Page 3770 - Week 12 - Thursday, 21 October 1993
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MADAM SPEAKER: Yes, I was going to put the question: That clause 1 be agreed to. That is the question before us now.
Clause agreed to.
Clauses 2 and 3, by leave, taken together, and agreed to.
Clause 4
MR KAINE (5.16): I move:
Page 2, line 10, proposed new paragraph 4(1)(c), omit "15", substitute "30".
Mrs Carnell has addressed this issue already. Members will recall that we adjourned the debate on this matter because we had only just received a copy of a letter that had gone from the Law Society to the Chief Minister and which I believed at that time she had not seen. I am quite sure that she has seen it now. The fact that the Government has not seen fit to revise or review its Bill means that the Chief Minister presumably has rejected the advice and the opinion of the Law Society on this matter. They made quite clear their view that to impose a 15-year period in terms of defining a lease or a renewal of a lease or an option to a lease which is no longer exempt and which is now subject to this tax is far too short. It is a disincentive to business. In fact, some of the businesses in our big shopping centres are obliged to take on a lease longer than that right from the outset. This would be a clear disincentive to business. It would be an unreasonable imposition of the tax.
It flows from the premise that somehow or other, because they take a 30-year lease, there has been an effective transfer of the lease. That simply is not the case. One could argue, I suppose, if you had a really long-term assignment of the lease in some fashion, that the Government's position could be upheld and substantiated. But this is not the case. This is simply the case where a retailer in a commercial shopping centre takes a lease for a reasonable period that will allow them to amortise the costs of moving in and occupying the premises. There is no effective transfer of the title or the property at all. So the Government's premise is incorrect in that case. Therefore, I have moved that the term of 15 years be deleted and the term of 30 years be inserted. That is on the basis that anything in excess of 30 years that one could contemplate might reasonably be construed in the fashion that the Government is now construing it - that there is an effective transfer of the rights in that case, and that it would be more than would be reasonably acceptable in terms of a lease for business purposes. I think that is a very reasonable proposition, and I adopt the view that has been put forward by the Law Society on this matter.
MS FOLLETT (Chief Minister and Treasurer) (5.20): Madam Speaker, the Government will be opposing Mr Kaine's amendment. The clause that is in the Bill at the moment, Madam Speaker, is in fact an anti-avoidance measure. It has been clear for a while now that long-term leases have been issued as a means of avoiding paying stamp duty. A long-term lease in many respects takes on the attributes of ownership. For example, there is the ability to pass on certain rights of occupancy. I believe that because of that fact duty should be charged on the same basis as conveyances. As I say, Madam Speaker, this is an anti-avoidance measure and I believe that it is equitable that long-term leases should be charged on the same basis as conveyances.
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