Page 1809 - Week 07 - Wednesday, 19 August 1992
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
MR KAINE: I can hear the Minister muttering. Tax cannot, in fairness, be levied on a property simply because it has a potential for income earning. I heard the Chief Minister make this statement the other day on the floor of this house: If it has a potential for income earning, it should be taxed. That is a basic and fundamental error.
If such a definition were to be adopted, you would have to say that all residential property, including the principal residence, should be taxed, because clearly any owner can move out of his house into a rental property and let his house; it has an income earning potential. Indeed, I suggest that some people have probably done that to reduce the financial burden. If they cannot manage the mortgage payments, they move out, move into cheaper rental accommodation, let their house and negative gear it; and it gets them off the financial treadmill for a short time. Clearly, any property has a potential for earning income. By the Chief Minister's definition, all residential property should be taxed - and I do not think even the Government would suggest that.
The Bill that we have put before the house today seeks to clarify the original intention of the Act and to provide exemptions for those who should not be liable for this tax. It also attempts to create circumstances where those who are liable for the tax are able to discharge their obligations fairly and without undue stress. Finally, it seeks to provide some broader discretionary powers for the Commissioner for Revenue to determine appeals. In fact, under the present Act, it is totally inflexible. The Commissioner for Revenue has very little scope and the responses that he has written to people seeking relief demonstrate that. Time and time again, he has said to people with an obvious case for being given a waiver or an exemption, "I cannot do that, because I do not have the discretion to do so".
Madam Speaker, the Bill will achieve these objectives by amending sections 4 and 22 of the Act. Amendment of section 4 of the principal Act will provide for payment by instalments and the instalments will be separated from payments of rates. In other words, if people are subject to both rates and land tax, the instalments will not fall due on the same day. A lot of people that are subject to this land tax are on fixed incomes. In fact, many of them bought a second house to provide themselves with an income. It will allow them to spread the burden of the land tax and the rates over the year and take off some of the financial stress - but, of course, that is only in cases where they are liable for the tax anyway.
Section 22B of the principal Act will be amended to broaden the exemptions that are available for residential property. At present, the owner of the land is the only exempt occupier, and even that is a matter for interpretation in many cases. The Bill defines the exemption in terms of the land use, not the status of the occupant. We believe that that is unreasonable and unfair. The emphasis is on the earning of income, with exemption for a residence that is not used to produce income. This amendment would cover life tenants and a range of other people who are residents of property, but not the owners, where no rent is paid. In many cases, members of the family are occupying the residence. Where no rent is paid, where there is clearly no landlord-tenant relationship in existence, we say the imposition of this tax is unreasonable and unfair.
Madam Speaker, there is also no assumption in these amendments that the exemption should be restricted to only one house. What has happened is that people have been caught moving between houses. They were actually not living in either house on 1 July. They were not getting any rental from either of them
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .