The Hon. Rob Lucas MLC

The Hon

Rob Lucas MLC



History of the Budget Measures Bill

Tuesday, 31 October 2017

The Hon. R.I. LUCAS (11:14): I rise to continue my contribution on the Budget Measures Bill. At the outset, can I just indicate to the government and its advisers that when we last spoke, as has been my custom and practice, I placed on the record some advice from one of South Australia's leading tax lawyers in relation to a number of significant questions about provisions of the Budget Measures Bill not just relating to the bank tax but also the foreign investors tax, stamp duties clauses and others.

Given the government's keenness to progress debate through the committee stage on the Budget Measures Bill, can I indicate that if the government is in a position at some stage to provide a copy of RevenueSA or the government's response to those particular issues, which will be, I understand, read onto the Hansard record at the minister's reply to the second reading, if that could be provided to me prior to then that would help expedite discussion. It may well be, if the government chooses not to pursue any of the suggested amendments to clauses in the legislation, the opposition may well seek to table amendments to reinforce some of the issues the tax lawyer has raised in relation to possible deficiencies in the drafting of the government's Budget Measures Bill. I indicate that at the outset.

In terms of talking about the context of this bill, I think it is important for the public record to indicate exactly what is being debated here and what has occurred in relation to appropriation and budget measures, in no small part due to the, in my view, untrue claims from the Treasurer and the Premier, which I will refer to in some detail later in my contribution. There is considerable confusion, certainly in the media and I suspect, therefore, in parts of the community, as to exactly what is being discussed and what has occurred.

The first point to make is that the Appropriation Bill, which is the major budget bill, to use a colloquial expression, has been passed by the Legislative Council and the House of Assembly. The Appropriation Bill is the bill which authorises the expenditure of up to $18 billion. It authorises the payment of public servants. It authorises the delivery of government services. It is the parliament's approval for the budget of the day in terms of spending commitments.

So, for the period from now until 30 June, this government and either a re-elected government or a new government has supply, has appropriation, has a budget to enable the ongoing functioning of government between now and 30 June. Unlike the debates, for example, in the United States legislature where governments occasionally run out of money because of Congress holding up budget related measures, that is not what is being discussed, debated or is occurring in South Australia.

The debate in South Australia is simply that the attached Budget Measures Bill, which seeks to incorporate some of the revenue and tax concession measures which are related to the budget, is being considered by the Legislative Council. The Liberal Party's position, and the position of some other members in this chamber, is that there is one element to that particular Budget Measures Bill which we will be voting against. The mechanism that we use, according to our standing orders, is that we will make a suggested amendment to that and, if the majority of the members in this chamber vote against the state bank tax measure, then that suggested amendment will pass and it will be sent to the House of Assembly.

It is important to note that, contrary to some claims in the media—again, I think being fed by misinformation from government ministers and spin doctors—there is not the issue of voting down the Budget Measures Bill today or defeating the Budget Measures Bill today, or whatever it might be, that is not going to be the set of circumstances which will occur, whether it be today or later in the week or some not-too-distant future time when ultimately the third reading is considered.

It is the Liberal Party's position that we will be supporting an amended Budget Measures Bill. That means that the bill will pass the Legislative Council, if our position prevails, albeit with the bank tax having been voted against by way of a suggested amendment. I think it is important for that context to be understood, because, as I said, people are misunderstanding and misinterpreting what is going to occur at some not-too-distant time in the future in relation to this Budget Measures Bill.

The context of the Budget Measures Bill and the state bank tax, which has attracted so much controversy, is the view that the Liberal Party has, and certainly other members and a number of community observers have, that the Weatherill government is simply a tax-happy government. It takes the view that the answer to any question is to whack on a new tax or to increase a tax in the South Australian economy. Its record is stark for everyone to see.

In this particular bill, it is seeking to incorporate a new state bank tax and a new foreign investors tax. In a recent budget, it included a new wagering tax. It sought to include a car park tax about three or four budgets ago. There was a massive increase in the ESL tax, or ESL bills, in South Australia, which slugged struggling South Australian families and small businesses in South Australia. The Weatherill government's position, the Treasurer's position and the Premier's position has also been, on the national stage, to argue for increased GST, to impact on all Australians, but clearly to impact on South Australian families and businesses.

In the alternative, the Weatherill government has supported increasing the scope of the GST, for example, to include financial services. If that was to occur, it would mean, for example, that for every transaction through a bank or financial institution, the Weatherill government would be seeking to impose GST, which would see a massive increase in costs being imposed on struggling SA families and costs imposed on South Australian and Australian businesses as well.

As I said, the context of this debate today and the context of the controversy is, in our view, a wrongheaded approach from this government over a long period of time, that the solution to South Australian problems is to tax more, to tax more frequently and to tax more highly, and if anything moves, to whack a tax on it.

The reason why this is a wrong approach can be starkly demonstrated by just looking at the facts after almost 16 years of the Labor government. We have had, over a number of years, either the highest or one of the highest unemployment rates in the nation. We have had low jobs growth figures. Even the Treasurer's own experts within Treasury for each of the last three supposed jobs budgets has looked at what is included and has decided that the estimated jobs growth, according to Treasury in South Australia after these three supposed jobs budgets, will be lower jobs growth than the jobs growth nationally.

Whilst we are seeing increased jobs growth, significant jobs growth at the national level because of national economic decisions that are being taken, South Australia is an anchor on those national jobs growth figures because of the decisions taken by a Labor government over a long period of time in relation to tax and spending promises.

The facts continue with low economic growth figures. Again, the respected economic forecasters Deloittes reported only today that for the last financial year, 2016-17, in its estimation, the increase in economic growth, the GSP growth figure for South Australia, will be 0.7 per cent, less than 1 per cent. Deloittes has estimated the national growth figure at 2 per cent, almost three times the economic growth figure for South Australia.

That is the end result of 16 years of wrongheaded, misguided Labor government policies, which have increased the cost of living for families and businesses and have also increased the cost of doing business, in particular for small and medium-sized businesses in South Australia.

As Steven Marshall has outlined on behalf of the Liberal Party, if elected in March of next year the sort of policy direction he believes and we believe the state needs to take is that we have to recognise the incompetence and the negligence of the Labor government's performance over the last 16 years, but we need to head in a new direction. The simple reality is that, if we want to see jobs growth and economic growth in South Australia, we actually have to recognise the fact that the cost of doing business for small and medium-sized businesses in South Australia needs to be not only nationally competitive, increasingly it has to be internationally competitive.

Unless we recognise that—and as the Liberal leader has acknowledged on many occasions, in recognising that we need to recognise the importance for a small economy like ours of the lack of export growth figures that we have seen in recent years under a Labor government—and unless we are prepared to address that we will never address the issue of low jobs growth, low economic growth and low population growth in South Australia.

The brutal reality, after 16 long years of Labor, is that, if you need proof positive that high taxes are not working, look at where we are placed as an economy at the moment. There is need for a change; it is time for a change, and the new taxes, such as the state bank tax, proposed to be imposed in this bill do not solve the problem, but in essence will add to the problem.

I was interested to note that the Premier and the Treasurer have been waxing lyrical in recent days claiming that, because Elon Musk is building a big battery in the north and a number of other people are investing in the state, that the investment, the jobs growth, the economic growth problems of the state have been solved in some way by this state government.

Again, the statement issued by a major international financial investor group from Europe this morning indicates just how wrongheaded is that approach from the government. The statement highlighted in the morning national media—The Australian, The Advertiser and other media in South Australia—in relation to the position of Jupiter Fund Management, a fund management group that manages over $80 billion in assets to invest, has indicated, and let me quote what they have said:

"'For a single state government, in this case South Australia, to implement extra taxes on Australian banks is highly irregular,' Mr Pidcock said. 'As a UK-based investor into Australia, we see this kind of political manoeuvring as very off-putting.'"

Sadly, from Australia's viewpoint and South Australia's viewpoint, it is not just talking the talk there in terms of their investment decisions: they have actually walked the walk. Sadly, they have indicated that their Asian income fund, which has almost $1 billion in assets to invest, up until recently had 33 per cent of that invested in Australia, but they had made a wealth management decision, an investor fund decision, to cut that 33 per cent to 25 per cent to reduce exposure to financial services companies and to reduce exposure to Australia generally.

To be fair, they highlighted problems at the national level, I assume specifically directed at the bank tax being imposed at the federal level, as well. Their specific comments were directed for a single state government, in this case South Australia and its position, which has added to the lack of investment attractiveness in South Australia by seeking to impose this investment killing, job growth killing, economic growth killing state bank tax as part of their misguided view as to the solutions to the economic problems the states confront.

We have also seen in recent months since the announcement of the state bank tax in the budget of June this year, growing and surging opposition to the notion of a state bank tax. It is clear from government spin doctors and some government caucus MPs who have been speaking freely over the last weeks in and around the corridors of Parliament House that, as this was portrayed to them at the time of the budget by Treasurer Koutsantonis, this was going to be a massive vote winner for the Labor Party and the Labor government by imposing a bank tax in South Australia.

The position Treasurer Koutsantonis put to the caucus—and I am delighted to see Mr Ngo and Ms Gago as members of that caucus here at the moment—was that this was going to be an enormously clever and popular move by the Labor government in South Australia. The position being put by the Treasurer to Labor MPs and spin doctors was, 'How clever were we (that is, the Labor Party) to impose this tax? Everyone hates the banks and there will be massive approval in the heartland of the marginal seats of Adelaide in particular for this massive new tax on the banks in South Australia.'

That was the position put to Labor caucus members in June of this year to support and justify the position of the state bank tax. What we have seen since then is a series of market research studies released publicly, commissioned by the Australian Bankers' Association but conducted by the reputable market research company Galaxy nationally. I am intrigued that whenever each unfavourable result for the government is published the Treasurer and other government members, in my view, probably defame the professional reputation of Galaxy by inferring that in some way these results have been manufactured because they were commissioned by an interested stakeholder in relation to all of this.

Certainly, if I was the managing director or CEO of Galaxy, I would have taken issue with a number of the statements that the Treasurer and others have made publicly in relation to the professionalism of Galaxy as a polling and market research company, and the inference being made by the government that in some way these numbers were being doctored to suit the views of the commissioning stakeholder.

What that market research has shown is that right from the word go there was strong opposition to the notion of a state bank tax in South Australia, and that that has grown over the period of the last three months since the first research was published in the first week of July. In the first week of July, that research was published, and I am not exactly sure when it was conducted but I imagine either late June or early July.

It showed opposition to the tax at 47 per cent and support at 38 per cent and, in the subsequent two months, because I think the last result I saw was at the end of September some time, published in The Advertiser, it indicated that the opposition to that tax had grown by a clear 5 percentage points, now up to a simple majority of 52 per cent, and support for the tax, the government's position, was languishing at 38 per cent.

So, there has been, and there continues to be, strong opposition. Any political party that was able to garner 52 per cent of the vote, and the opposition 38 per cent of the vote, would have a landslide in terms of electoral support.

The clear and unmistakable view of the majority of South Australians is that they do not agree with the position the Labor government is putting. They have the view that, if there is a tax there, they are going to end up having to pay for it in one way or another. I think, frankly, the only people in South Australia who believe that South Australian businesses or individuals or families will not end up paying some of this state bank tax are probably Treasurer Koutsantonis and Premier Weatherill.

I do not think even Labor caucus members believe that anymore because they are getting the message loud and clear from their constituents that they are fearful that if the state bank tax of over $100 million a year is imposed, they will be the ones having to pay increased costs as a result. When we get into the committee stage of the debate, we will explore in much greater detail the Treasurer's claim that this is in some way going to be prevented by a simple clause in the drafting of the bill, but certainly no-one believes that the clause the Treasurer and the Premier have put in this bill will prevent South Australians ultimately in one way or another having to pay the cost of the state bank tax.

I also note the advice that the Under Treasurer has given the Legislative Council Budget and Finance Committee in relation to the Treasurer's own estimates and the government's own estimates of the revenue collections from the state bank tax. This just goes to show how financially incompetent and negligent the government were in terms of their haste to impose a state bank tax. Even before the bill was considered by the Legislative Council, when we put the questions to the Under Treasurer, he conceded that the budgeted revenue collections in the budget in June were a massive underestimate of the actual collections from the state bank tax, if it were to be passed.

Forty-seven million, to be precise, over the forward estimates is their latest underestimate of the total collections. It will factor up now from just under $100 million a year. Ultimately, in 2020-21, they are estimating that it is going to collect $112 million a year, which is actually in that year alone $17 million higher than the budget estimate of June of this year. In the space of less than three months, how could you get it so wrong? The simple answer is that you put someone like Treasurer Koutsantonis in charge of your Treasury and you rely on him to sell your message to the community.

Liberal members know that the last person in the world you would want to be selling your economic responsibility or financial responsibility message is Treasurer Koutsantonis. Labor members told me, and I have put this on the record before, that the Labor Party research in 2014 prior to the election, which mirrored the Liberal Party's research, was that the politician in South Australia, Labor or Liberal, with the highest net unfavourability rating in South Australia was Treasurer Koutsantonis. The Labor research confirmed what the Liberal research showed: the politician with the highest net unfavourability rating of any politician in South Australia was—and will continue to be, I am sure—Treasurer Koutsantonis.

Certainly from our viewpoint, the longer and more frequently Treasurer Koutsantonis is out there prosecuting the case for the state bank tax—or frankly anything—the better it is in terms of the Liberal Party prosecuting its case for whatever the issue is. How could the Treasurer, in the space of two to three months, get his own budget estimates in relation to the collections of the state bank tax so wrong?

Frankly, how are we to believe the latest estimate of the numbers? Should this measure pass the Legislative Council I would not put it beyond the Treasurer, if the state bank tax was to survive, that when the Mid-Year Budget Review comes out in December this year, magically the number will increase even further because there will be some new estimate from the Treasurer and his advisers in relation to the collections from the state bank tax.

Through this recent debate, since June of this year, the Treasurer, as has been the case in many other areas, has made many, many silly and untrue statements in relation to the state bank tax and in relation to the powers of the Legislative Council on budget measures and money bills. Frankly, asking Treasurer Koutsantonis for advice on complicated issues like the constitution, money bills and the powers of the Legislative Council is somewhat akin to asking Kim Kardashian for advice on quantum physics.

It is quite simply demonstrable, as I will now show, that most of the claims that the Treasurer has made in relation to the Budget Measures Bill and the state bank tax are untrue. Either the Treasurer is suffering from a defective memory or he has deliberately chosen to make untrue statements because they do not suit the nature of the argument that he is trying to prosecute.

Let me now refer to just a few of those that the Treasurer has made. In the initial interviews back in July this year on ABC radio and FIVEaa, the Treasurer made a number of statements as follows, referring to the move by the Liberal Party to vote against the bank tax:

"…this is an unprecedented move by the Liberals…our State has got a convention that budgets are not blocked...since 1857 since we had representative government in this State no opposition no legislative council has ever blocked our Budget Measures Bill…"

Further on he states:

"Mr Marshall is not just voting and blocking the bank tax he’s also voting against payroll tax cuts for small business, he’s also voting against land tax exemption for people buying apartments off the plan, he’s also voting against foreign investment surcharge to protect South Australians while they’re out there trying to buy a house…"

Further on in this interview—this particular one is on FIVEaa—he said:

"‘Since 1857, every South Australian government has had its budget measures passed.’"

As I will demonstrate in a detailed response to those claims, they are just palpably false, palpably untrue and, as I said, either the Treasurer suffers from a defective memory or he is deliberately ignoring the facts because they do not suit his case.

In a letter that he sent on the weekend and then provided to members of the media on the weekend, he said, ‘It is of great concern therefore that some members have indicated that they intend to block the entire Budget Measures Bill because of the major bank levy.’

Then on page 2 of the letter he states:

"For perspective, a Budget Bill has never been blocked in South Australia. Blocking a Budget Bill will have severe long-term consequences for stable governance in this state going forward…

If the Bill is not passed as is, the Legislative Council will break the long held convention, setting a new precedent that allows interference in the mandates of the elected Government to set and deliver a Budget that provides a stable fiscal outlook for investors and businesses."

There are many other claims like that but I do not need to put them all on the record.

However, the clear inference from those public statements and letters to members is that the Legislative Council will break a long-held convention in relation to amending a Budget Measures Bill, a claim that in the long history since 1857 the budget bill has never been blocked in South Australia, and also inferring, in fact, that the Liberals and other Independent members and minor party members are, in fact, intending to vote against the entire Budget Measures Bill rather than, as I outlined before, just indicating that we are going to vote to amend the Budget Measures Bill.

To summarise, the untrue statements from the Treasurer that this has not happened since 1857, that the Legislative Council cannot amend but can only suggest—and in particular, in relation to that, I look at a series of tweets the Treasurer issued on 1 July when he said that money bills cannot be amended by the Legislative Council, that the Constitution Act prohibits it, that the Legislative Council can only make suggestions to the House of Assembly or block—I refer the Treasurer to the suggested amendments in relation to the car park tax. They ultimately passed through this house, the government accepted those amendments in the House of Assembly, and the budget measures bill of that particular year did not include a car park tax. If one ever needed confirmation of the power of the Legislative Council to suggest an amendment and, through that mechanism, enforce a position on the government of the day, then the car park tax is the perfect example.

I want to address some of those untrue statements made by the Treasurer and, in particular, look at the history of the Legislative Council over the last 20 years. Later on I will refer to just a couple of examples from a much earlier time in relation to some of the untrue statements of the Treasurer. The first point I make is the arrant hypocrisy of the Treasurer, the Premier and the Labor government in relation to this issue.

On a number of occasions—which I will now outline—the Labor Party themselves actually moved amendments to budget measures bills in the Legislative Council. So it is hypocrisy to claim that the Liberal Party and others moving an amendment to the Budget Measures Bill is unprecedented; the Labor Party in this chamber, in government and in opposition, have actually stood up in this chamber and moved amendments to budget measures bills and money bills contrary to the claims the Treasurer has been publicly prosecuting.

As recently as 2016 (last year), 2015, 2010, 2003 and then an earlier example in 1996, Labor members in government and opposition have actually moved amendments in this chamber to budget measures bills. Last year on the Statutes Amendment (Budget 2016) Bill, the equivalent of the Budget Measures Bill, the Hon. Kyam Maher, on behalf of the Labor government, stood in this chamber and moved suggested amendments to the budget bill. They related to the imposition of a new taxi levy in South Australia, which was controversial and which was being opposed by some members but also by a number of groups in the community.

As a result of that, and as a result of questioning in this chamber during debate, the Labor Party in this chamber moved suggested amendments to the budget measures bill which went to the House of Assembly and were supported by the government of the day. There were also suggested amendments moved by the Hon. Mr Brokenshire on the same issue in the budget measures bill which, again, were passed by the Legislative Council and ultimately accepted by the House of Assembly. So, just 12 months ago, what the Treasurer and others have claimed as unprecedented—as never having occurred since 1857—actually occurred in this chamber. The Leader of the Government, the Hon. Kyam Maher, actually moved suggested amendments to the budget measures bill in this chamber.

In 2015, the equivalent budget measures bill, introduced at the time of the Appropriation Bill, also incorporated amendments moved in this chamber by the Labor government. There was significant opposition to a new royalty measure on extractive minerals being imposed in South Australia. There was significant opposition from some local governments, some small businesses and a range of other people, and in the Legislative Council the Liberal Party raised a significant number of questions during the committee stage. Amendments to the budget measures bill were moved by the Labor Party in the Legislative Council, which then went to the House of Assembly. That was just two years ago, in 2015.

In 2010, there were amendments moved by the Labor Party in this chamber to the equivalent budget measures bill, which was the Statutes Amendment (Budget 2010) Bill.

Again, after questions were raised by Liberal members in relation to a provision in the bill—admittedly, this particular provision did not relate to a tax measure, but it was nevertheless incorporated by the government in the budget measures bill—the Legislative Council passed Labor-initiated amendments to their own budget measures bill in the Legislative Council. There was also an amendment from the Hon. Mr Darley in relation to registration stickers, which, again, the Legislative Council passed as an amendment to the budget measures bill in 2010.

In 2003, one of the budget bills that was introduced at the time of the budget was what the government euphemistically called the 'Save the River Murray Levy amendment bill'. It was actually the Waterworks (Save the River Murray Levy) Amendment Bill. Again, the Labor Party in the Legislative Council moved suggested amendments (because they had to be suggested amendments) to the Save the River Murray Levy bill and passed amendments to that budget-related bill in 2003. Similarly, there was an amendment moved by the Liberal Party in 2003 to that budget-related bill and that amendment was also passed by the Legislative Council in 2003.

The most stunning example of all in relation to the Labor Party hypocrisy—equally as stunning as the 2016 example—is when the Labor Party was in opposition to the then Liberal government in 1996. There were two money bills introduced in 1996. One of them was the Gaming Machines (Miscellaneous) Amendment Bill. This involved significantly increasing taxation levels on gaming machine operators in South Australia. The Labor Party indicated that they were not prepared to support it unless the bill allocated more money to, in their view, worthy causes. Those worthy causes were the sport and recreation fund, the Charitable and Social Welfare Fund and a community welfare fund.

The Labor Party, in opposition, actually moved suggested amendments on a money bill in 1996—because, again, as with the bank tax, the Constitution Act says that the Legislative Council can move suggested amendments. The Labor Party, recognising that power, utilised that power and moved suggested amendments in 1996, which ultimately forced the Liberal government to allocate more funding to sport and recreation and charitable and social welfare purposes.

Some millions of dollars were increased into those particular funds, which ultimately had to be agreed to by the Liberal government if they wanted to see the gaming machine increase in taxation bill go through. As I said, ultimately those suggested amendments from the Labor Party in opposition were accepted. They are only the Labor Party initiated amendments. I will not go through all of them, but there are a significant number of other examples where the Legislative Council has moved amendments to budget measures bills.

The 2014 car park tax is a perfect example of a suggested amendment, but there were other examples in 2011 and 2012, which were all in budget measures bills, which related to a biosecurity levy being sought to be imposed, a series of examples in relation to an attempt by the government to recoup police and court costs with a different mechanism in a budget related measures bill, which were defeated on a number of occasions, or amendments were moved to those particular provisions in the budget related bills on those particular occasions.

That is just a recent history over the last 20 years of examples where the Legislative Council has recognised its constitutional right as a house with equal authority to the House of Assembly. The only finessing is that, in relation to a money bill or a money clause, the Legislative Council indicates its view through the mechanism of a suggested amendment. That is, we move a suggested amendment, but as the government knows, or should know, it has all the force and impact of an amendment. That is, the bill only passes through this house having these particular suggested amendments.

Not only has the Liberal Party and Independents utilised that recognised constitutional power, but demonstrating the arrant hypocrisy of the Treasurer on this issue, the Treasurer's own party, both in government and in opposition, has recognised that power and has moved amendments to budget bills, budget related bills and to bills with money clauses in the Legislative Council, recognising that power. Yet, we have had this appalling public posturing from the Treasurer that in some way what has been canvassed on this occasion in relation to this state bank tax is unprecedented, has never occurred since 1857 and every convention in the view of the Labor government has been turfed out the window by the Liberal Party and other Independents or minor parties that might have a similar view.

I acknowledge that there has been a convention that on many occasions oppositions, both Labor and Liberal, have indicated on those particular occasions they have adhered to the most common convention of allowing passage of provisions in budget bills with which they might not have agreed. The Labor Party, to be fair to them, has indicated that on some occasions. I recall former treasurer Foley and the former leader of the government in this house, the Hon. Mr Holloway, indicating that and certainly the Liberal Party in opposition has expressed that view on occasions.

However, there have been occasions where the Legislative Council has said, 'Enough is enough,' and we have indicated that, consistent with past practice, which I have just highlighted, when the Legislative Council takes that view, it has a constitutional right, it has asserted that constitutional right in the past and it has and will continue to assert its constitutional right in the future if it so chooses.

I highlight again the arrant hypocrisy of the Labor Party in some way portraying themselves as never having gone down this particular path in relation to using the constitutional right of an amendment to a budget measure in the Legislative Council.
The other examples that I did want to place on the public record—and whilst my contribution is a lengthy one, members will be delighted I am not going to go through 150-year history of the Legislative Council in relation to money matters—

Members interjecting

I can hear the groans of disappointment. I am not going to respond by way of responding to interjections, even if they are out of order. I do want to refer to three stark examples where the claims of the Treasurer are just so clearly wrong.

In 1903, for example, in relation to a land tax bill, the Legislative Council made a suggested amendment because they disagreed with the government of the day's proposal in relation to land tax. So, the Legislative Council clearly amended that particular land tax bill and ultimately the government of the day laid the bill aside in the House of Assembly—that is its right under the constitution. The Legislative Council looked at the land tax bill, which was a money bill. It voted against a significant provision in that particular bill.

The suggested amendment went to the House of Assembly, and the government in the House of Assembly laid the land tax bill aside and did not proceed with the land tax bill.

So, there is a clear example in 1903 when the Legislative Council actually made the suggested amendment, and ultimately the bill was laid aside and that particular provision was actually defeated.

In 1912, there was an even starker example because in those days when the annual budget came around there was just a single bill. We now have an appropriation bill, which we have passed, and a budget measures bill, which we are now debating, but in 1912 there was just a single bill. What happened in 1912, with the single bill, which was the appropriation bill, the Legislative Council asserted its constitutional right and it amended two significant provisions of that. One of them was an attempt by the government to set up a brickworks, and for the purchase of timber and firewood for resale. The Legislative Council strongly opposed those particular provisions in the appropriation bill. What occurred at the end of that constitutional dispute is that the appropriation bill—that is, the budget itself—was laid aside and there was an election as a result of the defeat of the budget bill.

Whilst this particular debate now is not about defeating the budget appropriation, because we passed it, the claim from the Treasurer that, since 1857, there has never been an occasion when the Legislative Council asserted its constitutional right is palpably untrue.

In 1912, the Verran government was defeated because the appropriation bill was defeated. They went to an election and they got flogged. The government that tried to introduce that particular budget got flogged and they were thrown out of office in 1912.
As reported at the time, at the general election on 10 February 1912 the Verran government suffered unmistakable defeat, only 16 government supporters being returned to the assembly as against 24 successful Liberal candidates. There was a clear example.

The third example, going back in history, is in 1925 when the government of the day sought to tack items into the appropriation bill. There was only the one budget appropriation bill. The Legislative Council strongly opposed an attempt by the government to establish a state government insurance office and strongly opposed a provision of the commonwealth keeping Legislative Council roles, and the Legislative Council suggested amendments to the appropriation bill.

Unlike 1912, when the Verran government went to an election over what they saw as an amendment to, or a defeat of, the appropriation bill, the 1925 government backed down and agreed to the Legislative Council's suggested amendments in the House of Assembly, and the appropriation bill was passed in the amended form as suggested by the Legislative Council.

They are just three examples where again, whilst it is not strictly what is being debated here, the claims from the Treasurer would lead many people to believe that in some way the Liberal Party is proposing voting the budget down, or voting against supply, or voting against appropriation. That is not this debate, but I put those on the public record to indicate that, again, the Treasurer simply does not know what he is talking about or he is just making facts up, or making statements up, making untrue statements, which are demonstrably false. The facts that I put on the record demonstrate that again.

Let me conclude by indicating again, as I started my contribution this morning, that the Liberal Party will not be voting against the whole Budget Measures Bill. The Liberal Party position will be that the Legislative Council should pass the Budget Measures Bill, but if it supports the position the Liberal Party is putting by way of suggested amendments, we will indicate that we are voting against the imposition of a state bank tax in the Budget Measures Bill.

If our amendments are supported by a majority in this chamber, the Budget Measures Bill will pass. It will go to the House of Assembly, and the government there has three options. As occurred with the car park tax and on a number of other occasions that I have highlighted, it can agree to the amendments of the Legislative Council, jump up and down and say, 'What a terrible lot the members of the Legislative Council are,' but agree to those amendments, and the Budget Measures Bill will pass with the state bank tax clauses removed.

Its second option is to disagree with those amendments and send back their disagreement by way of message to the Legislative Council. That is, the message would come back to the Legislative Council saying, 'We disagree with these amendments. We ask you to change your position.' In that set of circumstances, what would occur is that the Legislative Council, from our viewpoint, would insist on its position. If that is the case, we would insist on that particular position, and then we could either move that the bill be laid aside or we could (the more usual circumstance) send a message to the House of Assembly requesting a conference to settle the differences between the two houses.

The third option that the government and the House of Assembly will have at some stage in the not-too-distant future, if the bill passes in an amended form, as occurred in some of the examples I gave earlier in relation to the land tax bill in 1903, is that the government can lay the bill aside, that is, just say, 'We're not prepared to accept this and we're not going to proceed with any aspect of the legislation.' They are the options in relation to it. Essentially, the ball will be, in the not-too-distant future, in the hands of the government in the House of Assembly, and it is for them to justify their position.

I indicate that the Under Treasurer, in recent evidence to the Budget and Finance Committee, has indicated that, contrary to claims from the government, if the legislation is not proceeded with by the government—that is, they either lay the bill aside or they are not prepared to accept the amendments—the payroll tax concessions that are outlined in this bill, which we will be supporting and I assume a majority of members in this chamber will be supporting, will still be able to be implemented administratively.

So, that is the evidence from the most senior Treasury officer in the state to the Budget and Finance Committee. It would be a more cumbersome process; business would prefer the model outlined in the Budget Measures Bill because it assists cash flow throughout the financial year, but ultimately, as is occurring at the moment prior to this legislation, government administratively can provide payroll tax rebates, as envisaged under the legislation. That has been confirmed by the Under Treasurer.

Similarly, the other tax concession or advantage in this bill is the series of financial incentives in relation to buying apartments off the plan. Again, the Under Treasurer has confirmed to the Budget and Finance Committee that, if this bill was laid aside or defeated in the parliament, the government if it so chose could proceed to provide purchasing of off-the-plan apartment concessions administratively.

So, the claims from the Treasurer that in some way the government will be prevented from providing relief of payroll tax or to purchasers of apartments off the plan is again wrong. They can either choose one of two options: first, they can do what they did with the car park tax and pass the remaining bill and provide those concessions; or, if their decision is to lay aside the bill and not proceed with it, then administratively nothing prevents them from providing the payroll tax concessions to businesses and the off-the-plan apartment financial incentive concessions as well. The authority for that claim is no less a person than the Under Treasurer, the most senior adviser to the Treasurer of the state.

The Liberal Party's position, in conclusion, is that clearly we strongly oppose the bank tax. We think it is bad for the economy, we think it is bad for jobs, we think it is bad for investment and we think it is bad for the future of South Australia. We will move suggested amendments in the committee stage of the debate. We will be asking questions in relation to the detail in the committee stage of the debate, and we urge the majority of members in the Legislative Council to support South Australian businesses, support South Australian families and support the future of the state by voting against the Weatherill government's state bank tax.


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© Rob Lucas 2016 | Authorised by Rob Lucas, Parliament House, Adelaide SA 5000