Legislative Assembly for the ACT: 2002 Week 10 Hansard (27 August) . . Page.. 2799 ..
MR SMYTH (continuing):
I will address matters in detail as we go through the budget part by part. This is a budget that lacks vision and a budget that proves that we have a lazy government.
MS TUCKER (11.03): I will speak to the Revenue Legislation Amendment Bill now and speak later to the budget. This bill implements two revenue initiatives announced in the budget. The first relates to payroll tax and changes the definition of wages so that it includes lump sum payments for annual leave, unused long service leave and eligible termination payments. It also changes the value of fringe benefits associated with a wage.
I understand that these changes bring our payroll tax rules into line with other jurisdictions and will simplify payroll tax calculations for employers who have staff in different states. These changes will result in a 1.1 per cent increase in payroll tax liability for employers over the threshold, with total revenue for this initiative estimated to be $2.3 million in 2002-03.
In principle, the Greens would prefer that payroll tax be reduced, as it is a tax on employment, and for taxes on resource consumption to be increased because of its environmental impact. However, this change is more in the nature of clarifying and making more comprehensive the definition of wages for the purposes of calculating payroll tax rather than a straight increase in the tax rate. Businesses with small payrolls will continue to be exempt from the tax.
The second revenue measure relates to land tax. The bill makes residential property owned by a company or trust liable for land tax from 1 October, even if not rented. Various exemptions are provided-for example, property held by a builder while residences are being constructed and property held in trust in relation to a deceased estate. This measure will bring in some half a million dollars this financial year.
I would regard this measure as closing a loophole in the act and making it more equitable. Companies and trusts which own residential property have not been subject to land tax in the past, whereas individual landlords have been. Yet they all own residential property from which they are deriving financial benefit.
I note, however, that the Treasurer said in his budget media statements that the government would consider deferment, exemptions or waivers for taxpayers with compelling circumstances that suffer any unintended or adverse impacts of the new revenue measures. I have already been approached by one constituent whose house is owned by a family trust that was set up as retirement income and who believes that he will be badly affected by the measure. I understand that this person has also contacted the Treasurer's office. I hope that Treasury will fully consider any cases like this that arise, to see whether or not assistance is warranted.
The bill also changes the land tax rates for non-residential property. The marginal land tax rate for non-residential properties valued above $100,000 has been increased from 1.25 per cent to 1.4 per cent and for non-residential properties over $200,000 from 1.5 per cent to 1.7 per cent. This measure is expected to bring in $1.56 million this financial year.