SPEAKING ON A BILL | STATE TAXATION ACTS FURTHER AMENDMENT BILL 2017
MrMELHEM(Western Metropolitan) — I also rise to speak on the State Taxation Acts Further Amendment Bill 2017. In doing so I think it is a fine piece of legislation which puts in place a number of measures to simplify some of our taxation. One of the first ones, and I think it is one Mr Ramsay has spoken about, is the valuation measures. What I heard him say is that he is violently against it and obviously planning to vote against it. The Municipal Association of Victoria initially had some concerns in relation to how the valuations will take place, because as we know currently it is done by councils every two years. But the proposal is to look at doing a single valuation to be carried out by the valuer-general instead of the local council. One of the concerns the councils have raised as part of the consultation was who was going to bear the cost. The state government has made it clear that the cost of the new method of valuing properties et cetera will now be paid for or covered by the state.
There were a series of consultations with local government and various stakeholders. I have a quote here from the CEO of the Municipal Association of Victoria, Rob Spence, who said, and I quote:
The government has listened to the local government sector’s concerns. The reform is a sensible solution to a complex issue.
There has been debate about local government opposing or having problems with the proposed evaluation system, and it is true that early on a number of councils did raise some concerns in relation to how the system would operate. What the other side has neglected to report is that these concerns were taken care of, they were fixed and various changes were put in place to allay the concerns that were raised by local government. My quote from the CEO of the Municipal Association of Victoria is an endorsement of what the government is trying to achieve. The new system will be centralised, and as I said, the government will pay for the cost. It is estimated that councils will save around $15 million every two years under the new arrangement. So in fact there will be savings for councils as a result of the new arrangements. At least now we will be able to get an up-to-date evaluation every year instead of, under the current system, every two years. It must be seen by any logical person that it is a better, fairer and more consistent land evaluation system for Victorians. I think we should welcome that instead of just opposing it because it is someone else’s idea.
The other area of reform is payroll tax relief to grow Victoria’s skilled workforce. The change will reduce the payroll tax liability for for-profit group training organisations, which include for labour hire purposes and trainees. I had some involvement in advocating that the government should look at some tax relief for payroll for companies who employ apprentices and trainees. Currently if a not-for-profit organisation were to run the same program it would be exempt from payroll tax, but for-profit companies would not be. Mind you, these companies are not going to be making squillions out of it. Most of these companies have a very small margin of profit. Their main focus is to deliver opportunities for trainees and apprentices. I was approached by a number of companies, and we advocated on their behalf with Treasurer Pallas. It was good to see that that was taken on board and now these companies will be treated in exactly the same way as companies who hire trainees and apprentices and do it for profit. It brings a level playing field, which is something I welcome.
I think is important to grow the pool of apprentices and trainees in this state, because we have been suffering from a shortage of skilled labour. For our young kids who leave school and do the Victorian certificate of applied learning, the biggest challenge is their ability to enter the workforce and learn a trade or to get employers to sponsor them. Hence, one of the Andrews Labor government’s signature policies over the last two years has been to encourage companies to take on trainees and apprentices. As a matter of fact there was legislation before the lower house to mandate that on every Victorian major project with a value of over $50 million 10 per cent of the workforce engaged has to be trainees or apprentices.
If we go back 20 or 25 years, organisations like the State Electricity Commission used to employ thousands and thousands of trainees and apprentices. A lot of companies used to do the same thing; but the times have changed. For the last 10 or 15 years it has been very rare and very hard for trainees and apprentices to find a placement with a company to do their apprenticeship and training. Someone needed to go back to fill that gap. Someone needed to step in to drive the change and make sure that young people have an opportunity in this state. The only people who can do that is the state government. That is why I am pleased that for any project in Victoria with a value over $50 million that 10 per cent employed are trainees. That is based against the hourly rates for their total labour costs of that particular project. There are a number of projects going on. There are the level crossing removals — 27 of them have now been completed; there are 23 to go — and all these other projects around the state which now mandate that apprentices should form part of the contract.
This morning the Premier, along with the Minister for Roads and Road Safety and the Treasurer, signed a contract for the West Gate distributor in my electorate. There has been some talk about the cost of the project going up by $1.2 billion, but people have forgotten one thing: they have forgotten that now we are going to have a longer tunnel. The specification of the project and the length of the project has changed. The design has changed. We are getting a longer tunnel. That is why we have the extra cost. The most important thing that is related to this bill is that it will now be mandated that 10 per cent of the labour costs — the bill has passed the lower house, and I will welcome it when it comes to this place and I hope members will support it — will be used for trainees and apprentices. This will give our kids in Victoria an opportunity to have a job. The same thing will apply to the Metro Tunnel; and the list goes on. When the Andrews Labor government came into office it inherited a position from a do-nothing government — not a single major project was on their books apart from the ill-fated east–west link.
MsCrozier — How about the east–west link? What was that?
MrMELHEM — I am coming to that; just hold your horses. The east–west link had no proper business case. It was just a thought bubble, and they decided at the 11th hour to sign a contract which cost this state $1 billion.
I am pleased, as a member for Western Metropolitan Region, that the western section will be built. Construction will start in January next year.
Honourable members interjecting.
MrMELHEM — I will probably never see your proposal built in my lifetime. The Andrews Labor government have invested heavily in infrastructure in Victoria, and I think this puts the other side to shame.
The other changes that this bill introduces involve strengthening and improving Victoria’s taxation system, including land tax. I think some exemptions to land tax have been talked about in relation to not-for-profit organisations. If an organisation is truly not for profit, there is no change, but in the event that an organisation tries to claim the status of being not for profit when they are not, they will be captured by the change. But if you are a not-for-profit organisation, the change does not affect you.
The first home buyer grant will continue. In fact it has been doubled for regional Victorians — it is now $20 000. That is something we all should welcome, and it is paying dividends. That is on top of the stamp duty exemptions and the levy on foreign purchasers. The market is now a bit fairer, which will give first home buyers a better chance to enter the market. Hopefully that will go some way towards taking the pressure off housing prices in Victoria, and hopefully people who want to enter the market will be able to do so. There are a lot of positive changes in this bill, and it is important to recognise that.
There is also tax relief, which I spoke about earlier. There is payroll tax relief for training organisations. The government has already delivered over $560 million in tax cuts for businesses in Victoria over the last three years, including lifting the payroll tax threshold to $650 000 on 1 July 2018 — a move that benefits around 38 000 Victorian businesses. The other change is a tax cut of around 25 per cent for the payroll of regional businesses. This ensures regional businesses will have one of the lowest payroll taxes within the country. So there are a lot of positive changes in relation to tax.
Tax settings in Victoria remain highly competitive with other states. If you look at tax and royalty revenue per capita, we will take less tax than New South Wales, Western Australia and the ACT in 2017–18 and across the forward estimates. Significantly, the opposition in their term in government increased taxes. In 2013–14 state taxation revenue grew by 8.8 per cent, in 2014–15 it grew by 8.5 per cent and in 2014 alone the member for Malvern in the Assembly hiked motor vehicle taxes by over $580 million.
The changes proposed in this bill are fair and reasonable, and they ought to be supported by this house. We have delivered on all of our commitments. It is important that we reform the state’s taxation system to make sure it is modern and to stimulate the economy. We have created 280 000 jobs in the last three years. That is a testament to the way the Treasurer, the Premier and the whole of the Andrews Labor government have delivered on all of their commitments over the last three years. The government ought to be congratulated on that, and I commend the bill to the house.
12 December 2017