Page 2302 - Week 09 - Tuesday, 15 September 1992
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The exemption of non-income-earning property completely ignores the other very important reasons for investing in property - I have mentioned them before - such as capital gains, negative gearing, tax advantage and so on. Madam Speaker, the period during which the property is earning income is simply not specified. The options are therefore that tax is payable if the income was earned on the prescribed day, 1 July, or the income was earned on any particular day, or only on those days on which income was earned. The Bill is unclear. Mr Kaine has not made us privy to his intentions in that regard.
Because the exemptions provisions have been broadened to allow eligibility to be established in respect of any person occupying a residence, I think tax avoidance would be widespread. For example, Madam Speaker, income may not be the same as discharge of liabilities. Through you, Madam Speaker, I ask Mr Kaine, "Does this permit an arrangement whereby the tenant actually pays the mortgage? Does that involve income under Mr Kaine's Bill?". We do not know. He has left it to the commissioner to work out all of that.
Another area where Mr Kaine's Bill, I think, is particularly vague and particularly dangerous is paragraph 4(d), which removes the provision which precludes corporate bodies and trusts from exemption provisions. Again, Madam Speaker, this matter has a lot to do with the stamp duty amnesty, which I have already announced. The removal of the provision, which Mr Kaine provides, would have overcome problems for a small number of residents; but because of the broad application that is involved in his Bill it, again, would provide opportunities for schemes to be developed to avoid the payment of the tax. For example, Madam Speaker, Mr Kaine's provision would allow corporate bodies providing employees with housing as part of a salary package to obtain an exemption from land tax. Clearly, that is not the intention of the Bill.
Madam Speaker, as I say, there are a number of difficulties with Mr Kaine's Bill and he is right in saying that our two pieces of legislation are very different. In saying that, of course, he is saying something very different from what Mr Humphries is saying, which is that they are almost the same. The Liberals really are going to have to get their act together at some stage. Madam Speaker, I put it to you that Mr Kaine's Bill is absolutely no way to make tax laws. I believe that such laws should be as clear as possible and be objective to the maximum extent possible so that taxpayers are aware of their responsibilities and rights. We should reduce, not increase, the need for use of discretion by the tax administrators.
The Scrutiny of Bills Committee has raised the issue of retrospectivity in respect of the amendment of section 10 of the principal Act, which allows the commissioner to go back three valuation periods and determine or redetermine unimproved land values in case of clerical error or a change in valuation circumstances. The Scrutiny of Bills Committee is concerned that the retrospective reassessment of rates and land tax, using these new values, may affect proprietors prejudicially in some cases.
Debate interrupted.
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