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'Madness' to block land tax Bill, Labor insiders warn

Politics

Labor leader Peter Malinauskas will be at odds with several of his colleagues if he seeks to block or amend the Marshall Government’s controversial land tax legislation, with MPs across the party in favour of backing the Bill.

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The Opposition Leader has drawn out his decision-making on the proposed laws – which toughen up existing aggregation provisions while reducing the top tax rate from 3.7 to 2.4 per cent – opting first to hold a series of public forums to “hear from the people directly affected”.

“We won’t vote for legislation if we genuinely take the view it’s going to be bad for people and small businesses,” he said in September.

Labor’s final forum will be held on November 3, but with the legislation set to be debated in parliament next week, the pressure is on the party to formalise its position.

While Malinauskas has placed himself publicly in the same corner as those adversely affected by the aggregation changes, several sources within the party argue the Bill should not be blocked.

It’s understood several Left faction members are firmly in favour of passing it, although they oppose in principle the retrospective nature of the legislation.

Some insiders have proposed introducing an amendment to ‘grandfather’ the aggregation changes, so that they do not apply to existing property portfolios.

However, Treasurer Rob Lucas has made it clear he will walk away from the Bill altogether rather than compromise its centrepiece revenue-raiser, with the aggregation crackdown set to reap an extra $86 million a year.

We would be absolutely insane not to pass it

“My view is it ought to be supported, but with some quarantine or cap to protect ‘mum and dad’ investors,” said one Left-faction source.

However, they added, “if amendments put forward by Labor provide a parachute to have the whole thing abandoned – when there’s been this loophole for people with substantial wealth not to pay a fair contribution – that would be a poor outcome”.

The source said there had been “substantial tax avoidance” by owners of multiple properties and that “people should pay their taxes”.

“I do think Labor should be supporting tax reforms that look to fix anomalies that benefit the privileged,” they said.

However, there is also a strong view within the Right faction that the party should not risk the legislation not passing by trying to water it down.

“We would be absolutely insane not to pass it,” said one insider, arguing there was a fundamental “matter of principle” that Labor did not block budget measures.

“It would be hypocritical… how many times did we whinge when they meddled with our budget measures?” they pointed out.

Moreover, “the politics of letting them do this do themselves is impeccable”.

“If the Labor Party is foolish enough to try and fiddle with this to give [the Liberals] an excuse to abandon it, we would have succeeded in letting them off the hook,” they said.

“We will get zero out of that… and the Government is surely thinking the same thing – they can’t wait for Labor to give them the option to shelve it.”

Another MP said the debate was “fraught” given Labor has a longheld position not to block budget measures, saying “some of us do remember 1975” – a reference to the downfall of the federal Whitlam government after the Liberals blocked the budget appropriation bills.

Two people contacted by InDaily referenced a quote originally attributed to Napoleon Bonaparte: “Never interrupt your enemy when he is making a mistake.”

One questioned the strategy of holding public forums, which have now aligned the Opposition with the land tax reforms’ most vocal critics.

“There’s a range of opinions within the party,” another insider noted, adding that there was a strong view that “we need to think about grandfathering”.

“For us, really it’s a political problem – we can either get in bed with these hordes of people who are adversely affected, but the other side of it, should we just let the Libs stew in their own mess?” they said.

“Should we be going to the rescue and saving them from their own problems? How much do we want to own it [and] are we going to get any political capital out of that? I’m not sure we will get any.”

However, the same source believed there was a moral imperative to protect those affected by potentially huge land tax increases and was still open to opposing the legislation altogether.

Another insider concurred, saying they would give careful consideration to the impact on residents.

“The anger about this from residents who are very open with me about the fact that they’re traditional Liberal supporters has been pretty palpable,” they said.

But one right-winger told InDaily “I don’t think it’s a good policy for us to go against”, insisting most of the measure’s most vocal opponents “are not going to vote for us” and “if we’re going to get into government we want revenue”.

“I know the Left support the idea ideologically, it’s in their DNA in terms of equity [so] they wouldn’t be against the current policy,” they said.

Malinauskas today told InDaily the party was not divided on the legislation but would “make our deliberations in the next week or so”.

Asked whether the Opposition’s public forums were a tactical mistake, he said: “Absolutely not.”

“I don’t ever believe that going out and talking to people and understanding the implications of legislation is a bad idea,” he said.

“I’ve always been of the view that engaging and fronting up is critical.”

He acknowledged there was “undoubtedly a hard-headed political argument about why Labor should support the Bill”.

“That argument exists, but there are plenty of other arguments too about why we should vote against the Bill or for the Bill.”

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