Steven Marshall’s land tax reforms appear doomed as Labor opposes new rewrite of SA policy
The Premier’s latest land tax reform package appears dead in the water, with Labor declaring its opposition to the plan and key crossbenchers preparing to block it.
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Premier Steven Marshall’s land tax reforms appear doomed, as Labor finally declares its hand and key crossbenchers prepare to block it.
Opposition Leader Peter Malinauskas on Tuesday said Labor would oppose the plan, as it would increase taxes on small business and hurt job creation.
“Based on this broad consultation, Labor simply can not support these unfair land tax hikes which will hurt local jobs, hurt small businesses and drive up rents,” he said
Key crossbenchers SA Best and independent MP John Darley will oppose the plan in its current form, delivering the votes in combination with Labor to stop the change. The Government's only option now is to rewrite the reform package or accept defeat.
As revealed in The Advertiser today, Treasurer Rob Lucas had secured an 11th-hour land tax peace deal with industry, as a third policy rewrite since the State Budget was rushed through the Liberal party room on Monday night.
The surprise changes were pushed through Cabinet and then the party room at pace on Monday, just as the Opposition was readying to make a decision on a now-outdated version of the plan that was expected to be the focus of debate in parliament this week.
It is understood several Liberal MPs flagged grave ongoing concerns with the Government’s land tax policy at the weekend, including warnings that some would reserve their rights to cross the floor over it.
The proposed new land tax deal delivered extra relief to investors with portfolios valued over $1.1 million, but kept controversial aggregation changes that had enraged developers.
Property Council of Australia SA executive director Daniel Gannon, the loudest critic of earlier versions of the reform, said his “fight for a fair go” had secured a “compromise”.
The Government’s latest plan sought to introduce a new 2.0 per cent tax rate, which would apply to land portfolios valued between $1.1 million and $1.35 million from July 1 next year. That bracket would be expanded to include investments of up to $1.6 million, in 2022.
Mr Lucas said the reform had been difficult but was too important to walk away from.
“I think this is a once-in-a-generation attempt at genuine land tax reform,” he said. “If this doesn’t go through, I can’t see any government ... being willing to take it on.
“We welcome the Property Council’s support. We hope Labor and the crossbenchers will reconsider what is an endeavour by the Government to put a fair package out there.
“We think it is in the state’s best interests. If this (change) is something which can assist the reform to get through, then it’s certainly worth the additional effort.” Mr Lucas said detail of the compromise had only been agreed “in recent times”.
Mr Gannon said land tax changes announced in the Budget “blindsided investors and undermined confidence”, while putting SA’s “investment environment at significant risk”. “On balance, we now believe that property owners face a fairer situation,” Mr Gannon said.
“While SA’s proposed land tax rates are still less competitive than other jurisdictions, the downward trajectory is an important one.
It is now our belief that this Bill is a workable compromise and as such should receive support and proceed through the parliament.”
Despite the Property Council backing, other industry groups retained significant opposition to even the latest government plan.
Master Builders SA chief executive Ian Markos said he wanted a land tax regime that encourages people to invest in South Australia.
This latest rewrite came a fortnight after Premier Steven Marshall introduced and spruiked a now-outdated land tax plan to parliament.
Last year, parliament passed separate reforms that will lift the land tax-free threshold and result in no bills for people with properties or portfolios valued under $450,000.
That move alone is estimated to deliver relief for about 9000 investors.