Page 4618 - Week 15 - Wednesday, 15 December 1993
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"You have a 20-year lease with a 10-year option. You will pay the tax as though you had a 30-year lease". At the end of the 20 years the businessman may not proceed with the option, but under this law he has no right whatsoever to get any of his money back. That is not tax avoidance; it is a backhanded way for the Government to collect revenue they are not entitled to. I think the Chief Minister needs to take that issue under advisement as well.
All I can do, apart from dealing with the two particular proposals that I put forward today, is ask the Chief Minister to do some of that consultation that she always talks about, to have a look at the matters that are being put to her by the people who are directly affected by this legislation and see whether there is not some validity to it. If she does that honestly, I am sure that she will conclude that her legislation is punitive. It goes much beyond the question of dealing with tax avoidance. There are other issues that need to be rectified and I put her on notice that, if she does not move to rectify some of these other matters, then, in the new year, I will.
Question resolved in the affirmative.
Bill agreed to in principle.
Detail Stage
Clauses 1 to 3, by leave, taken together, and agreed to.
Clause 4
MS FOLLETT (Chief Minister and Treasurer) (11.50): Madam Speaker, I move:
Page 1, omit "'30 years'", substitute "'25 years'".
I listened very carefully to what Mr Kaine said about the leasing period that is covered by the action that is contemplated here and I did not hear him put forward any reason whatsoever for his intention to change the period from 25 years to 30 years. I have said before that the industry organisations that I have been in touch with have expressed the view that 25 years suits them. It also is the case, Madam Speaker, that that 25-year period is based on an analysis of leases which have been lodged for assessment, so we are talking about the real situation here. There are no leases between 25 and 30 years. I think that is fairly significant. Therefore the 25-year limit, which was my proposal, and which is now the subject of my amendment, will not affect any normal commercial leases. Mr Kaine is dealing with a hypothetical situation. If you were to look at what has actually occurred you would see that the 25-year period is satisfactory.
However, Madam Speaker, this is an anti-avoidance measure and, as many members have commented, including myself, a line has to be drawn somewhere, and there is always a certain arbitrary quality when you are drawing that kind of a line. No doubt leases will now occur just within the period that the Assembly sets, whatever that period might be. I have no doubt that that will be the case. Therefore, I would submit, Madam Speaker, that the period should be as short as we can possibly make it without affecting normal commercial leases. I would submit that the 25-year period is the one that is being worked upon at the moment. To make a change at this stage will cause confusion, and I am quite sure that we will see future leases being written up to that 30-year period.
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