STATE TAXATION ACTS FURTHER AMENDMENT BILL 2011

Mr SOUTHWICK (Caulfield) -- It gives me great pleasure to rise in support of the State Taxation Acts Further Amendment Bill 2011. This bill tidies up a number of acts: namely, the Payroll Tax Act 2007, Duties Act 2000, Land Tax Act 2005, Taxation Administration Act 1997, Livestock Disease Control Act 1994 and the Valuation of Land Act 1960. In amongst this the bill's purpose is to amend the Duties Act 2000 to reduce the period of time available for the payment of duty after liability arises from a 90-day period to 30 days and to clarify the starting point for calculating the pensioner exemptions and concessions from duties for properties purchased off the plan.

The bill will amend the Land Tax Act 2005 in relation to time-sharing schemes where the time sharers are registered proprietors so that the manager of the scheme is assessed for land tax and the time sharers owe a debt for their share of the tax, and to change the ownership requirements to increase consistency and improve the operation of the primary production exemption. It will also make other amendments.

The bill will amend the Taxation Administration Act 1997 to empower the commissioner of state revenue to impose interest and penalty tax in relation to livestock duty and to apply the administration and enforcement provisions to the collection of livestock duty, and to clarify the objection processes in relation to the valuation of land under that act. The Livestock Disease Control Act 1994 will be amended to allow the secretary to disclose certain information to the commissioner of state revenue in relation to the administration of livestock duty and to ensure any interest and penalty tax collected by the commissioner of state revenue in relation to livestock duty is paid into the appropriate compensation funds.

I would like to spend a bit of time looking at the crux of this bill, which is the proposal to reduce the time period for paying duty from 90 days to 30 days for contracts settled on or after 1 April 2012.

We have heard from the member for Lyndhurst that the opposition will not be opposing the bill, but in his contribution he mentioned that the coalition has had a change of heart since being elected to government. It is true that the coalition parties while in opposition opposed a bill which proposed a reduction in the time period from 90 days to 14 days. We vehemently opposed that bill with good reason, and we would do so again.

I would like to give the member for Lyndhurst a lesson in standard business practice. It is standard commercial practice to apply a 30-day period to payments -- not 14 days, not 7 days, not 60 or 90 days -- and the government's proposal is in line with this practice. It would be a burden for landowners if the time period were 14 days; it would also be a burden for lawyers and banks to prepare the necessary documentation in that time period. Thirty days is both a convenient and appropriate time period.

I will elaborate on this point, because it is important for us to understand what the net effect of this measure will be. Firstly, we will see $47 million brought forward into the 2011-12 budget as a pure timing issue. I am sure all members, including members of the opposition, would agree that that money could be used to provide the very important services the government will continue to provide for the state. The other element is that currently 85 per cent of duty is paid within 30 days, so there will be no change for those who pay in this time period. They will continue to make their payments as they currently do. However, the 15 per cent of people who make their payments after 30 days will now have to make payment within 30 days.

What does that mean? Will it be an issue for a consumer who potentially does not have the money in their pocket because they have handed it over to the government? The answer is no.

What currently happens is that money, which is usually held in trust earning interest not for the individual and not for the government but quite often for lawyers, will be transferred to the government. The interest alone on that money will allow us to provide very important services to the state of Victoria.

This is an important and sensible change, and one which will return dollars to the government coffers. I commend the Treasurer for taking an active step in ensuring that state taxation laws and state taxation collections are brought into line with those of other states and territories, with the exception of the Northern Territory.

The bill also seeks to provide certainty to taxpayers and provide for the better operation of Victoria's tax system. I would like to make a point here about the non-profit exemption from payroll tax, which is also being amended in this bill.

This amendment is intended to address the unintended impact of the High Court decision in the matter of the Commissioner of Taxation v. Word Investments Ltd. In that case the High Court expanded the common-law definition of 'charitable organisation' to include organisations that conduct predominantly commercial activities to fund their charitable objects or donate their profits to another charity.

What the government is doing with this amendment is sensible business practice. It is creating a level playing field for businesses and non-profit organisations. The non-profit organisations I am referring to are large organisations which run very big commercial operations. The government wants to make sure that they are not unfairly advantaged in comparison with businesses that would like to compete in the same commercial markets. This is very important in the current economic climate.

The Payroll Tax Act 2007 provides an exemption for wages paid in respect of maternity and adoption leave for a maximum of 14 weeks. For the avoidance of doubt, the relevant provision provides that the 14-week period can be applied on a pro rata basis for full-time employees who take more than 14 weeks leave at a reduced rate of pay, but it does not provide the same level of clarification in respect of wages paid to part-time employees. This amendment will clarify that the payroll tax exemption can be applied on a pro rata basis in the case of part-time employees. The State Revenue Office currently allows employers to claim the exemption in respect of part time-employees on a pro rata basis. Therefore this amendment will bring the legislation into line with current administrative practice and will not impact on Victorian employers.

The last comment I want to make is that there will be no change to the way livestock owners and approved agents currently pay duty. The amendments are intended to clarify that the State Revenue Office can, under the Taxation Administration Act 1997, impose interest and penalty tax in respect of late or non-payment of livestock duty, just as it presently can where there is a default in the payment of other types of duty.

This is a good bill; this is a sound bill. It addresses some of the key elements of tidying things up, bring things into line, ensuring that we are sensible and responsible. Most importantly, the bill will ensure that the government is able to access these funds earlier and put them into important and much-needed services for the people of the Victoria. The bill has been well worked through, and I commend the Treasurer again on a terrific bill and a great contribution. I commend the bill to the house.