Page 3777 - Week 12 - Thursday, 21 October 1993
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MS FOLLETT (Chief Minister and Treasurer) (5.44): Madam Speaker, I want to address some of the comments that the Law Society has made on this matter as well as those made by Mr Kaine. I am aware that members of the Liberal Party have the Law Society's correspondence on this matter. In fact, they had it well before I did. I think they should be familiar with it. Madam Speaker, the Law Society has contended, and I will quote, that "the vast majority of honest, standard and necessary commercial transactions ... should not be affected by the actions of a few". That is a large part of their reason for opposing this amendment to the Act. Madam Speaker, the statement that the Law Society has made is true of all tax avoidance or evasion measures; that is, the vast majority of citizens are honest and pay their taxes. But, of course, we all have to comply with some requirements that necessarily have been introduced by governments to prevent those dishonest few from avoiding their legitimate tax obligations. This is a fact of life. In that respect the amendment Bill that I am moving here is no different from a great many other taxes, at least in principle.
The list of typical conditions which, if they were not met, should lead to rescission, in the Law Society's submission, I believe needs to be very critically evaluated. The Government's concerns relate to a number of matters: Firstly, the emergence of tax evasion schemes and the loss of revenue. Secondly, the uncertainty of revenue collection if contracts can be rescinded at any time, and they quote two years in some examples. Thirdly, escalating costs of tax administration due to abuse of the rescission provisions, and there were over 100 rescissions and refunds last year. Fourthly, the planning of projects so that significant aspects are unresolved at the time parties are committing themselves to binding contracts; for example, there is no planning approval or no finance. The Law Society is suggesting that our concerns, as a government, in relation to those matters are less important than the convenience of developers and the convenience of speculators, and that the developers and speculators should be able to walk away from any such projects which go wrong. I do not agree.
The suggestion that the Government should continue to condone speculation on Government planning decisions is simply not acceptable to this Government. For example, members will be aware from recent media reports of speculation in respect of a proposed Red Hill development. No government can accept that it is appropriate for its planning decisions to be subject to such speculation. As far as this Government is concerned, should this occur the parties ought to bear the full consequences, including the loss of any stamp duty paid, because they are bearing the consequences of their gamble if approval is not forthcoming. Speculation is a risky business. Why should a government move to make it safe for them?
It must also be remembered that these proposed amendments do not take away the right to a refund of stamp duty; nor do they affect any investor's right to enter into a conditional contract. I urge you to pay very careful attention to conditional contracts. Taxpayers involved in commercial transactions will still be able to claim for a refund up to 30 days after the documents have been assessed for duty.
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