each other’s results’ – things that result in good-quality patient care – and that is then used to define you as an employee under tax laws, there is suddenly a perverse incentive to stop those team-based practices and to stop working together, in order to not be seen as an employee, and to act more like a sole trader that just comes in and out, does their own thing and does not actually work as part of a collective. That is again not something that I think we should be working towards if we care about good quality patient care. That depends on health practitioners working together, functioning together. It is a different sort of situation to other private businesses; nonetheless, they are still essentially sole traders that are coming in and doing their own thing. But there is a necessity in providing good patient care to at some level work together. Again, there is protracted uncertainty around these laws. The sense that perhaps nothing was going to change in Victoria has created these perverse incentives and I think really undermined good patient care as a result.

The other concern with this is that at the same time as all of this was going on the federal government was trying to implement measures to increase bulk-billing rates because, as we have seen, bulk-billing rates have been declining quite significantly, which impacts on people’s ability to afford and access health care. The Greens’ position has always been that we want everyone to be able to access – ideally publicly funded – all levels of health care, including primary care. I would love to see publicly funded GPs providing free health care for everyone who needs it, wherever they are. I think that is a model we should be getting to. But at the very least, given the fee-for-service system we have, we need to see greater rates of bulk-billing. Bulk-billing is not sustainable for a lot of practices anymore given the stagnation of Medicare rebates over a long period of time. They are not reflecting the costs of delivering health care. The federal government had recognised that, was trying to increase bulk-billing rates and introduced a number of incentives. On the other hand you have this sudden change in interpretation of payroll tax laws, completely undermining that and potentially leading to practices having to increase their costs, which would then be passed on to patients. It is important to highlight all these things because it has taken a long time to address these problems that have been expressed.

I am heartened, however, to see that in this bill before us today the concerns of general practitioners have been listened to. Some certainty seems to have been provided. I understand that not everyone will be happy with the way that this has been resolved, but I think the proposal to exempt from payroll tax bulk-billing consultations is not an unreasonable one. At the very least it will ensure that those measures that were put in place by the federal government to incentivise and increase bulk-billing rates are not undermined. It also means that the more a practice bulk-bills, the lower their payroll tax liabilities will be. There is debate about whether the model chosen in Victoria is the best one. Other states have done similar things, but they have actually applied a threshold amount. If you reach a certain threshold as a practice of bulk-billing, say 70 per cent, your practice will be exempt from paying payroll tax if you bulk-bill 70 per cent of your consultations.

There is an argument to be made that in some ways that helps to address this issue of the perverse incentive to not work together, check each other’s results and cover each other’s leaves of absence, because a practice can have some certainty. If they reach 70 per cent, they do not have to pay payroll tax. They will not be treated as sole traders in the eyes of the law. That said, I understand there are counterarguments that if you hit 70 per cent there is no incentive to bulk-bill anymore. Under this model that Victoria has proposed there is an incentive to keep bulk-billing beyond, say, 70 or 80 per cent or whatever the threshold might be set at. I am concerned still that there may be an incentive for some practices that would just prefer to avoid payroll tax altogether. They may still want to avoid being seen as functioning as employees, and they will continue to try and not work together and not provide collective care. Again, we are supportive of this. I think it is a reasonable thing to do. We certainly want to see more bulk-billing appointments available for people, but using payroll tax exemptions in the long run is not a sustainable way to promote bulk-billing. Even though I have a deep personal dislike for the whole fee-for-service, private-billing model – I was terrible at it – even I recognise that practices cannot cover their costs if they bulk-bill everyone, unless they really rush a lot of people through to get high throughput, and then they do not get good-quality clinical care. There needs to be I think a much bigger scale overhaul of general practice funding. It is something that has been talked about for years and years.

Lots of people have different views about how this should be done and the best way to fund general practice, but I certainly believe that a pure fee-for-service model such as the one we have is driving up costs. I do not think it is fit for purpose given how general practice is delivered, the complexity of patient care and the increase in the number of people experiencing chronic disease and mental health conditions – things that require long consultations and multiple consultations over a long period of time. I do not think the fee-for-service model delivers the best outcomes for patients in the long run. It also means people are having to pay more out of pocket. There needs to be a bigger scale overhaul of general practice funding. Obviously that is not something that this tax bill is going to be able to address, but I think what has been done to address the concerns around payroll tax is a reasonable compromise. We will see what the outcomes are.

It will be really important to keep talking to stakeholders to see what impact this is having on the ground. We need to be very mindful of any potential perverse incentives that are created, particularly around, as I said, working collectively as a practice and working together. If we are still seeing that being undermined and group practice kinds of protocols that lead to better patient care not functioning as well because practices are trying to avoid payroll tax, that should be something the state government takes on board. It should go back to the drawing board and revisit this issue if the mechanism it has proposed is not really working for practices on the ground.

I understand that the Liberals have some amendments. Although I have some sympathy for these in that they would exempt practices entirely from paying payroll tax, it is a very broad exemption applying not just to general practice but to all other private health businesses. It is not as clear what the impact of the tax ruling has been in some of these other circumstances. In many of the cases there are public options available. It goes beyond what I think one of the core issues was in this case, which was payroll tax in general practice. For all the reasons I have outlined, it was a particular problem in those settings.

I think what the government have come up with is a reasonable compromise, but I would really urge them to continue to work with the general practice sector and keep talking to peak bodies and stakeholders to make sure that this is working for them on the ground. I will have a couple of questions in the committee stage. I particularly would like the government to assure us that payroll tax liabilities will not be applied retrospectively and that some time will be given for practices to adjust to these changes. As I outlined at the start, despite the actual tax laws – nothing is changing about the tax rulings or the tax laws – the interpretation of them very dramatically changed after several court cases. I think the right thing to do to ensure that practices can keep functioning with some certainty is to make sure that nothing is applied retrospectively and that, going forward, there is a bit of time given, just so the practices can get used to this new interpretation. There will in fact be new laws if this bill passes. I will leave my comments at that. As I said, I will have a few questions in the committee stage.

Richard WELCH (North-Eastern Metropolitan) (15:04): I rise to speak on the State Taxation Further Amendment Bill 2024, with emphasis on the ‘further’. I thank Dr Mansfield for her contribution – it was very sensible – and Mr Davis for his contribution. I was a little bit concerned about Mr McIntosh’s contribution. It started before lunch and at that time was sort of not imaginative but sensible, but after lunch it was highly odd and emotional. I think I may need to speak to parliamentary services catering, because the only thing that happened between then and now was the Landcare event. I am concerned, out of an abundance of care and concern at this time of year, that he does not drive home after that. There may have been something in the food, because afterwards his speech was slightly unhinged, referring to all sorts of ideological things.

At the end of the day numbers are not ideological, they are black and white, and in a lot of cases red. There are some values about numbers. There are some truisms about numbers when it comes to the economy and the state in particular, and one is that you cannot tax your way to prosperity. The more you tax the more you disincentive commercial action, and the more you disincentive people from taking risk the more you remove people’s reward for effort and the more you suck money out of the private sector so that it is not circulating and creating enterprise. You cannot tax your way to prosperity.

Perhaps even more senseless than that is the idea that you can borrow your way out of debt – that is equally impossible. That also reaches certain tipping points where it is not just senseless, it is reckless. We are the highest taxed state in the nation. This government certainly has a tax policy, but it absolutely has no agenda for genuine tax reform other than tax and spend. There is no agenda for productivity measures. The most dire element of tax reform required in this state is tax reform that addresses our lack of productivity, because the only way we are going to get out of this intergenerational debt is to grow our way out of it. We cannot tax our way out of it and we cannot borrow our way out of it, we can only grow our way out of it. If the tax reform agenda is only ‘Tax more so we can spend more’, we are in deep, deep – probably irreversible – trouble.

There are no productivity measures in tax reform. The measurement of this is that since 2014 our spending in the state has gone up by 59 per cent but our growth has only gone up by 29 per cent. Those figures should be the other way round. If you are increasing productivity, you grow more than you need to generate –

Georgie Crozier interjected.

Richard WELCH: Yes, 142 per cent in debt. That is the drag on our productivity. Now we are at the point where the debt burden on the state is reaching a tipping point. We are now borrowing to pay for day-to-day operational costs. We are borrowing $80 million a day to cover operational costs. That means there are less funds for infrastructure, and there are less funds for productive infrastructure – the kind of infrastructure that will generate wealth, that will generate productivity. In fact instead we are putting that capital into non-productive assets that do not generate productivity and do not generate wealth for the next generation. Not only is there no tax reform agenda for productivity, the actual uses of the tax-and-spend agenda is spending money on nonproductive capital. We have valuable state capital tied up in concrete underground going nowhere. The budget process is now not worth the paper it is written on, because there is more off the books than on them, or as much, and we are now tinkering and changing and amending and amending again all of the assumptions out of that budget.

It is not just us saying it. The market understands this. Anyone who understands the market understands this, but Saul Eslake, the respected economist, his analysis is we have fallen as a state from the most powerful and prosperous and the richest state for most of the past century to now near the bottom of all states in Australia. What a fall; what a calamitous fall for us. The former auditor Bob Officer said there’s precious little in that analysis you can disagree with. The chairman of CSL Brian McNamee has been told by leading fund managers in Victoria that Victoria is ‘uninvestable’. We have fallen productivity, we have debt and we are also uninvestable. This is a perfect storm. This is a calamity heading our way. There is one dimension to this calamity that has not been raised often – and I think it is about time it started to get some attention – and that is the state’s refinancing debt cliff. We are substantially in debt. What should be understood is there is $70 billion of debt that needs to be refinanced in the next two to three years and there is a budgeted amount of additional debt of $50 billion that will need to be financed in the next three or four years. That debt at the moment, that $70 billion, is at bond rates of between 3 and 4.3 per cent. To refinance that debt at a 10-year bond rate, we are looking at having to offer those bonds at over 5 per cent. That is $120 billion of debt being refinanced at a higher level than what we are already financing it at. That $26 million a day we are spending on interest – it is not just the fact we have to keep paying that, and it is not just the fact that the state’s credit rating is at jeopardy, meaning that it could go high. It already has by effect, because the market is telling us people do not want the Victorian Treasury bonds because we are a bad bet. That is calamitous. That interest rate that we are paying per day – $26 million – is just the beginning of it. Every day we are burning that money instead of putting it into frontline services or into sensible investment in productive enterprise or productive capital.

What is this government’s solution? This bill, where we are pulling back some of the tax that had been added on – we are just taking back something that has already been done – is really shuffling deckchairs on the Titanic at this stage. It is trivial in that sense. It is a backdown, let us be clear about that, because the idea of taxing GPs was very, very unpopular. This government may not be sensitive to economics, but it is hypersensitive to votes. When something appears to be unpopular and it may cost votes, it will back down, like it backed down on duck shooting – that was unpopular, so they backed down on that. The injection room was going to cost votes, so they backed down on that. Increasing the legal age to 14 was unpopular, so they backed down on that. But I tell those across the chamber, the Labor Party, there is not enough money in the state for you to buy votes at the next election like you did at the last one. Because what you did then was you leveraged the state. You leveraged the state with your promises. You leveraged the state with your energy policy. You leveraged the state with your infrastructure policy. You are all spent out. There is nowhere to go for you anymore.

We have a broken budget process, where more is off the books – or as much is off the books as on the books – and much is hidden behind layers and layers of bureaucracy, hidden under statutory bodies. We are now in a nearly weekly reliance on Treasurer’s advances just to fund ongoing day-to-day operations. It occurs to me that because we are paying operating costs by debt, every time those across the room say, ‘Oh, we’re investing in this,’ let us be very, very clear: no, no, no, no, you are not investing; you are leveraging. You are leveraging the state. You are leveraging the taxpayers: the men, women and children of Victoria. You are leveraging our future so that you can have a press release. They have geared this state to the point of bankruptcy. That is always wrong in principle. In terms of taxing GPs and taxing an already struggling health service, particularly health services in regional areas, this was always wrong in principle. It was almost a breach of the social contract. It was always wrong in principle, but it proved so bad in practice that you have had to amend it. Practices would have closed. And because the extent of your backdown, your revision, is so limited, practices will close, and we will have a reduction in the provision of health services across Victoria and regional Victoria. This will be a consequence of what you are doing. This bill goes nowhere near far enough to address that, and that is why we have put up really sensible amendments to actually do something for the good of Victorians – we actually want to not tax them into oblivion and not tax these practices out of the marketplace.

Again, I guess it is no surprise because there is no comprehension of what the larger picture is economically in terms of our debt cliff. There was no really minor picture of what this was. When the Department of Treasury and Finance was asked about the imposition of this tax, they were asked: how many GPs are employees as opposed to contractors; how many trainees; how many private clinics do not fully bulk-bill; what is the proportion of clinics which only bulk-bill and where are they located? There were similar questions that would be fundamental to the analysis of this tax. The Department of Treasury and Finance said it does not have access to that information. They do not have access to clinic-level data and so the question arises: on what basis did they do the modelling? How do they know? They do not even know the consequences of this tax because they have not done the modelling. Now, (a) it is reckless, (b) it is incompetent, (c) it is economically illiterate to be doing that and probably shows the classic disregard of this government. You would say ‘You don’t know the value of money’ if you were talking to a six-year-old. You do not know the value of money.

The amendment is good, the amendment is very good, and I would have thought in a week where we have had incredible incompetence – let us call it a stuff-up – in terms of the VCE exams and the admission via this bill that you made a terrible mistake in taxing GPs at all, that there would be a little bit of humility and a bit of reflection on the other side of the room. Maybe over summer some perspective will occur. The only thing left to ask really is: when will you pause the SRL? Financially and in terms of a tax and debt, when are you going to choose the moment to drop it? I am going to predict it is either going to be some time over the Christmas break or maybe just before the federal election or something like that. It is only a matter of time before it is going to happen, because within your own ranks you are in disagreement about it, and certainly in terms of the public. They get that you have made it so that the state cannot afford the Suburban Rail Loop and you have made it so because your tax policy is written in crayon by economically illiterate people who do not understand that the future wealth of this state and the future ability to provide services to this state – certainly health services – are dependent on having a growing economy in which you have a vibrant private sector that is not taxed up to the eyeballs. But you do not understand this, and that is why we have to keep reforming and tweaking and correcting and adjusting what should have been a bill that came out with the budget, a comprehensive tax plan for the state. But you do not have it. You do not have a comprehensive tax plan for the state. In fact the only people who do and will are the Liberal and National parties. Come next year and come the two years after the next election, we will be showing the leadership that this state needs to grow our way out of this situation.

Georgie CROZIER (Southern Metropolitan) (15:19): I rise to speak to the State Taxation Further Amendment Bill 2024. I was actually just listening very intently to Mr Welsh’s contribution, and what an excellent contribution it was on this very important bill that we are debating and the matter at hand. He is someone that understands economics very well. He has managed and run businesses not just nationally but internationally and has a huge grasp of what we are talking about here. I think he explained the situation of Victoria’s debt and the impacts to not just the taxpayer of today but the taxpayer of the future. As he said, you cannot tax your way to prosperity. This debt that the government has saddled Victorians with is enormous, and it is going to have a massive impact on the services that state governments are there to provide. That is not going to bode well for Victorians, because the outcomes are getting worse and those services will decline, and we are seeing that with cuts in services like health.

This bill amends a number of acts. It amends various state taxation laws, and there are a number of acts that it cites – the Duties Act 2000, the Land Tax Act 2005 – but the Payroll Tax Act 2007 is the issue I want to speak to around the health tax that the government has imposed. They have been hell-bent on going after GPs, dentists, allied health professionals and those that work in medical practices because the state is in such a dire financial situation. If there was any proof of how serious this issue is, it should have been clear to anyone who was listening to question time today and listening to the Premier’s answers to very basic economic questions put by the opposition. It was bereft. She was bereft of the ability to answer very basic economic questions. I think it is and should be a concern to every single Victorian that the person who is in charge of the state and in charge of the situation that we are debating today – taxation, debt, investment, business confidence, business investment opportunities – has not got much clue. She did not know the answers. She was seeking assurances from the Treasurer, who was scuttling through papers trying to get to the answers for the Premier. That should be a concern for every Victorian.

We are the highest taxed state in the nation. The debt has risen since Labor have come to office by an extraordinary 742 per cent. Interest repayments are up by 327 per cent. We have had 56 new or increased taxes to Victorian households and to Victorian businesses. That is why we are in the mess we are in. The only reason that there is a payroll tax exemption for GPs is because the Liberals and Nationals, together with the AMA, the Royal Australian College of General Practitioners (RACGP) and the Primary Care Business Council, ran a campaign to highlight how ridiculous and how desperate the government was to be taxing health. They put a tax on health. It has never been done before. The Treasurer said, ‘Nothing’s changed. We’ve always had a payroll tax.’ Yes, medical clinics do have payroll tax on the admin staff and on the nurses they employ, but not on GP contractors – those people who come into the clinics and use those rooms to conduct primary healthcare services and provide medical care to patients. It was a desperate tax grab. It was a desperate measure by a desperate government because we are in desperate times financially. They have said, ‘Okay, we’re now going to exempt GPs,’ so that is what this does. It introduces a payroll tax exemption limited to general practices who offer bulk-billed services, and it will be effective as of July next year. This partial exemption comes in response to, as I said, our campaign. There are just those issues that I have spoken about before. But what I am concerned about is that it does not go far enough, because that exemption applies to those GPs who offer bulk-billing.

But members of the opposition are getting emails – and I am sure members of the government are getting the same emails that we are getting – from GPs who are very articulate and point out what is actually the reality of what they are dealing with. They talk about the cost of doing business. These are suburban GPs. These are GPs that are running their own practices or in partnership in practices. That is something that Labor do not like; they are ideologically opposed to that. But these are practices in the suburbs and in towns right across Victoria, and they say to us the cost of doing business – like rents, wages, consumables, electricity, water, medical equipment, phone and internet connections – continues to go up year on year. The costs of doing business are going up, and the government then starts to put a tax on them. They say most clinics in Victoria operate on a 3 to 5 per cent profit margin. But the payroll tax in Victoria would have been 4.85 per cent, and in regional areas it is 1.2125 per cent according to some of these GPs that have written talking about the cost to them. It is very expensive and is becoming more expensive to do business here in Victoria, as we know, with all those rising costs, so when you have got a tax whacked on you it has got to be passed on to the patient. Of course that then means that they have to increase their fees to patients. What does that do? That puts more pressure on a patient or a family member in a cost-of-living crisis. What does that do? That forces more people into the emergency departments or, concerningly, they do not access primary care at all. They do not go to the doctor, because they cannot afford it.

As Dr Mansfield quite rightly said, and she knows because she has worked in the area, you want to give good-quality care. This will put pressure on churning through the patients, transactional medicine, and that is not good care. Dr Mansfield from her previous life as a doctor in this area knows only too well that is the last thing a doctor wants to do. They want to be able to provide good primary care to the patient so that they can get the medical management, care and support that they need. But if you are running at a loss or you cannot make ends meet, then that is going to cause that to occur.

Mr Mulholland has circulated amendments that the opposition has put forward, and that is off the back of a private members bill that I introduced in terms of scrapping the government’s health tax. That is not just for GPs; it applies to those other allied health professionals that operate in medical clinics too – the dentists, the physios, those people that are actually providing care and services to patients. The government does not recognise that and does not see it as an issue. It is a big issue. In this state the shocking wait times for people needing and requiring dental treatment are getting bigger and bigger. That is nothing that this government can crow or be proud about. Their record on dental care is pretty shocking. There is even more concern about the wait for specialist appointments getting longer too. When you have got people that need to be going and seeing dentists in these clinics and they are not exempt from this payroll tax the government is putting on healthcare professionals like dentists, then again that is going to put more pressure on those individuals. What do they do? They are going to have to pass on those costs to patients. Concerningly, some are talking about leaving the state. That is not good for anyone. I want to commend the Crisafulli government in Queensland because the very first thing they did when they won government just a few weeks ago was they scrapped this health tax in Queensland for everyone – exactly what we are proposing. That is why I think it is terribly important that the amendments that we have put forward are supported, because of the issue around primary care.

The federal minister Mark Butler understood what was going on, because at the height of the Minister for Health and the Treasurer saying, ‘Nothing’s changed. You’re all just making it up; nothing’s changed,’ well, that is not what the Royal Australian College of General Practitioners was saying. They had never had so many GPs come to them and ask for assistance because they were getting these massive bills from the State Revenue Office. They were huge bills – hundreds of thousands of dollars, retrospective – and it was just a component that was going to make these clinics unviable. Some were considering closing, early retirement or moving out of the state. As I said before, that is not good for anyone, least of all Victorian patients. But what Mark Butler said was:

Payroll tax is a matter for states but I am very worried that the historic investments we’ve put into Medicare, in response to calls from state governments, will be lost to increase payroll tax obligations by general practices …

He understood this health tax was bad. I have no doubt he picked up the phone and rang up the health minister and the Treasurer and said, ‘What the hell are you doing? Scrap your payroll tax. This is not helping my efforts in terms of trying to get more people to be able to be bulk-billed,’ because it was putting more pressure on the GP clinics. Labor do not understand this. They have not got a clue. We are in such a dire situation. All they were after was a tax grab. This was just another tax grab. This is one of the 56-plus taxes introduced by Labor – an appalling track record.

It is hard to contemplate just where this state is going when you reflect on the enormity of the dire financial situation that we are in. It is no wonder the Treasurer was so desperate to go after anything he could find, including GPs. They have realised that is a bad idea. They have come late to the party, they have put this exemption into this bill and they are not giving the exemption to other allied health practitioners that they should. That is why our amendment is so important, and I would urge people to understand that, because this is just part way. It is not going to stop. There are, as I said, general practitioners out there that need the mix of being able to bulk-bill those patients that can least afford it – the vulnerable, the pensioners, the ones on Department of Veterans’ Affairs cards, all of those people that they obviously understand need to be bulk-billed – but also being able to manage their business and provide health care and being able to bill others in a different fashion. If they are going to be taxed because they cannot get to that threshold that the government is demanding, then that is going to put pressure on their ability to operate.

I say again, this is a bill late to the party because of the campaign run by the Liberals and Nationals, the RACGP, the AMA, who were dead against what the government was doing, and others who were very vocal. They understood exactly the implications. They did the background, and they had the figures. They knew how many Victorians would be pushed into emergency departments and how much it was going to cost the government overall. This was just a stupid stance the government took – a pig-headed stance by the Treasurer – for a long time. I am very pleased he has come part way. He has not come the full way. The government needs to support our amendments so that we can fix his mess that he has got us into.

Wendy LOVELL (Northern Victoria) (15:34): I rise to speak on the State Taxation Further Amendment Bill 2024, which amends the state taxation laws. It formalises Labor’s payroll tax on general practitioner clinics, but it does introduce a partial payroll tax exemption for some bulk-billing GPs. It repeals tax exemptions for friendly societies, broadens exemptions for property and land tax exemptions and institutes provisions to align with recent federal reforms for foreign purchasers. This is a bill on taxation, and Labor are very good at introducing bills on taxation. We have seen a number of bills in this Parliament since the Allan Labor government came to power. We have actually seen around 20 tax bills in that time. We saw in the 58th Parliament there were seven bills to do with tax; in the 59th Parliament eight bills; and here we are in the 60th Parliament, just halfway through, and we have already had five taxation bills. So the number of bills is increasing, because that is just two less than there were for the entire 58th Parliament. We are only halfway through, so we are on track to have a record amount of tax bills introduced in this Parliament.

Why do we think we would be on track to have a record amount of tax bills? Well, Victoria is in dire straits. Our debt is up. The half-year report released last week shows that state debt is set to increase to $187.8 billion. That is a 742 per cent increase under Labor. This is typical of what happens under Labor governments. They drive up debt, they send the state broke and then people vote Liberal governments in as the receivers to fix the budget again. The unfortunate thing for us on this side of the chamber is that we always inherit a budget in deficit and a state in crisis. We have to fix that budget first before we can get on with actually giving back to the Victorian people the types of services and infrastructure that they deserve, and then the cycle happens again – they vote Labor back in, Labor destroy the budget and destroy the state again and then we are voted back in to try and fix Labor’s mess. I think that perhaps after the mess this Labor government has got them into, the Victorian people might learn not to re-elect a Labor government.

The interest repayments in this state are up by 327 per cent under Labor. $9.4 billion is spent on interest repayments. That is $26 million a day, or more than $1 million an hour. Imagine what we could be doing with that money if we were not having to pay it out just in interest payments. Of course Labor has increased taxes significantly. We have seen 56 new taxes introduced under Labor, and we see the tax grab has increased by 173 per cent to $45 billion. Payroll tax is up by 138 per cent to $11.7 billion; land tax is up by 494 per cent to $9.3 billion; and stamp duty is up by 160 per cent to $10.2 billion. After a decade of Labor, Victorians are paying so much more in tax than they were a decade ago. As I said, they have already been hit with 56 new or increased taxes, each one of those putting more pressure on family budgets and businesses during the cost-of-living crisis, because Labor cannot manage money and they cannot manage projects, so Victorians end up paying the price for Labor’s incompetence.

Our state debt is out of control. In 2014 Victoria’s state debt stood at $22.3 billion, but after 10 years of Labor’s mismanagement that figure has exploded, and by 2028 Victoria is on track to hit $187.8 billion, a staggering 742 per cent increase. Under Jacinta Allan and Labor, Victoria is drowning in debt with no believable plan to reverse this. This reckless fiscal policy is burdening the future generations of Victorians, who will be left to pay the bill for decades to come. This unsustainable interest burden is really going to impact on future governments and their ability to deliver and on future generations of Victorians. In 2014 Victorians were paying $2.2 billion in interest on state debt, but by 2028 that figure will balloon to $9.4 billion – as I said before, more than $26 million every single day, or more than a million dollars an hour. This 327 per cent increase in interest payments means that less money is available for essential services like health, education and infrastructure. This government is responsible for that.

Victoria’s crushing tax regime is destroying family budgets. Families are finding it harder and harder to find the rent at the end of the week or to pay their mortgages or even to put food on the table, and they are finding it harder to provide for their children. More and more schools are running breakfast programs and even lunch programs because children are coming to school without food, because people are really feeling the crunch on their family budgets, which has been created because of Labor’s incompetence in managing Victorian finances. It is not only families that are feeling this pinch; businesses are also feeling under attack by Labor as these increasing taxes are impacting on their ability to keep the doors open and to keep Victorians employed.

The property sector is really feeling the burden of increased taxes under Labor. Labor collects around $21.5 billion in property taxes annually, and it is driving investors away. Investors’ confidence in Victoria is so low that they are more likely to invest in every other Australian state before considering Victoria. I was actually given that advice by my own accountant not so long ago when I was looking to invest some of my superannuation money. They suggested that I invest interstate rather than in Victoria, because I would be hit with the increased taxes in Victoria. I said we have 56 new taxes; let us have a look at the history of this. In 2014 Daniel Andrews stood on the steps of Parliament out there and said, on the eve of the election, that there will be no new or increased taxes in Victoria. Well, that was a broken promise. That lasted 2 seconds.

Joe McCracken: A big lie.

Wendy LOVELL: Yes, Mr McCracken, perhaps you are right. Perhaps he did just tell a huge fib when he stood there, knowing that he intended to increase taxes, because it did not take him very long to start that. The very next year there were three new taxes, in 2015. In 2016 we had four additional taxes – we are now up to seven. In 2017 there were six additional or increased taxes – now up to 13. In 2018 there was an increase of one, to 14. In 2019 there were an additional 10 new or increased taxes – up to 20. In 2020, during COVID, there were nine additional or increased taxes – we are now up to 29. In 2021 there were 10 additional or increased taxes – we are now up to 39. In 2022 there were another two – up to 41. In 2023 there were a further 10 – up to 51. And in 2024 there have been five new or increased taxes, to bring us to a total of 56 new or increased taxes in Victoria.

Let us have a look at some of the ones that have impacted on the property sector. Windfall gains tax: I have had families who have come to my office in the country – they are farming families – who do not intend to subdivide their land. They are just struggling to try to make ends meet on a farming property. But they have suddenly been hit with a bill for windfall gains of $100,000 because, through no fault of their own, some planning scheme amendment has been done, which means they have to pay this tax. They do not want to subdivide their land. They do not want to make money out of subdividing the land and selling it off. They actually want to farm their land. The $100,000 could tip them right over the edge to having to actually pack up and leave a generational family farm because Labor have introduced the windfall gains tax. We have also had the vacant homes tax. We have had the tax on vacant properties. We have had an increased tax on homes on contiguous blocks. We have had increased fire services levies over a number of years. We have had increased absent landowner surcharges. We have had affordable housing taxes. We have had an increase on landholdings over $1.8 million. Stamp duty has increased in a number of areas – on property transactions between spouses and on general property transactions. There has been a new stamp duty introduced for off-the-plan purchases. We have had expanded land taxes on holiday houses, we have had expanded land taxes on unimproved residential land and of course we have had the short-stay rentals, holiday and tourism property taxes.

What Labor and the Greens do not realise is that their policies are actually making it harder for people to rent houses in Victoria. People are selling their investment properties because they cannot afford to pay all these taxes. We need a strong private rental market in order to house everyone who needs to be housed in Victoria. Not everyone qualifies for social or public housing, and not everybody wants to live in social or public housing. But not everybody can afford to buy their own home, so we need a strong private rental market. We should consider that the government cannot afford to house everybody who needs to rent a home as well, so we do need that strong private rental market. Yet the government’s policies and the Greens’ policies are driving investors away from providing private rentals in this state.

Let us talk just a little bit about the short-stay rental and holiday and tourism property tax. That is going to really impact my area of Northern Victoria because we are on the border with New South Wales. This is going to drive tourists interstate, because if they stay in a short-term rental on the Victorian side of the border they will need to pay this tax. If they stay on the New South Wales side or on the South Australian side of the border they do not need to pay that tax, so those twin border towns – like Cobram–Barooga, Echuca–Moama, Yarrawonga–Mulwala and Albury–Wodonga – that are really just one community are going to lose tourism dollars interstate because of this tax. This is something that this government, which is so Melbourne-centric, does not understand about regional Victoria. We had similar impacts from things that they introduced during COVID, when gyms were open in New South Wales but not in Victoria. The gyms were advertising, ‘Come across the border and do a class at our gym, because we’re open,’ and our Victorian gym owners were distraught that their businesses were closed. They were being destroyed because people were going elsewhere to get their products.

This government need to understand that they need to become fiscally responsible. I think if they were to talk to us in the Liberal Party, we would actually be happy to help them, because we believe that Victorians need help long before 2026. We need a new government in 2026 to really fix this budget. But in the meantime, the Labor Party should come and talk to us about how to be fiscally responsible and how to actually put together a budget that will benefit Victorians. It should share the true state of Victoria’s finances with all Victorians so they know just how badly Victoria is doing under Jacinta Allan, who has been there for the entire 10 years of this government as a senior minister, Deputy Premier and now Premier. She is responsible.

Joe McCRACKEN (Western Victoria) (15:50): I am pleased to speak on the State Taxation Further Amendment Bill 2024 because it gives me an opportunity to speak about the excessive, burdensome and discriminatory tax regime in the state of Victoria. I first want to touch on the health tax, which has been an absolute blow to the health sector in Victoria. Labor’s health tax has taken a baseball bat to the health sector, with doctors, particularly those in regional Victoria and those in my electorate of Western Victoria, having rightly resisted yet another burden placed on them, which also places the health system even further into crisis. This bill proposes to further discriminate against regional health providers, especially private providers, who do not provide bulk-billing services. They are discriminated against because the bill provides exemption for those who subscribe to bulk-billing, and those who do not are not eligible for the tax exemption under this legislation. Many of these providers that are not eligible are in regional Victoria, and they cannot afford to subscribe to bulk-billing, so this move is in effect an attack on regional doctors and healthcare accessibility. It puts care access at risk and is typical of this city-centric government, which does not understand country people and does not care about fair access to health. It is a very clear indication that Labor hate health access in country areas.

The federal minister for health Mr Mark Butler has expressed concern at the Victorian government’s approach as potentially undermining Medicare. He said:

Payroll tax is a matter for states, but I am very worried that the historic investments we’ve put into Medicare, in response to calls from state governments, will be lost to increase payroll tax obligations by general practices …

He then went on to say:

I’ll … urge the Victorian Government to look very closely at that model and see whether we can get a level of national consistency around those arrangements that will allow us to focus on the strengthening Medicare reforms that we’ve put in place.

I am not sure if the state Labor Party agrees with their federal counterparts – it seems like there is a bit of a division on many fronts these days – but I at least get a sense from those opposite, who always say that they are the party of Medicare. Well, it does not look like that is the case if they are deliberately undermining Medicare. It is more like Medi-do-not-care at this point.

Treasurer Tim Pallas in a letter to the Royal Australian College of General Practitioners, the AMA, the Australian GP Alliance and the Primary Care Business Council said:

As Treasurer I have previously used my “ex gratia” powers to reduce or waive tax liabilities for organisations facing insolvency where it is in the public interest to do so …

This Government has no interest in any GP clinic closing their doors, and I would be inclined to use my … power to prevent that happening were any GP clinic to become insolvent as a result of a payroll tax liability …

What does that mean? I guess what it means is that I can send all the GPs and all the doctors in my electorate of Western Victoria, and indeed all country doctors, down to Werribee to the Treasurer’s office, and they can say, ‘Oh, look, we’re really going to close our office. How about you give us an exemption?’ According to this, the Treasurer is going to do that. I wonder if he will actually come good on that promise. I doubt it.

Land tax has also been an incredibly burdensome issue for many country Victorians, and it is a complete disgrace that the state government have changed the arrangements around this. We have seen many Victorians slugged unfairly, and I have had constituents in my office literally in tears over the changes that been made and implemented by this uncaring Labor government. Ross, who lives in the Geelong area, copped a massive increase to his land tax bill – almost a 100 per cent increase – due to the changes imposed by this nasty, unkind Labor government. This has forced Ross, who is a carer, to get another job just to pay off land tax debt. The debt was triggered because the threshold fell from $300,000 to $50,000, and that is where it kicked in for Ross and his arrangements to be triggered.

Jenny, who is another constituent of mine near Ballarat, copped a land tax bill for, get this, her garden – yes, her garden. It was almost $1000. Although she had lived there for a number of years, she received a land tax bill because her garden was on another title and because of the changes that were brought in where land tax kicks in at $50,000 and not $300,000 – it triggered a bill for her. Now, you can imagine the shock, fear and anxiety that rippled through her household – a pensioner faced with having to pay $1000 in land tax. She was absolutely distraught. I have advised Jenny to go to the State Revenue Office to find a solution. Jenny, like many Victorians who have suffered the shock because of this change, has at least come forward, and we have been able to at least get her on the right path to a resolution. But how many have slipped through the cracks because they have not gone to their MP? They have been shocked, and they have been scared to come forward. They have just tried to find some way to pay it back. How many have slipped through the cracks?

The next one I want to talk about is the death tax that the government have decided to bring in – the cruel death tax, the vindictive death tax on the state’s probate measures, which penalises those in vulnerable situations. The death tax has increased current arrangements, in some cases by 650 per cent. Even worse is that the cost cannot be absorbed by the estate; it has to be paid up-front by the family out of their own pocket, the family that have just lost a loved one. The family have to pay it out of their own funds once they pay for a funeral and all the other arrangements around that. It is incredibly cruel, it is incredibly unkind and it is incredibly nasty. But of course those words characterise many of the actions from those opposite as well. Why you would want to hit someone while they are down is beyond belief. It is incredibly, incredibly bad and also shows how desperate the government are to claw money back under these measures.

But there are plenty of other destructive measures that I could talk about as well. The windfall gains tax is an attack on those wanting to buy a house. It inadvertently, I think – the government do not realise it – increases the cost of buying a block and buying housing, because of course those who own a block have been slugged holding costs, which is effectively what this is, and they have to pass it on to those who are going to buy the land, which is the end consumer. There is the schools tax, which attacks those who want an option other than a government school – an independent school or a Catholic school or another religious institution. There is also the Airbnb tax – the holiday tax. It is like you guys hate people taking breaks. It is just awful, let alone the plethora of regulations imposed on business, households and workers. The party of workers hates workers; they attack them every day.

All this results in an economy which is struggling, on its knees and looking sicker day by day. Debt is increasing to over $228 billion, according to a warning issued by the Auditor-General, with interest repayments set to be over $1 million per hour – $1.2 million, it looks like it is going to be, every single hour by 2028 – $1.2 million every single hour. Now, imagine what we could do with that money. It is just wasted because of those opposite. Our credit rating continues to be at risk while the Treasurer goes overseas and attempts to assuage the concerns of ratings agencies. The debt recovery plan – what a joke that name is – is really just a political recovery plan, because if you look at the figures, there is no debt being repaid. It is being incurred at a rate far worse than we have ever seen in the state’s history.

Do not get me started on major projects like the Suburban Rail Loop, on which the government seem incapable of managing the cost blowouts – so badly so that they cannot even fund an airport rail link. Now, if you go to Sydney and look at the airport rail link, they have had it for a number of years now, and it is absolutely fantastic. Victoria is almost considered a joke. Melbourne is meant to be an international city, but those opposite have stopped that from happening. An airport rail link is at least one step in helping that happen. But no, we cannot fund that because we have wasted it all on the SRL. What an absolute disgrace. It is a simple truth that Labor hate to face. They cannot manage money, they cannot manage public finances and they choose to ignore the very obvious warning signs. It is the Victorian public that has to pay the price in the face of the second looming economic collapse of this state imposed by Labor. It is an absolute shame, and you should hang your heads in shame because of the damage that you are inflicting on the Victorian community and the Victorian economy.

Nick McGOWAN (North-Eastern Metropolitan) (16:00): It is a great pleasure to be here. It is a great pleasure to talk about one of my favourite subjects, and that is the Labor Party’s incompetence. It really is not my favourite subject. I would much rather talk about chocolate, but they have not yet taxed chocolate, and knowing this government –

Renee Heath interjected.

Nick McGOWAN: Do not give them ideas; Dr Heath, that is true. I would not want to disturb the children in the room by letting them know that this Labor Party here could well tax chocolate before they leave this chamber. If that happens, you know never to vote for Labor in your life, because they will be the ones who will have taxed chocolate. After that they are going to tax fun. They might even tax amusement parks – Disneyland. They could even tax Disneyland. The only way you can possibly prevent this is if you vote Liberal. I hate using this somewhat as a pulpit, through the Chair of course, but nonetheless the principle is the same.

What is happening in this poor state is – I have to choose my words somewhat advisedly here – it is like they have been given all their spending money, all their allowance, their pocket money, for a week; they got $10, but the bad news is they have spent $100. That is all right because one of them has snuck in and they have got the parents’ credit card and some of the cash, and they just keep spending it. They keep buying and buying more things. It is like they have gone to Toyworld and then they have gone to Hungry Jack’s. They get one slurp of that slurpee and taste the chocolate and the vanilla and think, like, ‘I’ll have another one. In fact make it a big one. And we’ll take the upsized meal, because why not? We’ll just keep getting bigger and bigger and better and better.’ They never have to worry about it because, guess what, they are never going to pay for it. Younger generations are going to pay for it. Unfortunately, in the state of Victoria that is what is happening today. The government is spending so much money.

You might say there are some things we can spend on and it is not a bad thing. We can spend on assets. An asset is something that you actually have for the future, which you might be able to sell or you might be able to leverage to borrow more money or create a bigger economy. This can be a good thing. However, this government are so incompetent; they are so bad. I have been around a while – as you see, I am somewhat of a dinosaur – but nonetheless, these guys are so bad that they are actually –

Harriet Shing interjected.

Nick McGOWAN: We have been joined by the minister. If you are not aware, this is one of our favourite ministers in this chamber, and I am glad she has joined us at this time. She is the Minister for Housing, and I know that she is embarrassed by the performance of her own government. I do not blame her one little bit – and I will not put words in her mouth, because I know that she loves her Labor Party – but nonetheless she and I are both aware that they are now managing to equal the incompetence in terms of economic management of a previous Labor government which happened many, many years ago. In fact they were so bad, they brought this state to its knees, and they were two weeks off defaulting on public pay cheques. What that meant was that those who worked for the public service, in two weeks time, were not going to be paid. The government had that little money. They had no money left. They had spent it all. They had sold everything they could sell – almost. They had driven this state into such a pit of economic despair that they had to actually be thrown out of government. That is what happens in a democracy – we throw them out – and this government is at about the right time now too.

Michael Galea interjected.

Nick McGOWAN: Mr Galea over here says he is not ready. I think in two years he will be more than ready. I think it will be ripe for the picking in two years time.

I should share with you, boys and girls and the chamber, through the President, some inconvenient truths. The Reserve Bank of Australia met recently. They are not my favourite, the Reserve Bank of Australia, to be fair. I am not much of a fan of theirs at all. Nonetheless they met.

Renee Heath interjected.

Nick McGOWAN: That is right; they met on 5 November – I heard you say that. They decided to keep the cash rate – that is the cost of money, basically – at 4.35 per cent, which historically is actually high for recent history. In terms of my lifetime it is sort of in the ballpark, I suppose. Anyway, the RBA, the Reserve Bank of Australia, did not rule out the possibility of a future cash –

Ryan Batchelor interjected.

Nick McGOWAN: I will tell you more. That is okay; I get this all the time. I only have 20 minutes. The government need so much information, they need so much advice, that they can only turn to the opposition for new ideas, fresh ideas and the sorts of ideas that will generate the next generation like yourselves. I can only hope that by the time you get here and take all of our jobs – and I hope that is sooner rather than later given the performance opposite. As soon as you do that, I can only hope you do a much better job than they do. So let me give you some salient tips. Save as much as you can. Generally speaking, spend less than you derive in income, and if you are going to spend more than you derive in income, make sure that that income is actually spent on things that are an asset or are going to derive future income or grow the pie. Now, you will hear politicians –

A member interjected.

Nick McGOWAN: Grow the pie. When I say ‘grow the pie’, we all know we cannot actually grow a pie. A pie does not grow unless it is put in the oven and it cooks. Nonetheless, when people say ‘grow the pie’ what they actually mean is enlarging the size of the economy, which brings me to taxation, which is –

Harriet Shing: On a point of order, Acting President, I am just wondering whether Mr McGowan wishes to table the recipe for the pie that he has just referred to in his contribution.

The ACTING PRESIDENT (Jacinta Ermacora): There is no point of order.

Nick McGOWAN: I welcome the point of order. I will submit it to the chamber and I will submit it to the minister, as she knows I am only too willing to do. I will provide at the end of today’s business and the end of today’s sitting the ingredients and the recipe to my humble pie. That will be coming your way very soon, Minister, and thank you for the request.

Members interjecting.

Nick McGOWAN: It is a humble pie. It is always a humble pie. Back to the RBA, because of course I try to keep on subject from time to time. The RBA did not rule out the possibility of a future cash rate rise.

Michael Galea interjected.

Nick McGOWAN: It is like a New Year’s resolution; it is just early. It is just a couple of months early. That is all it is.

Harriet Shing: What, so it will last for two days, and then you will forget about it?

Nick McGOWAN: That could be the case. Anyway, the future cash rate rise in this country – what it means is that the cost of borrowing money continues to be at a high rate. That is problematic because here in Victoria, wow, we have borrowed a lot of money. And when I say ‘a lot’ I mean someone has got a problem. Someone has a serious problem. By the year 2027 the state of Victoria will have a budget deficit – that is right, deficit – of $188 billion.

Ryan Batchelor: That’s not a deficit; that’s debt, isn’t it?

Nick McGOWAN: Debt.

Ryan Batchelor: Aren’t you getting them confused?

Nick McGOWAN: No, it’s a debt.

Members interjecting.

Nick McGOWAN: Well, it is not a recurrent deficit. We can talk about your recurrent deficit and what you project it to be at that point, but on the debt, let me be clear for those opposite. I apologise, boys and girls. You should leave the chamber, and I do not blame you at this point either when we are getting so many interruptions.

Harriet Shing: We have to listen to this all the time. We can never leave.

Nick McGOWAN: It is a small penance to pay, Minister. The debt, Minister, to be clear, will be $188 billion. I am glad you made me clear this up – $188 billion in debt. If you want to be specific, the interest rate on that alone per day is going to be $26 million. That is more than $1 million an hour. I know, I am quick with the math. Quick Draw McGraw – I am quick. It is going to be more than $1 million a day at that point. A million dollars, that is right. And what is worse, just take the September quarter. In the September quarter alone debt grew in Victoria in the order of $80 million a day. This is not a spending splurge, this is a spending problem. If those opposite then say to me, ‘Well, Nick, this is on assets, and look, we’ve got all these level crossing removals’ – I did hear those opposite talk about the level crossing removal projects –

Ryan Batchelor interjected.

Nick McGOWAN: I tell you what, I wish there was a toilet coming here, but there is not. This is going to go down in history as one of the most monumental cock-ups of all time. This Labor government has spent billions and billions of dollars removing level crossings – billions and billions and billions – and how much do you think they have futureproofed this project? Not at all. If you go and live in London or you go and live in Paris or you go and live in New York, they do not have just one line or two lines like we have. We have got two lines in most of our suburban sets – in fact predominantly, if not all. They have not provided for a single express lane in the future – so triplication. Not one of those underpasses and not one of those bridges actually has an easement set aside for a third rail or fourth rail. There has been no futureproofing whatsoever in one single level crossing removal project across this state. It is by far and away the single-biggest reckless spend, given that they have not futureproofed it for every single Victorian. How reckless can you get? I simply will never understand why, having undertaken this project, they did it in a half-arsed fashion. I will never ever understand that. It was amusing before because I heard a number of speakers opposite talk about how they somehow came back to government and revolutionised this approach, having conveniently forgotten that it was actually the Liberals and the Nationals who were getting underway and removing level crossings.

Ryan Batchelor interjected.

Nick McGOWAN: It was our policy. Not only was it our policy, but we were doing it. Clearly, you need a history lesson, Mr Batchelor, because that is the truth, and I know it unsettles you.

Ryan Batchelor: Please tell me how many level crossings you removed when you were in government.

Nick McGOWAN: Well, that brings me to an excellent point.

Ryan Batchelor: How many did you remove? Should we count them?

Nick McGOWAN: I am only too happy – please count them, by all means, while I continue this speech. I would love you to count them. Do you want to remind the people of Victoria how you have managed to pay for this? I know how you have managed to pay for this. That is right, you privatised the ports. It was privatisation just like with VicRoads – privatise, privatise, privatise.

Harriet Shing interjected.

Nick McGOWAN: I was not here, Minister, at that point in time. Mr Rich-Phillips is not here either. He saw the writing on the wall. He got in his plane, and he just fled. He has gone north.

Harriet Shing: No, he has not; he is on one of our water catchment boards.

Nick McGOWAN: Well, he is probably viewing the work of that board from 30,000 to 40,000 feet, I reckon – from a very safe distance – and he is well advised to do that, I can say that here and now.

Let me share with the chamber some other data. There is new data from Visa Australia, and that shows there has been a drop in spending across Melbourne for the past two years – a drop in retail spending. It is never a good sign for employment. And while we talk about employment, let me just say this: never have I seen it be an aspiration of a government to have higher unemployment. And yet in the last budget, what your government predicted, Minister, was an increase in unemployment. What this Labor government were proposing, and what they had set as their lofty target, was for more Victorians to have no jobs. That is what they are actually forecasting. So for all their words, for all their billions and billions of dollars of spending, they are actually predicting that fewer Victorians will be in work.

This is just further evidence that the Labor Party have not only lost their way, they have actually turned their back on Victorian workers. And as my right honourable friend opposite would attest to, they have also turned their back on the retail workers of Victoria, one after the other. You need no more illustration of that than the WorkCover – it is not chaos; ‘travesty’ is the wrong word too; ‘debacle’ is a good word, but it is not the word I am looking for – betrayal. That is the word I am looking for – the WorkCover betrayal. This government, unlike any other Labor government, chose to strip ordinary working men and women of their rights. They had proven they had an injury, a mental health injury, and this callous Labor government chose to cut them off at their knees when they were at their weakest, throw them on the scrap heap, throw them on the convenient worker scrap heap that the Labor Party has now chiselled for itself in this state.

The only thing that will be chiselled out the front of 1 Treasury Place will be a statue of the poor Victorian worker, because the Labor Party now have so monumentally turned their back on and betrayed them – and betrayal is the word – that they will never forgive them. Trades Hall will never forgive you for it. Many unions will never forgive you for it. I do not blame them. Not one iota do I blame them about you having turned your back on the workers of this state. There is only one choice for them therefore at the next election, and that is to vote Liberal, because they know all too well that the Liberal Party is the party of the Victorian workers – and increasingly that will tend to be so.

Now, guess what, Victoria also has had the highest unemployment in the country for the past seven months and the slowest wage growth. Shall I repeat that? That is just going back to the Victorian workers. Victoria has the highest unemployment in the country – the worst. If you listened to those opposite, you would believe something quite distinctly different from that – the highest unemployment in the country for the past seven months and the slowest wage growth, which means you are probably struggling to make ends meet if you are a Victorian today. Yet that does not stop this government spending on areas that we know are a complete waste. We have had many examples of that. And yes, Mr Batchelor, we have had an example where they have managed to spend a billion dollars in my electorate of Ringwood on one train station, two if you include Croydon – one train station and two level crossing removal projects – with not even the decency to give them a single public toilet. Keep in mind this train station is the service station for Maroondah Hospital, where thousands of people with injury and disabilities will attend every day, week and month of the year. This government was so callous it could not even do – and still to this day resists the temptation to do – what is right, and that is provide those people with one single public toilet at the train station. It is a travesty.

Gaelle BROAD (Northern Victoria) (16:15): I do want to congratulate Nick McGowan on his contribution to the chamber. I certainly had a text saying it was a class act, so it is a very hard one to follow. And I have had requests for the pie recipe, so you are going to have to share that.

I am very pleased to speak about the State Taxation Further Amendment Bill 2024 because this is just a reminder of what a major – I do not know, what would you call it? It is hard to think of a word to describe it, but this Labor state government is driving –

Nick McGowan interjected.

Gaelle BROAD: ‘Maladministration’ is a good word. We have seen under Labor just horrific financial mismanagement and a debt of nearly $188 billion, which is significant. Interest payments of over $26 million every single day – over $1 million an hour every hour – is extraordinary. Since they have been in office, just 10 years, there have been 56 new or increased taxes raising more revenue but operating costs are higher, so they are spending more than they are collecting, and that really should raise a red flag. Any household knows that when you look at your finances you need to make sure that you are living within your means – not living off credit cards or using credit cards to pay off credit cards, but that is exactly what this government is doing. Projects like the Suburban Rail Loop, a $200 billion project, are going on a credit card, but we are just not sure who is actually getting the bill for that one.

We have seen 56 new or increased taxes. Just think of a few of them. The holiday tax starts in January, another 7.5 per cent tax on family holidays if you take your holiday in Victoria. If you look at WorkCover premiums, they have absolutely skyrocketed – take the hike at Bendigo Health. In just one year the cost of premiums has increased to $4.3 million. That is a 122 per cent increase, and that is money that should be going into hospital services. If you think about land tax, I have had numerous letters from people who are so frustrated. People are getting sent notices when they should not be. It is very difficult to contact the State Revenue Office to sort out the mess, and many are facing that tax for the very first time.

We know that this bill relates to the payroll tax on GPs, and while it does introduce some relief for clinics that exclusively bulk-bill, it does nothing for non-bulk-billing GPs or allied health practitioners who remain subject to payroll tax. The Nationals and Liberals have been very clear about the impact of this change, and I note that in Queensland with the Liberal–National party government they have moved to abolish the payroll tax on GPs to prevent practices going bankrupt due to the retrospective tax, with many other states following suit.

I would ask the chamber to support our amendments. We want to see a full exemption from payroll tax on GP wages – not just a partial exemption, but a full exemption. The government try and spin the issue, and they say nothing has changed, the law has not changed, but that really is very misleading because there has been a change – a big change in the interpretation by the State Revenue Office that will see this tax apply to GPs and other practitioners such as physios and dentists at the clinics.

This bill seeks to tinker with some exemptions with the clinics that bulk-bill, but my concern is the impact this will have on clinics, particularly in regional areas. I received correspondence from Dr Umair Masood, a GP who is a partner at a clinic in my electorate of Northern Victoria. He wrote that:

Most GP clinics in Victoria operate on a 3–5% profit margin. The payroll tax in Victoria is 4.85% and in regional areas it is 1.2125%. If this extra burden is put on GP clinics, there will be a serious issue with viability that will most likely affect over 50% of GP clinics. There will be clinics that will close as they will not be able to make ends meet. Bulk billing has reduced significantly in Australia, due to a severe lack of funding in General Practice. The cost of doing business like rent, wages, consumables, electricity, water, medical equipment, phone and internet continues to go up year on year. Given the lack of funding and ongoing increase in business expenses, bulk billing is not viable …

…

… General Practice is the cornerstone of the medical system in Australia. It is also the cheapest point of medical care within the whole health system. We should increase funding in General Practice to off load the hospital system.

In his correspondence he refers to the Danish model, which I thought was very interesting, where they have funded general practice heavily, to the point where they have been able to reduce hospital funding. So the vast majority of people are cared for in the community and hospitals look after that higher tertiary level of care. His letter goes on to state:

According to a recent survey by Cleanbill, 256 of the 1,553 GP clinics in Victoria are at risk of closure. Booking platform called Hotdoc in a recent survey indicate that 95% of clinics in Victoria plan to increase patient fees in response to any additional payroll tax burden and operational compliance. This average rise in cost that will be passed onto the patient will be about $12 per consult, which would take the average out of pocket cost to $52 per consultation in Victoria.

He also went on to say:

Ultimately, the patients will lose out if clinics close and costs go up. They will visit their GP much less, have less access to health care and will end up at hospital emergency departments which are already struggling to cope.

But here we are – yet another tax as this government tries to find another way to go after our money. It is clear that they just have not been able to manage it.

We heard today Labor members asking, ‘What would we cut?’ Let us look at what Labor has already cut. They cut the Commonwealth Games, and they managed to waste millions of dollars in the process. They have cut funding to regional leadership programs. They went after hospitals and regional hospitals, seeking budget cuts just this year. They have cut $95 million from Parks Victoria in the 2023–24 financial year in addition to planned redundancies of 100 staff in the new year. They have delayed the rollout of kinder programs across the state. They have cut funding to the supercare pharmacies across Victoria, including in Bendigo. They have cut the Growing Suburbs Fund by 90 per cent. They have cut road maintenance funding, and now they are filling 700 potholes every day. There is no news yet on continued funding for Landcare facilitators and coordinators, which runs out next year, and the future of the award-winning Passions and Pathways program is also under a cloud. Meanwhile they have wasted billions of dollars on major project cost blowouts and signed the contracts to proceed with the Suburban Rail Loop, which is a project that is expected to cost over $200 billion. We saw the Auditor-General’s annual financial report released just this week, which made for interesting reading, and it sent up some red flags about the state debt. It found this government has no clear plan for long-term financial management. As I have said, they have not just dropped the ball, this government is using an absolute wrecking ball.

We cannot afford to see GPs, particularly in regional areas, forced to close their practices or increase their fees to cover this tax. In many towns in Northern Victoria, my electorate, there is only one practice. If that practice closes, health services for the community will disappear. This would place even more pressure on our hospitals and their emergency service departments. So I ask the chamber to support our amendment for a full exemption to the payroll tax.

Renee HEATH (Eastern Victoria) (16:24): I rise to speak on this bill today, which really is I think a sign of a government that has lost control of its funds, that has driven this state into so much debt that we will soon be paying $25 million a day in interest alone. It is something that is shocking. This bill proposes amendments to 14 acts, but today, because of time, I am going to focus just on the GP tax. What it does is it formalises payroll tax on general practitioner clinics and it introduces a partial payroll tax exemption for those that are bulk-billing. This is something that is extremely important. I do not know how many times I have stood up in this place and asked why we do not have a Pakenham hospital. People in the country –

Harriet Shing: We’re building it now.

Renee HEATH: Well, it is quite a few years late, Minister Shing, I will say.

Harriet Shing: But you agree that we are building it?

Renee HEATH: You were knocking down a building; I will agree with that. I have finally seen that after a lot of advocacy in this place. But the reason this is important, and I will tell a few stories about this, is because this directly impacts the lives of individuals. Cardinia shire, which is where Pakenham is, is set to grow by 40,000 people by 2046, but we have not had the infrastructure to keep up and to support that population growth.

Harriet Shing interjected.

Renee HEATH: Minister Shing, just to take away the politics from this, let me share a story of why this is important. There is a young girl that reached out to me the other day. She is 32, she lives in Sale and she had a cyst on her ovary burst. At 7 am they called the ambulance. The ambulance service said, ‘We don’t have one to send you.’ Then she was in so much agony that they said, ‘We can see on the map that you live close to Central Gippsland Health. Just drive yourself.’

Harriet Shing interjected.

Renee HEATH: No, this is in Sale. I did say that, Minister Shing. They looked on the map and they said, ‘Why can’t you get there yourself?’ Her husband was so distressed. Then they went through and the person on the other end of the phone said, ‘It sounds like she has period pain.’ They did not send an ambulance. At 11 am, 4 hours later, they called the ambulance again. He begged and he pleaded. Finally, what the ambulance service decided to do – even though there was an ambulance, they did not deem her case important enough – was send a non-urgent ambulance from Morwell. By the time it got there she had unfortunately got so sick, critically ill, that they could not find a pulse, they could not read her blood pressure and she had sepsis. That non-urgent ambulance that got there then called in and said, ‘This girl is about to die.’ They urgently sent a MICA paramedic and another ambulance to come and save her life. They had to revive her twice. That kind of takes the politics out of it, doesn’t it?

They called the MICA paramedic and another ambulance and had to bring her back to life. But before that they had sent her to a triage nurse and a telehealth doctor. They thought because she lived around the corner she could get there on her own. They did not comprehend the pain she was in and how incapacitated she was. This is where it gets a little bit worse. Then because of the time in between, because she could not access health care, she has had to have two surgeries since. She was three weeks in hospital, including in ICU, and five weeks on antibiotics. The first surgery was within half an hour of her getting to the hospital because it was that desperate a situation. It was a cyst that had burst that had then turned septic, and that was a life-threatening situation. I hope now we understand why access to health care is important and why it actually matters that we have a healthcare system that works and that people have access to.

This bill is really a story about the ongoing pattern of this government, which introduces a broad overarching tax policy that is 100 per cent about revenue raising without any nuance or the genuine wide consultation the Premier claims. The tax is so destructive that it has been described as ‘the biggest existential threat to general practice’, a claim that has been rightly countered with, ‘Well, then, why the hell are you doing it in the first place?’ This matters. This tax might cause GP clinics to close, and let me tell you, in a growing population like Pakenham – we are now back to Pakenham – the locals have already said that a community hospital is not enough to sustain that population anymore but that if that is all they are going to get, they are going to take it. It has not been delivered on time. It was meant to start in 2018. It was meant to be completed by 2024. We have now got a month left of this year, and they have finally just started demolition. This matters.

I am going to tell you another story, about a constituent of mine who has passed away. She received some medical imaging on her shoulder. She was straightaway sent to a specialist. Because of the out-of-control waiting lists, which still have not come back under control after COVID, there was such a long wait period that by the time she got to the specialist he had to deliver her some very bad news – that it was actually cancer, it had metastasised and it was too late. Unfortunately – I spoke to her husband a little while ago – she passed away. This matters. People have to have access to adequate health care. It matters.

In August last year, with an announcement of a retrospective payroll tax on contracted GPs, there was widespread disbelief that this government could do that. I just think it has been unbelievable seeing this government’s retrospective decisions. We saw it in Wonthaggi with the retrospective overlay that caused so much stress to people living in the 650 homes that were affected. They could not even dig a hole in their backyards without getting soil testing done. The preliminary testing was $14,000. The testing after that – it could have cost up to $80,000 for them to clear that. I spoke to so many people there about the incredible stress.

Now we have been talking to GP clinics about the incredible stress that this retrospective decision has caused them. It is like changing the speed limit and then fining everybody who had adhered to the previous speed limit. That is exactly what it is like. These are law-abiding citizens; they are people who have run their businesses properly but have still received huge retrospective bills. It is a desperate cash grab, and it is a tax on patients. There is not really another way to say it. Last year alone 185 clinics across Australia shut down, largely due to the financial pressures. This year there are 1553 general clinics in Victoria, and this bill would tax GPs working out of those clinics who were previously exempt. Ironically it is causing widespread harm and enormous stress to those who are operating under oath to ‘First, do no harm’.

In response to the payroll taxes last year a survey by the medical appointment booking platform that went out to 310 clinic owners and managers nationally found that around one in six, or about 16.5 per cent, reported concerns of closure. This is a huge issue. People need to have access to health care, and particularly in areas like mine, in rural and regional areas, they just do not have it. That is something that everybody in this chamber knows, because this year we changed legislation to allow pharmacists to treat non-complicated urinary tract infections. We legislated that pharmacists can now prescribe the pill. The reason we did that is because people in rural and regional areas do not have access to GPs. We are making this environment even tougher for them, and that has serious consequences.

The research also indicated that 95 per cent of clinics in Victoria plan to increase patient fees in response to any additional payroll tax burden and operational compliance costs. The average patient will be out of pocket an average of $52 now. In August last year in a press release a practitioner owner of two clinics that service more than 107,000 Victorians said that he had no choice but to shut down after receiving a tax bill upward of $800,000. That is extremely worrying. We are seeing GPs close. Like I said, 185 clinics closed last year – that is devastating. I worry for the people, and the reason I chose this issue alone to talk about is that whatever the intention of this decision is – and I am sure it is well intentioned; I acknowledge that – there are unintended consequences that impact the most vulnerable in our society, those that do not have money to access health care and those that do not have a hospital to go to. Because I tell you what, there is not one in Pakenham. Promised, yes; delivered, no.

I just want to close in saying that over the last 10 years of Labor there have been 55 new or increased taxes. We are in more debt than any other state in this nation. We are more highly taxed than any other state in this nation. We can celebrate whatever successes we have, but we have to realise that we are here to serve the people, and at the moment the Labor government is not doing that well.

Evan Mulholland: I would just like to bring to the attention of the house that there is not a quorum present in this chamber.

Quorum formed.

Ann-Marie HERMANS (South-Eastern Metropolitan) (16:39): I also rise today to speak on the State Taxation Further Amendment Bill 2024. It is with great pleasure that I stand here to talk about what a disgrace it is with this government that we are in this situation. What is very interesting about these amendments is that they just go to show that the government makes up these taxes on the run and then afterwards realises what a mess it has made. Let us look at the section that has to do with land tax. Fancy this government having to tax charitable institutions that focus on property and relief from land tax. Now they are having to look at ways that they have to amend things. Why? Because people are paying an exorbitant amount of money in land tax, and they are the people who are offering relief. It is crazy. This government has taxed Victorians to the hilt, to the point that most of them are struggling to feed their families. I represent the South-Eastern Metropolitan Region, and I do that with tremendous pride. I have raised my four kids in the area. I live in the area. This is not an academic exercise for me. This is my home. It is the home of my grandparents, where they have been. It is the home where my parents lived and were married. It is the home of many cousins, uncles and aunties and many Christmases. So what happens in the area is very, very personal to me, and I care about the people and what this government are doing to them with their 56 new or increased taxes.

I find it extraordinary that we are even in this situation. It is like an afterthought: ‘Oh my goodness, we put all these bills through the house that have become law, and we are tax, tax, tax, tax, taxing people, and maybe we haven’t thought everything through.’ You are still not really thinking it through with some of these amendments, let me say that. It bothers me. It really does bother me when we look at the health tax. It bothers me when we even talk about the bulk-billing services and the fact that the local GPs are struggling to even offer that service. It is very difficult to have a bulk-billing service if you are being taxed to the hilt. Now, I know that some of the GPs that are in my area also live in the south-east and they, like everybody else, are struggling to feed their families in some ways because of the number of taxes that they are having to pay. It is extraordinary, when we look at the 56 new or increased taxes, that suddenly this government thinks, ‘Oh, maybe we need to revise some things because we’ve made a mess of it.’ Well, yes, you have made a mess of it. You have made an extraordinary mess of it.

If I was to go through some of the statistics of this government – and I do have some here – we would be here for hours. I could not possibly do it in the timeframe that I have because there are so many of them. The average household in Victoria is already $1100 worse off than the average New South Wales household. The Treasury emergency fund has been run dry by over $12 billion. In fact it is likely to be overspent by about $40 billion. We know in issues like youth crime that youth crime has soared to nearly 30 per cent higher than it used to be. Well, guess what that means. When youth crime soars, it means that people need to go to doctors because many of them get injured. They injure the regular people who live in their homes, and when people are injured, it means that they require more health care. When they require more health care, it means they have to go to the doctor. When they go to the doctor, if the doctors are not making enough money, they have to pass that on to the consumer.

I do not understand why the Labor government does not understand that when you add on taxes, for people to be able to survive, they have to pass that on to somebody else, because if they are not making money, basically they cannot do what they are doing themselves. There comes a point when someone goes, ‘I have to shut up shop because I cannot pay my bills and pay any wages to anybody else.’ That is what this is really about, the fact that we have a failed government that continues to fail, continues to fail in its financial structures and continues to fail in the laws that it imposes on everyday Victorians. This is a failing government. Let us have a look at some of these stats. They are really exciting statistics, except that they are impacting people in devastating ways. Debt – what are we looking at for debt, and why are we in this situation where we are having to now amend taxes? It is because our debt is set to be $187.8 billion, and that is just what we know about. That is up 742 per cent under the Jacinta Allan Labor government because they mismanage our money, they are reckless in their spending and they are continually taxing the Victorian people.

Let us look at taxes that were introduced to schools. I see that there might be some students up here. Taxes in schools – 56 new taxes have come in since this government came in, in 2015. We have had 56-plus taxes, and this is going to be an additional one. We are saying we are making amendments. I do not know how to even add that up. Do we add that for every additional change that has been put into the amendment, or do we just say there are too many in here that we cannot keep counting them? They are becoming so numerous that it is becoming a joke that Victorian people are constantly having to pay through the nose because this government cannot manage money. They introduced the schools tax. They introduced the holiday and tourism tax. At this point in time normally most residences are fully booked out across the summer because people are booking to go on their holidays. Most Victorians right now do not have the same spending money to do that. They cannot go on some of the holidays they used to be able to afford because they are paying through the nose if they have a mortgage and a family. Those people who are in families know their parents are paying through their noses. They know that their parents are struggling right now. They know that it is much tougher for them because this is a state that is in debt.

You do not have to even be in a home with a family to understand the state tax debts that we have got. You just have to drive on our roads – or preferably drive around some of our roads because of the number of potholes that are in our roads because of the mismanagement of funding. It was an interesting statistic that I looked at when it came to the funding of roads. This is just extraordinary. In 2018–19 the government put in, in terms of road surfacing, $191.9 million. Do you know what it put in for 2023–24? Back then it had 27 contracts; now they have got eight contracts. Do the maths. What would you be expecting? In this financial year we only spent $37.6 million on fixing our roads. That is why we cannot drive on them. That is why we are blowing our tyres.

I can tell you that just outside my office is this huge crater of a hole. I spoke in this place about it, and someone must have run out the next week and tried to fill it in. Let me say, just like this government, they did not fill it in properly. It has already sunk about 5 inches deep, and now it is a pothole once again, because you are not doing the job properly. When the cracks appear in the road, those tiny little cracks, that is when you resurface it. You do not wait until it has a whole bunch of potholes, because that means you have got to do the whole thing properly and do it again. But you are not doing it properly. You are not doing it again. You are just patching, so we are all sinking and blowing our tyres, and that is costing the taxpayers more money. Now they have to go and get their cars fixed and their tyres fixed because you are not fixing the roads properly in the first place. It is an absolute debacle, and Victorians are paying the price.

Let us take the Suburban Rail Loop, a $216 billion debacle that nobody asked for, nobody wanted. Yet you want to spend every cent that you are getting from our taxpayers on something that no-one wants or needs when we need our health care, we need our roads and we need funding for our schools. We need to have a much more sustainable cost of living. But no, you are going to tax us and you are going to waste it so you can have a gerrymandering exercise to take over all these electorates with your high-density, high-rise houses so you can say they are now all Labor electorates and there are no alternatives for democracy – we can only have Labor. What choice will we have? We will continue to be in debt, and this will continue to be the poorest state. After once being the jewel in the crown of Australia, this will be a poorer state under this Labor government, which has been in for 10 years – 10 years we have had Labor and 10 years of shameful 56-plus new or increased taxes.

Like I said, I do not even know how, in this particular bill, to add up the additions of taxes because of the number of things it touches upon. I am sitting there going, ‘Do we count that as an additional tax? How is this going to work?’ I always get worried when we make some of these amendments, and some of them look a little bit like you have put some thought into them, and I will give you credit for that. But I will say it bothers me, because I would like to know that this is going to be equitable, and with this government I cannot guarantee something is going to be equitable. How do I know it is not just going to be mates rates? ‘You guys, we’ll give it to you, because you are going to support us, so you’re our mate. We’ll give it to you, because we’ve got the discretionary power to be able to decide which people, which groups are going to get it, and we’ll give it to you. Oh, you? You’ll never vote for us, so we’re not going to give you anything.’ This kind of mentality that goes on in this government is just extraordinary. You do not give the taxpayers proper choice, and that really bothers me.

We are looking at a payroll tax as if these poor people had additional money. You are taxing them as if they were their own business – it is a GP, for goodness sake. Here is the other thing that you guys do not ever take into consideration – and I understand why, because you come from the union background where you have had somebody go in to bat for you to make sure that you had strong wages and strong conditions, but let me tell you: doctors do not have unions. Do you know what? Do you know what they start on when they are a resident doctor and they have a HECS debt that is a six-figure HECS debt? They can start on as little as between $50,000 and $60,000, and they can be working 15-hour shifts in hospitals.

Harriet Shing interjected.

Ann-Marie HERMANS: I am saying that these doctors do not deserve to have the types of taxes that you are putting on them. Do you know they can be paying off those HECS debts for years? Yet you think, ‘Doctor, we’re going to tax the living daylights out of you.’ That gives no-one any incentive to go and get an education when we have a Labor government, because everybody that gets educated gets so severely penalised – as if they are not already penalised having to pay off their HECS debt.

You guys do not understand economics. You do not understand how to run this state. You do not understand what you are doing, and that is why we are in so much debt. Labor cannot manage money, and Victorians are paying the price – it is as simple as that. Victorians are paying the price for a Labor government that does not know how to manage money.

Trung LUU (Western Metropolitan) (16:53): I rise today to make a brief contribution on the State Taxation Further Amendment Bill 2024. We on this side do not oppose the State Taxation Further Amendment Bill that has been brought to this chamber, but this bill does not go far enough to making essential services, such as seeing your local GP or dentist, more affordable for Victorians. As Liberal–‍Nationals we believe that medical practitioners and allied health professionals should be fully exempt from payroll tax. Over the last year over 185 clinics have closed in Australia. While we welcome this partial exemption from payroll tax for GPs offering bulk-billing, these measures do not go far enough.

This bill seeks to make changes to the Payroll Tax Act 2007, the Duties Act 2000 and the Land Tax Act 2005. I will briefly speak on the changes to the Payroll Tax Act 2007. This bill proposes amendments to parts of the Payroll Tax Act, including new clause 19B, which gives exemptions to GP medical businesses. This comes as a result of strong community campaigns in response to the Allan Labor government’s health tax. Labor are just taxing Victorians on whatever they can to pay for the enormous debt on their Suburban Rail Loop project in the eastern suburbs. The state electorate of Werribee has the second-highest rate of bulk-billing in Victoria. I know people of the west have spoken to me or come to fight along with the Liberals and Nationals and to take on the Allan Labor government to axe the GP tax and save bulk-billing. However, the Labor health tax should target private doctors and joint health professionals who do not bulk-bill.

The health tax takes away patients’ choice, pricing many working-class families out of the market for either specialist or private care. A government that imposes a tax on health care must realise that the more you burden the health system with taxes, the worse the outcome will be for the patient. This is why on this side of the chamber we do not support any health tax. Taxes on health do not make Victorians healthier. We do not make patients healthier by putting more tax on doctors and those in the health profession who are providing the service. We cannot encourage investment in the health industry by increasing taxes. Policies like these will make doctors move interstate, and clinics will divert their investment to other states such as Queensland, which fully exempts contractors and salaried GPs. Many of these entities operate as tenant practitioners, unrelated to each other. For example, a dentist can book a room in a medical clinic, a pathologist can book a room in a medical clinic and a psychologist can book a room in a medical clinic. They all operate as small businesses inside a medical clinic.

This is a desperate grab for tax by the Labor government. GPs who operate under their name with ABNs are sole traders, not employees, meaning they are not subject to payroll tax. However, the new proposal would reclassify associated health professionals who operate as independent contractors as employees. This would subject them to both the federal small business tax rate of 25 per cent and payroll tax, effectively leading to double taxing. It is unfair, and it is a burden on healthcare professionals – all to plug the government’s big budget hole. A State Revenue Office ruling classified that it is not just GP clinics that will be affected but all practices that follow business models where tenants are practitioners, such as dentists and partner health professionals operating on these premises. We have already seen over 156,000 businesses leave Victoria over the past 18 months due to Labor’s 55 new taxes. The role of a good government is to make sure it is easier, not harder, for businesses to invest and create jobs. As Liberals we understand that the more you grow the economy, the more you grow the tax base, allowing it to fund the essential services Victorians rely on.

The Allan Labor government has cut $36 million from the budget that would fund dentistry for the most vulnerable Victorians rather than providing essential services like dental care. Victorian dentists are concerned that individuals, particularly those of non-English-speaking backgrounds, which means most in my electorate, are delaying their routine dental care, potentially leading to a complete lack of it. Not only is the Allan Labor government slashing funds for dentistry, but it is also slapping on a health tax that makes dental care unaffordable for many working families in the west. The Australian Dental Association highlighted that the government has forced dental clinics across the state to determine whether they have to close or increase patient fees to cover their unexpected tax debts, through no fault of their own. Dental care is essential, not a luxury, and this situation puts this essential service at greater risk.

A recent survey by HotDoc revealed that 95 per cent of clinics would raise their prices in response to higher payroll tax obligations, highlighting the direct impact of the Allan Labor government’s policy on everyday Victorians. Raising taxes causes pain and suffering for Victorians. This shows that the Labor government cannot manage money, and Victorians are paying the price. Additional payroll tax is needed to help Victoria’s ballooning $150 billion debt, but it is unlikely that any of this money will be invested back into the health system. Victorians have had enough of poor management in the health system – and poor management in every major project. This Labor government has ended up taxing everything they can.

I will make this brief. In closing, we do not oppose this bill. The Liberals and Nationals believe that medical practitioners and allied health professionals should be fully exempt from payroll tax. Under the Liberals and Nationals, we believe we will deliver a wider scale reduction in land tax and completely scrap the health tax. These changes are crucial to ease the financial burden on Victorians, particularly those already struggling with high taxes and skyrocketing living costs. We believe that in the future Victorians should not be weighed down by excessive taxation but instead empowered with greater financial relief and opportunities for economic growth.

Motion agreed to.

Read second time.

Committed.

Committee

Clause 1 (17:02)

Just for the committee’s benefit, as is my usual practice I will try to get through all my questions in clause 1.

Harriet Shing interjected.

Evan MULHOLLAND: Do not tempt me. The State Taxation Further Amendment Bill 2024 proposes to partially repeal the tax exemption for bulk-billing GPs, with the cost of visiting a GP projected to rise by 30 per cent as a result of this tax. Why is the government not repealing this tax for all Victorians?

The government have been pretty clear in our desire to ensure that bulk-billing clinics are exempted from a payroll tax that has always existed. It is not something that we did as a government, changing the payroll tax system. We did not make changes. What we are now doing is exempting those clinics who provide a bulk-billed service. We would encourage all clinics to look at the way they could expand their bulk-billing services. What I would say is the information that I have, Mr Mulholland, is the 2023–24 Medicare annual statistics demonstrate that in Victoria the bulk-billing rate is around 78.2 per cent of services. We do not have access to clinic-level data on patient bulk-billing practices, but in relation to the vast majority of doctor visits in Victoria, they are bulk-billed.

The Primary Care Business Council has advised that the Victorian government will continue to collect approximately $100 million through your health tax. With many Victorian clinics already grappling with thin profit margins, how many clinics does the government expect will close next year?

I am not sure where you have got your figures from, but you have quoted an estimate from somewhere that does not align with the material provided to me by the Department of Treasury and Finance. I am advised that the exemption we are providing will cost around $26 million a year in forgone revenue.

I think you might have misheard. The Primary Care Business Council has advised that the Victorian government will continue to collect approximately $100 million.

Jaclyn SYMES: Sorry, I thought you were saying how much it cost us.

Evan MULHOLLAND: Has the government done any modelling or estimation of how many clinics it expects to close next year?

Mr Mulholland, again, just checking with the box: the figures that you have quoted are not figures that align with anything that the Department of Treasury and Finance can firm up. I just put on the record that I cannot confirm the figures that you have provided. In relation to modelling and what happens when clinics do not bulk-bill everyone and how that might impact on the delivery of services, the government has consulted extensively with the GPs and their peak bodies in developing the exemption, including the impact of the exemption on services across different types of GP clinics. As is usual practice, it is not our intention to release that modelling, but I can assure you that that is the practice that has occurred in the development of this policy.

This bill proposes to repeal the existing exemption for friendly societies, which are not-for-profit organisations focused on community services, including affordable housing, health services and retirement savings. The exemption currently applies to transfers of property or declarations of trust involving both charities and friendly societies, providing these organisations relief from duty on certain transactions. Under the bill, while charities will retain this exemption, friendly societies will lose it, subjecting them to properly transfer duties for the very first time. What is the rationale for taking away the current exemption for friendly societies?

Thank you for your question, Mr Mulholland, in relation to the changes for friendly societies and indeed those that used to be friendly societies and perhaps are no longer. The land transfer and landholder duty exemption for friendly societies is no longer appropriate for modern conditions. Entities that can meet the definition of a friendly society for the purpose of the exemption no longer have to have a mutual structure and beneficial objects, as was historically required. Whilst in the past friendly societies were required to have a mutual structure and beneficial objects under a legislative registration system in order to receive beneficial tax status, since 1999 this is no longer the case. Friendly societies are no longer required to have purposes that are beneficial to the community in the way that historical friendly societies provided social welfare to their members. The change has therefore been made to prevent entities that have a historical friendly society registration claiming the full duty exemption even if the entity is operating commercially for profit – that is, having demutualised and removed its beneficial objects. Victoria is the only jurisdiction to provide an unconditional land transfer and landholder duty exemption in this area, and as I said, this is certainly aimed at those that are technically, in the real world, no longer friendly societies.

This bill provides a vacant residential land tax exemption for alpine resorts. The Liberals and Nationals advocated for alpine resorts to be exempted from the government’s vacant residential land tax at the time the bill was being considered late last year – indeed I recall it. Given the seasonal nature of these properties, we knew it was impractical to treat these properties as vacant. Why has it taken the government a whole year to introduce this change?

Thank you for your question in relation to alpine resorts. From January 2025 vacant residential land will be expanded from the inner and middle suburbs of Melbourne to all of Victoria. As the snow season lasts only a few months, land use for accommodation in alpine areas is generally vacant for more than six months of the year. Given this, we have made the decision to do exactly as you outlined. I know that, as I said, it will be from January 2025.

Minister, in the departmental briefing the departmental officer confirmed that the reason for the GP tax was to move all GPs onto bulk-billing. Can you confirm that is the reason why we are using payroll tax on GPs?

I thank Mrs McArthur for her question, but she has mischaracterised what is happening here. The payroll tax obligation exists. What this bill is doing is providing an exemption for those that provide bulk-billing services.

But those that are not providing bulk-billing – that is, those that provide a service to private patients – are being taxed, and the reason, we gathered in the briefing, was that you want all GPs to bulk-bill. Can you confirm that?

Again, as I said, the requirement to pay payroll tax is not something that we have altered. The bill exempts those that provide bulk-billing services from having to pay payroll tax.

But why won’t you exempt all GPs who are providing health services to all patients, whether they are private or bulk-billed?

This is something that we have decided is good government policy and good for the community, as we have said. The exemption proposed will give payroll tax exemptions to GPs that provide bulk-billed consults, and we hope that this has an outcome of encouraging the provision of more bulk-billed consults in Victoria. This is something that many Victorians would like to see.

That does confirm what the agenda is here. Can you tell us how this will affect rural general practices, many of whom do not bulk-bill and cannot afford to bulk-bill? We are lucky to have GPs in many areas, so we do not want to lose them. How many GPs will be lost in rural Victoria as a result of the fact that they will have to pay a payroll tax?

We are not expecting the loss or closure of any GP clinics. The government expects that the decision to provide an exemption from payroll tax for payments to contractor and employee GPs in relation to bulk-billed consults will support more bulk-billed GP consults for Victorians and improve access to GP services, including in rural Victoria.

In terms of the application of payroll tax to general practice, in May the Treasurer announced that he would use his ex gratia powers to ensure that no practices would have retrospective liabilities made payable. Can you confirm that that will be the case and that no practices will face any new retrospective liabilities when it comes to payroll tax?

Thank you, Dr Mansfield, for your question and the opportunity to confirm some comments that the Treasurer has made. Prior to the changes announced in May there had been no change to the payroll tax or its application to GPs, as I explained to Mrs McArthur. The longstanding contractor provisions, which apply across industries and are harmonised across most states, had always applied to GP businesses – that is, GP businesses could be liable for payroll tax on payments to contractors depending upon the specific nature of that contractual relationship. In May the government announced that all Victorian general practice businesses will receive an exemption from any outstanding or future assessment issued for payroll tax on payments to contractor GPs for the period up to 30 June 2024. A further 12-month exemption from payroll tax for payments to contractor GPs through to 30 June 2025 will be available for any general practice business that has not already received advice and begun paying payroll tax on payments to their contractor GPs on this basis. The exemption will be provided through the Treasurer’s existing ex gratia powers and is not addressed in this bill. That this exemption would be applied in this way under any Labor government is the commitment the Treasurer has asked me to provide.

In terms of any practice that may find itself being faced with payroll tax liabilities that they are unable to meet for whatever reason, what support will be available? What avenues do they have to get advice or support regarding that? I appreciate that with the rulings regarding payroll tax and the application of them nothing had technically changed in the way that they were written, but this problem has arisen because the on-the-ground interpretation and application of it changed fundamentally for general practice. This bill before us is an acknowledgement of that. I suspect there are still a lot of practices with some uncertainty about what this will mean for them, some of whom are worried about getting into difficulties. What support or advice will be provided to practices to help them understand that, and if they run into any problems, where can they go?

I thank Dr Mansfield for her question and the way she has characterised where we are at. There is of course an acknowledgement from government that custom and practice and what was occurring on the ground, even though the law and rules were quite applicable to GPs, was not necessarily well understood. Indeed even people’s financial advisers were giving them advice et cetera, so we are certainly conscious of that. Changes have come about, obviously, and people have realised that it is applicable. There have been court cases to that effect and the like, and it is a recognition of that that has almost brought us to this point in relation to this legislation. There is extensive information about payroll tax on the State Revenue Office website, and practices can seek a private ruling from the SRO. We are conscious that there will be an impact, because it is a change in practical terms for people regardless of the fact that the rules did not really change, but we understand that this will be an impact on businesses. Again, as I have indicated to members of the opposition, we would hope to see many people consider extending their bulk-billing services. As I have outlined, 80 per cent of doctors visits now are bulk-billed. But for those who will now be looking at payroll obligations that they may not have been expecting, we would urge them to seek advice through their advisers and assistance from the SRO.

In developing this compromise approach to dealing with the payroll tax issue, who did the government consult? Can you indicate whether there will be ongoing engagement with stakeholders to understand what the impacts of these changes are, and can you commit to continuing to engage with stakeholders beyond the passage of this bill should it pass today?

As I outlined in relation to the development of the policy, the modelling and the considerations that underpin the decisions that you can see in the bill today, government has consulted with GPs and their peak bodies. In relation to further engagement, there is a pre-existing relationship between a lot of these bodies and the government, so I am sure conversations can continue. Some of the bodies that we regularly engage with are the Royal Australian College of General Practitioners, the AMA and the Australian General Practice Alliance.

This exemption is for GPs, but it does not, as we know, include other allied health professionals, like dentists, who often work in these medical clinics. What is the reason that dentists have been excluded?

As we have said all along and apart from the changes regarding GP bulk-billed consults that we are announcing today, there has not been any change to the existing payroll tax.

In that regard, yes, I understand that that is the government’s line, but in practice that is not actually what has been happening, because GPs have presented to the Royal Australian College of General Practitioners and showed them the bills they have been receiving from the State Revenue Office as a result of the government going after this. Now we have got the exemption I presume that those medical clinics or those GPs will not have those bills, but it does not exempt those people such as dentists, podiatrists or other allied health professionals working in medical clinics, and therefore those medical clinics will be subjected to the payroll tax. Again, is there some reason why allied health professionals in a medical clinic are not exempt, as GPs are?

We recognise the unique role that GPs play in our community, and we always want to back them. This is despite the fact that they are primary care, which is predominantly a responsibility of the Commonwealth. However, as we have seen, we are investing in priority primary care centres and the like, so in relation to the state stepping into this space, we have shown our commitment because we know the value that they provide. It is our contention that bulk-billing plays a critical role in getting patients early care and that rates have been declining due to the decade of neglect by the former federal coalition government. That is why we are providing an exemption to the GPs who provide bulk-billed consults. There is an existing issue in relation to access to GPs – you guys have been saying it yourselves – so we are making positive changes. We want to create an incentive for more bulk-billed consults in Victoria. The role of bulk-billed consults with a general practitioner is not the same as how Victorians access other kinds of health care, which is why we are not extending the exemption beyond GPs who bulk-bill.

A very unsatisfactory answer for those dentists. I hope they are listening to this and what you have just explained to the house. Minister, has the government set aside any money for potential legal challenges to this decision that you are bringing in through this legislation, given it does not capture all GPs?

I am not sure that we are going to face legal action from people who are concerned that we are exempting them from payroll tax.

That is the problem; you do not actually understand what is happening here. There are many medical clinics that are going to be captured and not exempt. They are still going to have to pay a huge amount of payroll tax. What is the government going to do when those legal challenges commence?

Your line of questioning is outside the bill, but I would draw your attention to the information that I have that there are legal cases, one in particular out of New South Wales, that demonstrate that the payroll tax system would be applicable to the medical professions that we have been discussing today. That is why we are taking action to exempt a certain cohort from a payroll responsibility that we did not impose and we are not changing.

You and I both know that you would not have brought this legislation into this place without the campaign that was mounted against your government because of the unfairness of what you were doing. The Treasurer was going after GPs on this health tax. They mounted a campaign, and I am very glad that they did. The AMA, the college of general practitioners and others mounted that campaign against the government because GP clinics are going to close down. They are facing rising consumable costs and a whole range of other costs that they are dealing with, and they have said in regional Victoria it will impact them. My question is: what modelling has the government done about the impact to regional general practice for those ones that are not going to be fully exempt?

It is the last day of Parliament for the year, and you have asked a question that your colleagues just asked when you were not in the room. When you have a shadow minister that has asked the exact question that formerly two members of her team have asked me, I just think it is a bit embarrassing. In relation to the modelling question, we consulted extensively with GPs and their peak bodies in developing the exemption. We do not anticipate any closures. We have been in dialogue with the peaks and delivered what they asked for – certainty and clarity. They have told us that they support the package that was announced by the government and they support this legislation.

I would have concluded my contributions by now, but you have just actually said something that is not quite true. Mr Mulholland has shown me and I knew what questions he was asking, and that is not what I was asking. Mrs McArthur may have asked something. Do you know what I was doing? I was out of the chamber talking about a woman who is getting IVF under your government at a prison. That is what I was dealing with, so I did not hear Mrs McArthur. I am going to ask again about the impact to regional Victoria. Could you repeat it for the house so I can understand it? I have got another follow-up question. I am terribly sorry if that is too much trouble for you.

I am more than happy to repeat my answers. The impact on rural GPs was an issue that Mrs McArthur was quite interested in. We are confident that applying the exemption will not cause the closure or loss of any clinics. The government expects the decision to provide an exemption from payroll tax for payments that are required to be made under the law will, hopefully, encourage and support more bulk-billed GP consults for Victorians and improve access to GP services, including in rural Victoria.

My apologies if Mrs McArthur asked this one. Given that there are GPs who have expressed their concern about the impacts of your payroll tax to their clinics, because they do not have 100 per cent bulk-billing and they are concerned about the impacts to their patients, what advice has the government received in relation to those patients that would need to seek services elsewhere should these clinics close? Has the government looked at any further modelling in relation to the pressures on the system when the amalgamations of hospitals occur?

Again, this bill is about exempting certain cohorts from an existing payroll tax obligation. We have been in dialogue with the peaks, and we have delivered what they have asked for – certainty and clarity – and my information is that the peaks support the package and the legislation.

I will just make a final statement, just to say that I congratulate all those GPs that rallied against the government’s health tax and put pressure on the government to give some exemption. It is a partial exemption. It is not going to have the dire consequences that originally were proposed when the Treasurer was going after GPs on their health tax. However, it is the Liberals’ and Nationals’ contention that it does not go far enough and that there will be impacts into regional Victoria, especially once services go in regional towns when amalgamations of health services occur. I just make that statement, because it has been a short-sighted tax grab by the government because of the dire financial situation of the state.

Just to respond to some of the comments, this legislation is about exempting certain people from payroll tax. Ms Crozier, I will repeat some of the information that I put on the record for other members. The advice I have from the Medicare annual statistics is that 78.2 per cent of visits to a GP are bulk-billed. We do not have access to clinic-level data on patient bulk-billing practices, but I want to note that medical clinics will not be required to bulk-bill all patients to benefit from the ongoing exemption that commences from July 2025; it will be based on clinic-level bulk-billing service rates. So there will be the opportunity for GPs to access an exemption if they bulk-bill some of their patients.

I move:

1. Clause 1, page 2, line 27, omit “a partial” and insert “an”.

This is a test for all of my other amendments. I would just like to say – I went into a bit more detail in my speech – it seeks to amend the Payroll Tax Act 2007 to actually provide a full exemption from payroll tax on GPs’ wages. Ms Crozier was speaking about dentists as well. I know many allied health clinics would certainly appreciate an exemption from payroll tax. In fact I was at the People First Healthcare carols on the weekend, and I know Ms Crozier has actually met Dr Mohammed from People First Healthcare in Roxburgh Park. They are certainly advocating for that, and I told him we would be moving some amendments. It is also our election commitment to completely scrap Labor’s very bad health tax, which is impacting our communities at the moment.

The government will not be supporting the amendment for the reasons that were well outlined in the conversations I have been having with members in the chamber.

Council divided on amendment:

Ayes (17): Melina Bath, Jeff Bourman, Gaelle Broad, Georgie Crozier, David Davis, Moira Deeming, Renee Heath, Ann-Marie Hermans, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Nick McGowan, Evan Mulholland, Rikkie-Lee Tyrrell, Richard Welch

Noes (22): Ryan Batchelor, John Berger, Lizzie Blandthorn, Katherine Copsey, Enver Erdogan, Jacinta Ermacora, David Ettershank, Michael Galea, Anasina Gray-Barberio, Shaun Leane, Sarah Mansfield, Tom McIntosh, Rachel Payne, Aiv Puglielli, Georgie Purcell, Harriet Shing, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Sonja Terpstra, Gayle Tierney, Sheena Watt

Amendment negatived.

Clause agreed to; clauses 2 to 100 agreed to.

Reported to house without amendment.

Jaclyn SYMES (Northern Victoria – Attorney-General, Minister for Emergency Services) (17:41): I move:

That the report be now adopted.

Motion agreed to.

Report adopted.

Third reading

Jaclyn SYMES (Northern Victoria – Attorney-General, Minister for Emergency Services) (17:41): I move:

That the bill be now read a third time.

Motion agreed to.

Read third time.

The PRESIDENT: Pursuant to standing order 14.28, the bill will be returned to the Assembly with a message informing them that the Council have agreed to the bill without amendment.