Legislative Assembly for the ACT: 2012 Week 7 Hansard (7 June) . . Page.. 2826..
Duties (Landholders) Amendment Bill 2012
Debate resumed from 10 May 2012, on motion by Mr Barr:
That this bill be agreed to in principle.
MR SMYTH (Brindabella) (12.08): The opposition will be supporting the passage of this bill, and I thank the Treasurer's office for providing a useful briefing on the bill. This bill deals with a relatively straightforward matter, although to understand what is proposed becomes quite complex, particularly because of the language used and because of the way in which ACT legislation relates to equivalent legislation in New South Wales.
The purpose of this bill is to remove some unnecessary regulation applying to people and organisations having an interest in landholdings in the ACT and to align the relevant legislation in the ACT with the equivalent provisions in New South Wales.
At present in the ACT, a person will pay duty on a transaction involving entities with landholdings only if the transaction is a "relevant acquisition". A transaction involves a "relevant acquisition"only if the acquisition leads to the holding of a "significant interest". Again, at present, a "significant interest"in the ACT is defined as having an interest of at least 20 per cent. There are other associated provisions but these are not material to the proposals in this bill.
In New South Wales private companies and unit trusts have a "relevant acquisition"when the significant interest is at least 50 per cent. In addition to the "significant interest"requirement, there are also considerable complexities involved in the administration of private companies and unit trusts.
These complexities arise as persons and entities change the extent of their involvement in private companies and unit trusts. Relevant interests have to be determined continually. Superimposed over these issues is the need to manage not only the local investors but also national and international investors. In New South Wales private companies and unit trusts are treated identically with respect to landholder provisions. The consequence of the differing thresholds and the administration involved means that the ACT is not a favoured destination for investment in these types of activities.
The bill we are debating will align the position relating to "significant interests"in the ACT with that applying in New South Wales. The bill also will remove the distinction between private companies and unit trusts and, as a result, will remove a number of reporting requirements.
The outcome of these amendments will be to make the ACT a far more attractive destination for investment capital from local, national and international investors.
There is a related issue that has been raised with me, and this relates to the precise wording of these types of provisions. I can illustrate this concern with three examples of provisions dealing with landholder interests.