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Legislative Assembly for the ACT: 2002 Week 10 Hansard (27 August) . . Page.. 2814 ..

MS DUNDAS (continuing):

This government should not expect praise for a budget which effectively maintains the status quo and perpetuates the mistakes of the past. This government will need to do more than just tinker at the edges if it is really serious about shaping Canberra's future and building a legacy of which we can all be proud.

As this is a cognate debate, I now turn to the Revenue Legislation Amendment Bill. I have been informed that the proposed changes to payroll tax arrangements in this bill make it easier for businesses to calculate their payroll tax obligations, and that the changes are not expected to significantly increase the tax rate. The Democrats generally oppose payroll taxes, as they discourage businesses from engaging staff. We prefer progressive income taxes, and taxes on non-labour inputs to businesses. However, because payroll taxes in the ACT affect only the largest of businesses, and because the ACT is already so reliant upon this revenue, I am prepared to support the changes to the current payroll tax scheme.

The ACT has a broader land tax system than most, if not all, other states and territories. This, presumably, acts as a disincentive for potential property investors who are aware of the tax, and may also account for slightly increased rents in Canberra. However, overall it is fair to characterise the ACT land tax as a Robin Hood tax which targets those who are better off. I would be more comfortable with the land tax changes if we could see that the additional revenue was going to assist in the affordable housing area but, unfortunately at this point, we cannot. Nevertheless, I am generally supportive of the ACT government securing a revenue base that enables us to deliver adequate social services.

I am astonished that the government did not capture properties held by companies in trust when the land tax legislation was first introduced. This change closes a loophole which previously existed in the law regarding family trusts. I understand it is usually wealthy families who set up these trusts-generally with the aim of minimising tax. The Democrats have always supported a tax on family trusts. We were incredibly disappointed when, at a federal level, the Howard government reneged on its commitment to tax these trusts.

A few older people currently living in expensive homes which have been put into family trusts may now be forced to sell their houses because they cannot afford the land tax. I have sympathy for these people. However, many more people are forced to sell their homes each year under other laws, and it does not appear that the government intends to change these laws.

Even though we know gambling addictions are common in our community, we allow licensed venues to operate poker machines, and many people lose their family homes due to these machines. We collect a large amount of tax from these gambling addicts.

I also have sympathy for people who own high-value properties who need long-term nursing care and are forced to sell their properties to pay for this vital service.

The fact is that tax revenue must be raised. Taxes always impact directly on people's lives. We do not appear to be considering creating exemptions from all taxes on the grounds of hardship, although perhaps we should. In this light, the compassionate exemption provided by this Revenue Legislation Amendment Bill is broader than most.

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