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No land tax vote as budget windfall dwindles

Politics

Land tax confusion is set to drag on for several days, with key crossbencher John Darley agreeing to a request from Treasurer Rob Lucas to delay a crucial vote on the contentious legislation as another peace offer looms.

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The Treasurer has flagged that he’s open to a series of compromise measures and wants at least another week to try and sway the Advance SA MLC, whose vote would carry the land tax legislation through the Upper House and into law.

Darley, a former state Valuer-General, has thus far remained resolutely opposed both to the legislation and the way it has been brought in, repeatedly arguing the ongoing confusion has had a devastating effect on the local property market.

As InDaily revealed this week, Lucas has already flagged his openness to a range of measures, including a $10 million fund to compensate investors whose land tax bills are set to skyrocket, a $20 million affordable housing initiative offering grants for people in state housing to purchase their own homes and a possible reduction of the ‘middle tier’ land tax rate from 1.65 per cent to 1.4 per cent.

But Darley has thus far refused to budge on his opposition to the Bill, which suggests Lucas could yet offer a further concession.

He is unlikely to budge on his centrepiece aggregation crackdown, which will reap an extra $84 million a year for Treasury’s coffers.

However, with his previously announced reduction in the top land tax rate from 3.7 to 2.4 per cent from 2020, the total amount of annual revenue reduces to $31 million a year, according to an independent PwC report commissioned by the Government.

A subsequent deal with the state Property Council to increase the maximum threshold at which the top rate is levied will further reduce the budget revenue by $5.7 million in 2020-21, increasing to $8.8m in 2022-23.

If the one-off compensation fund, the low-cost housing incentives and a potential further rate reduction are all factored in, it’s likely the first-year impact of the land tax changes – if they pass – would end up revenue neutral at best, if not a net budget burden.

Darley told InDaily he was happy to delay a second-reading vote on the legislation until the Tuesday of the next sitting week, in 12 days.

Industry sources have suggested Darley has even flagged supporting the Bill on its second reading, before killing it off at a later stage – but the crossbencher denied this.

“I was going to speak today on it [but] I got a call from Lucas this morning saying ‘could you give us another week to talk to you?’” he said.

He said he told the Treasurer “I don’t know there’s anything to talk about” but relented.

“I said, ‘You can have next week.’ … They’ve got [that] and the following weekend to come up with some ideas, but other than that, I’ll make my speech and if nothing changes that will be it,” he said.

Asked whether could be persuaded to change his position and back the Bill, he said: “Only if there’s something outstanding that comes up in the meantime.”

Lucas confirmed that his position had been that “the fate of the Bill will be decided one way or other in the next sitting week”.

“Darley has today agreed with that position,” he said, confirming the vote will go ahead on Tuesday week.

Lucas has consistently refused to comment on compromise offers he has made to Darley.

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