With every passing day and week, it seems ever more plausible that the Marshall Government genuinely doesn’t know what it’s doing on land tax.
It’s getting on for three months since the aggregation changes were announced in the State Budget, when Treasurer Rob Lucas declared the $40 million measure was “aimed squarely at closing a loophole that may encourage some land owners to form complex ownership structures designed purely to avoid paying land tax”.
“We don’t think that’s fair and we will be introducing a model that works well interstate in Victoria and New South Wales,” he said in a statement contained in the budget releases at the time.
“We will consult before introducing the new arrangements on July 1, 2020.”
Since then, he’s insisted a draft bill will be released for consultation in late August (it wasn’t) or early September (still possible, but the month isn’t getting any younger).
As of yesterday, there was still confusion between the Treasurer and the Premier about the timeframe for its release, with Steven Marshall insisting the Government was still modelling the impact of its proposed reforms.
I’m no politician, of course, but I’d have thought it would be wise to do economic modelling about a $40 million budget measure before you decide to proceed with it, let alone announce it.
As we know, the changes have prompted much wailing and gnashing of teeth on the Government backbenches, with disgruntled MPs certain to voice their displeasure at the Libs’ ironically-titled ‘love-in’, which is running today and tomorrow in the Barossa.
And of course, the leadership have made it known that they have listened to their MPs’ concerns and are taking them on board, by… um, not including land tax as an agenda item on either day.
And yet frontbencher Tim Whetstone told media early this afternoon that the party “hasn’t yet come a final position on the land tax issue” and “over the next two days we’ll nut out what our position will be”.
Lucas, meanwhile, has maintained a consistent line: as long as he still gets his $40 million budget windfall, he’s willing to canvass broader land tax changes – specifically, reducing the top tax rate from 3.7 per cent to 2.9 per cent, possibly as early as next year. Even though he also concedes 2.9 per cent is still not “nationally competitive”.
And through all of this, the Labor Opposition has enjoyed an armchair ride.
The Government has been slowly imploding, with literally no input from the Opposition whatsoever.
Indeed, if the Opposition were to proactively weigh into the land tax debate – as opposed to occasionally ‘tut-tutting’ from the sidelines – Labor leader Peter Malinauskas would immediately cede the political advantage he currently enjoys.
Namely, the ability to say, ‘We haven’t seen any legislation yet, so we can’t say what we’ll do about it’.
But at some stage, that will change.
And it’s eminently possible that the way Labor decides to tackle the legislation Lucas has promised to bring to parliament could help determine the course of the next election.
After all, parliament appears delicately poised on the debate.
Of the five crossbenchers in the Upper House, the two SA Best MLCs have voiced strong concerns about the proposed changes, while independent John Darley – the state’s former Valuer-General – tells InDaily: “I’d vote against it based on what I know at the moment.”
“The idea might be right, but to change the law overnight – and with the economy the way it is at the moment – is suicidal,” he ominously continued.
On the other hand, perhaps Marshall’s biggest regret at today’s ‘love-in’ is that he won’t have the biggest political supporter of his land tax changes by his side to help win over any conservative dissidents.
Because the Greens are, of course, not allowed into Liberal party-room meetings.
But the effusive enthusiasm for the aggregation changes from Greens senator Sarah Hanson-Young – who last month told ABC radio ‘the policy, in principle is right” – would have been a sobering endorsement for the Premier as he tries to win over sceptical heartland supporters concerned he has dragged the Liberal Party too far to the left.
“There is a loophole that is exploited, and if you’re rich enough to be able to have several properties and use that corporate loophole then you can pay less than the average home owner,” Hanson-Young opined.
When Rob Lucas and Sarah Hanson-Young start to sound like they have the same speechwriter, SA politics has officially jumped the shark.
But if the Greens vote in state parliament is consistent with Hanson-Young’s comments, the decision of the Labor Opposition will have a significant bearing on the fate of the land tax bill.
The Opposition could take a principled stand, consistent with their public statements about the ill-conceived and poorly-executed nature of the Liberal plan, and block the legislation.
That might win it a few short-term plaudits from organisations like the Property Council and the UDIA, but it’s hard to imagine the Liberal faithful who are outraged about the aggregation impost will reward the ALP for helping safeguard their investments when they next cast their vote in more than two years’ time.
In truth, if the Opposition kills off the Bill it would be a small victory over the Government, but it would do the Libs a big favour in the longer-term.
Politically, Labor’s best interests are served by keeping land tax aggregation – and the accompanying Liberal skirmish – on the public agenda for as long as possible.
That could mean attempting to delay the passage of the Bill – ostensibly to await the impact of the concurrent statewide revaluation by the Valuer-General – and revisit it next year, when the 2022 election looms larger in the public consciousness.
Or they could simply pass it – let the Libs wear the opprobrium of those investors who, according to Lucas on budget day, “are not paying their fair share of land tax”, and for whom “there will be very little sympathy in the community”.
Yes, there would be some blowback on Labor – but largely by people who would never have voted for them in the first place.
And, perversely, the Opposition can claim a high moral ground of sorts – the principle that it’s not their role to block budget measures.
In the last parliament, the Liberals stopped the passage of two key Labor revenue raisers – the infamous carpark tax and the even-more-infamous bank tax.
At the time, the then-Government warned that a dangerous precedent had been set – and that money bills under a future Liberal Government could be similarly stonewalled.
But Labor could end up taking a very different tack – and allowing the Liberal legislative agenda to pass in full.
After all, the Libs are having enough trouble with their own friends to need an enemy.
And that way, a future Labor Government would have a Lib-endorsed $40 million a year revenue windfall to add to their budget coffers.
The way things are going, they could be spending it sooner than we would have imagined just three months ago.
Tom Richardson is a senior reporter at InDaily.
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