Sunday, 28 February 2010

Growth Area Infrastructure Charge

Victorian Parliament Hansard 23rd February 2010

Mr KAVANAGH (Western Victoria) -- I would like to note first of all that the debate on the growth areas infrastructure contribution (GAIC) is not beginning tonight in this chamber. Indeed the debate has been going on for quite some time.

One of the most memorable times I recall in this house was a response by the Minister for Planning to a question about the GAIC quite some months ago. There are about 10 000 performers outside Parliament House at the moment, but if they had been here some months ago, they would have seen a performance like no other from the Minister for Planning!

The main problem with this bill is that the timing of the GAIC is extremely inappropriate. That is the main problem so far as most of the opposition is concerned, and it is also my concern with the bill. In spite of claims from the government that the non-government parties have been unremittingly negative about the GAIC bill, from my perspective it seems that the non-government

parties have been prepared to negotiate but the government has shown no interest in that.
Over and again both the coalition and I have indicated that we would be prepared to support this bill if the GAIC were to be made payable not at the time of sale, which the bill currently proposes, but at the time of an application for development. To that end I have proposed some amendments which I seek to have circulated.

Democratic Labor Party amendments circulated by Mr KAVANAGH (Western Victoria) pursuant to standing orders.

Mr KAVANAGH -- Although there are 165 of them, the amendments have only two effects.

The first is to make the GAIC payable at the time of an application for development, and the second is to set the interest rate on staged payments of the GAIC at the total of the bill rate plus 3 per cent.

I understand that my vote on this occasion is unlikely to be critical, but I would like to express my intention. I will vote for the bill only if the payment of the GAIC is made at the point of application for development -- that is, if the amendments pass. However, the problem of timing is not the only problem with this bill. To set a figure of $95 000 per hectare regardless of the value of the land seems to me to be a mistake. It is unfair because the value of affected land is likely to vary greatly. Rather like our land tax situation at the moment, the proposed GAIC has no relationship to the potential profit of the land involved -- that is, even land which may be worth only $95 000 a hectare is still taxed at that rate. Indeed we could have a 100 per cent tax, in theory at least, which I think is entirely wrong.

In my view we should have a constitutional requirement that tax cannot be as high as 50 per cent of profit or income; otherwise people are actually working the majority of their lives for the government.

This figure of $95 000 a hectare is particularly inappropriate in the case of Western Victoria Region, which of course is my electorate. For example, land at Melton is likely to be worth, on average, much less than land in some other parts of Victoria, so the imposition will be much greater in Melton, and indeed Rockbank, than it is likely to be in the far outer eastern suburbs of Melbourne.

In addition, I am concerned by what Mr Hall regards as a retrospective tax. In general we should avoid retrospective legislation wherever possible. It is occasionally necessary but in general it is a fascist type of measure that should be avoided wherever possible.

Mrs Petrovich -- Did you say fascist?

Mr KAVANAGH -- Yes, I said 'fascist'.

I think Mr Hall explained the objections to retrospective tax very well indeed, so I do not need to speak more about that.

As other speakers have said, the land that would be taxed under this bill represents a nest egg for many people. Indeed some of them have held on to land for decades -- generations -- in the hope that they would make a gain in the future that might provide for their retirement. It seems even cruel on occasion to just come along and take that from people who have worked so hard for so long for that advantage.

Of course taxes like this will affect home affordability, which is a growing problem in Melbourne and indeed throughout Victoria. Not so long ago one of the great things about Australia was that an ordinary family man might provide for his family and put a roof over their heads -- decent accommodation -- with the proceeds of an ordinary job. Unfortunately that no longer is the case. Last month it was revealed that because of changes made by the federal cabinet to visa requirements 40 per cent of the best houses in the best suburbs of Melbourne are now being bought by non-residents, in many cases people who have never even been to Melbourne.

Real estate agents, who do not have a very strong interest in opposing this -- quite the opposite -- tell us that a lot of these people, who are often officials of the Chinese Communist Party, cannot be bothered renting out the properties for what to them is a rather paltry amount of money and they leave the houses locked up, empty, for years on end in the hope of getting a big capital gain at the end. It is absolutely outrageous in my opinion that people who have never even been to Australia are speculating on our homes at the expense of Australian families. I believe that should be changed.

I did consider perhaps giving the government political advice on this bill, but I am sure it knows politics much better than I do so, I suppose, it would be rather impertinent of me to offer it that advice. No doubt the government knows its interests very well indeed.

But it does seem to me it is probably creating a problem for itself in the long term, because if this bill continues and this issue is still live at the time of the next state election, there are very many people in the far outer areas of Melbourne who will be extremely upset and concerned, and I do not think that will do Mr Brumby's government very much good at the polling booths.

In conclusion I just say that if by any chance my amendments were to be accepted, I would vote for the bill. The amendments have the effect of making the GAIC payable at the time of development rather than sale. Otherwise I do not see how I could support the growth areas infrastructure contribution.


Peter Kavanagh MLC
Member for Western Victoria
Parliament of Victoria

"La Cabine"
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1 Yarra Street
Geelong VIC 3220

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