Page 4951 - Week 15 - Thursday, 15 December 2005

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Revenue Legislation Amendment Bill 2005 (No 2)

Debate resumed.

MR SMYTH (Brindabella—Leader of the Opposition) (4.39): The debate today on the Revenue Legislation Amendment Bill 2005 (No 2) provides us with another opportunity to examine some of the marks of this Treasurer’s time in office. As my colleague Mr Mulcahy has pointed out, this bill, while proposing a number of useful amendments, also proposes a silly change to the way in which certain motor vehicles are to be valued for duty purposes.

There is a strong sense of deja vu about this proposal relating to motor vehicles. Many of us will recall the history of failure of this government with respect to taxation proposals. This history of failure has involved what seems to be an inability to research taxation proposals properly. It is timely for us to revisit this sad history of failure by this government because, as we all know, history has a habit of repeating itself—and that is what we have again from this Treasurer.

Let us talk about the loan security tax. As part of the 2003-04 budget, this Treasurer proposed the introduction of a loan security tax. What a fine example of a fiasco in public policy making the consideration of this tax turned out to be, what a mix of sloppiness and laziness in research and execution. We were first informed of the proposed loan security tax when the 2003 budget was brought down. It is interesting to see the words used in budget paper No 3 at that time to support the proposal: the proposed duty would “bring the ACT into line with the rest of Australia”.

That statement was incorrect because the Northern Territory did not have that tax. But, more importantly, the research conducted by this Treasurer into the tax was completely deficient because, when this Treasurer introduced the tax proposal, he said that the policy in the ACT “will operate on a similar basis to that in Victoria”. What he did not tell us, because he presumably did not know, was that Victoria at that time had already enacted legislation to abolish this tax as from 1 July 2004, and Western Australia had already announced that it would remove this tax from unsecured loans.

As if this was not bad enough, because we should expect better from a Treasurer with all the resources that he has at his disposal, we then had an admission from our Treasurer that there could be some adverse unintended consequences arising from the loan security tax. The Treasurer told the ACT community that the proposed loan security tax could lead to an unintended double taxation of transactions. He then said that further research was necessary to establish whether there would be any unintended outcomes. He also told the community that the tax would not apply to family trusts. A few days later, the Treasurer had to correct that information and tell us that the tax would apply to family trusts.

So we had from this government a proposal for a new tax that clearly had not been properly researched and claims about this tax as it existed in other jurisdictions that were incorrect. In the first instance, this Treasurer deferred the implementation of the loan security tax. The good news for the ACT community was that the Treasurer abandoned this proposal in August 2003. What a sad story of incompetence and sloppiness from this

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