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Lucas threatens new taxes, budget cuts if land tax reform blocked

Politics

Treasurer Rob Lucas has warned critics of the Marshall Government’s controversial land tax reforms that he will consider additional budget cuts or alternative new taxes if the measure is defeated in parliament next month.

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Lucas squared off with critics at a closed forum this morning, as part of a public consultation before draft legislation goes before parliament.

The meeting at the North Adelaide Football Club was organised by frontbencher and Adelaide MP Rachel Sanderson, to give constituents who had raised concerns the chance to debate them with the Treasurer.

However, the Treasurer did not appear for turning on his proposed reforms, saying without the contentious aggregation changes – which will see land tax levied on the total value of an investor’s holdings – there would be no reduction in the top rate of land tax from 3.7 per cent to 2.4 per cent.

The aggregation changes will raise $86 million in additional revenue for Treasury each year, however the Government has sold the overall package as an overall $70 million reduction in land tax levied over three years.

Despite that, though, Lucas insisted if the Bill did not pass parliament, he would seek alternative ways to make up the aggregation shortfall.

“If the legislation is defeated, the Government will need to look at how it will address the budget issue – whether it be by other revenue measures or other expenditure reductions – as part of its mid-year budget review which comes in December, or next year’s budget,” he told the meeting.

Media were not permitted to attend the public meeting, however several attendees recorded the proceedings, which have been heard by InDaily.

InDaily registered to attend using the official link on the TryBooking app, but the ticket was later voided, with an email from Sanderson’s office saying “we’ve been approached by other journalists also seeking to attend Friday’s meeting, which we’ve politely declined [so] to ensure fairness for all working media, we will be unable to register you to attend the event”.

“Our primary focus is to inform and engage with local constituents about the Government’s land tax reform, which will save South Australians $70 million over three years,” the email continued.

The registration fee of $0 was refunded via the booking app.

Organisers however did allow representatives from interest groups to attend, including the Property Council, the Motor Trade Association and Business SA. Labor frontbencher Tom Koutsantonis also sought to attend, but was not permitted entry.

Before the meeting, one attendee insisting market uncertainty has seen the Adelaide property market “drop off to almost zero”.

Frank Azzollini, the owner of a prominent real estate franchise, told InDaily outside the meeting: “Our investment market has dropped off to almost zero inquiries since the [budget] announcement, let alone when [aggregation] kicks in.”

He said he had received “several emails from clients” who were not proceeding with planned purchases, adding the uncertainty and pessimism surrounding the changes had “almost shut the door to our investment market”.

Azzollini said the Government’s recent compromise measure, which would see the top rate at which land tax is levied brought down from 3.7 to 2.4 per cent, had made “no difference at all” to investor sentiment, despite the Treasurer’s insistence that the change was consistent with the mainland land tax average and the aggregation measures being modelled on policies already in place in the eastern states.

“It doesn’t equate,” Azzollini said.

“We can’t compare to NSW and Victoria – it’s two different markets… they’re international cities – we’re not.”

He said investors would not only pay a lower level of land tax in Sydney or Melbourne, but had better potential for growth.

“Clients I’m dealing with are discussing getting rid of assets rather than accumulating assets in SA, and reinvesting in other states,” he said.

One organiser remarked that there were “no burning effigies, which is a good sign”, although one attendee did make his feelings known by arriving with a truck in tow emblazoned with the slogan “Land tax will break our backs”.

Photo: Tony Lewis/InDaily

“They’re making us sound like criminals,” he said of the Government’s repeated rhetoric about closing the aggregation “loophole”.

He gave his name as “Rod”, but declined to give his last name, citing last week’s attack on land tax complainant and Unley dentist Dr Timothy Goh in a national newspaper.

“After what they did to Tim Goh, I’m just worried,” Rod said.

“We’re all a bit nervous with this Goh thing… we’re just hoping they’ll listen to us, and realise they’re not doing business any favours.”

Business owner Louie Zagotsis was less diplomatic.

“It’s going to destroy the state,” he said.

“It’s unworkable; it’s untenable… it’s an experiment that will go drastically wrong.”

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