Premier stands ground on land tax as third rewrite falls flat
A third do-over on the government’s controversial land tax reforms went up in smoke within 24 hours. But the Premier is still not admitting defeat.
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Premier Steven Marshall is refusing to walk away from his troubled land tax reforms, despite Labor and key crossbenchers combining to doom a third major rewrite of the plan.
Labor won’t support a move it says would retrospectively lift tax on small business and investors. But the sceptical crossbenchers say they are still open to a different bargain.
A peace deal between the influential Property Council lobby and State Government that was announced on Monday night, the third major rewrite of the policy since the June Budget, was shot down in less than 24 hours as Labor and crossbenchers rejected it.
It would have offered additional rate relief to investors and companies with land portfolios valued over $1 million, while still closing a claimed “loophole” that allows tax minimisation through the use of complex legal structures.
Opposition Leader Peter Malinauskas said closing the loophole would punish people who had followed the law of the land and planned for retirement or business expansion.
Mr Malinauskas said the Government’s plan, which cuts tax rates at the top end but ends up increasing Budget revenue as the loophole closes, would hurt job creation.
“We have spoken to all industry groups,” he said. “We have gone out and conducted public forums.
“Almost none of them support it. Labor has heard your call, your voices will not go unanswered.”
SA Best MP Frank Pangallo said the Government’s latest attempt to win crossbench support included “some moves in the right direction, but it just doesn’t go far enough”.
He said grandfathering the changes, so that the loophole closure only affected new land purchases made after the legislation passed, could be enough to secure agreement. The Government has said that would be administratively impossible.
Mr Pangallo said: “Aggregation is an unfair impost.
“If they want to consider a grandfathering clause, well that might open the door for further negotiations,” he said.
Upper House independent John Darley said even the Government’s most recent plan left SA in an uncompetitive position when compared to states like Victoria and NSW.
“It’s all very well to reduce the top scale,” he said.
“I’m concerned about those mum and dad investors in the middle, who I believe are going to be paying the lion’s share.
“If the rates could be changed in such a way that overcame the aggregation problem, that might be worth looking at.”
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New land tax rewrite rushed through Cabinet
The Government still plans to force a vote by December and has not ruled out further changes to secure support, saying a rejection by the parliament would put land tax in the too hard basket for decades and mean the top rate on SA investors stays far too high.
In Question Time, Mr Marshall said: “We’ve never said on this side of the chamber that reform is easy but, let me tell you, it’s necessary.
“We are very proud of the fact that we have the backbone to actually stand up for reform in SA, unlike the … jellyfish leader of the Opposition, who has no backbone.”