Mr Pallas (Tarneit) — This is a matter  of public importance. It goes  to the heart of this government’s competence,  its willingness to listen  to the people of  Victoria and its willingness  to  stand  and  act  in  accordance  with  its pre-election rhetoric. Its failure to do so is costing Victorians dearly. I will share a quote with members:

  Land tax increases are passed on to tenants, be they small business tenants or  residential tenants. Increased land tax means increased rents,  which means it  is harder for  renters to pay the  rent  on their homes and  harder  for small  businesses to pay the rent to keep their businesses afloat.

Whose  are these  words? They are the words  of none  other than  the Treasurer, spoken in this place on 11 March 2009.

When you replace the words  ‘land  tax’  with  the words ‘fire services property levy’  or,  as  the Treasurer might have it, the  ‘fairness  fund’,  that  quote provides a very neat summary of the legislation that this government has passed.

This matter of public importance condemns the government’s botched, arrogant and insensitively managed introduction of  the fire services  property levy and  the bungled implementation, with its multimillion-dollar advertising  campaign aimed at telling Victorians that black is white, that  injustice  is fairness and that sloganising  simplicity  is the quickest  path  to a taxpayer’s  pocket. It also notes the pain  that  the  Treasurer and this government have caused to tenants, property  owners and business  owners  right across Victoria.  The party of  the forgotten people has once again forgotten people.

The recommendations  for these reforms came out of the  2009 Victorian Bushfires Royal Commission.

The problem was that some people paid more for fire  insurance than  others did, some people were  underinsured  and  some  people  were  not insured at all. The promise  was that fire services funding would be recalibrated  in  the  name  of fairness. The ideal result would have been to see the burden shared equally, but the ideal  result  has  not  eventuated  or  even  come  close to happening. The legislation the  government  has passed  certainly  recalibrates  fire  services funding, but not in the name of fairness. There is still unfairness  and in some cases far worse than what was there before — and this time the unfairness is by design. It is embedded in the  words of  legislation, it is deliberate, and from day one the opposition recognised it. Opposition members lobbied the government, we pointed out the problems, we exposed the disadvantage and we sent the stories of so many distressed Victorians straight to the Treasurer’s office.

It has not just been opposition members who have heard these stories.

The  State Revenue Office  has been swamped with  correspondence from ratepayers wanting to know why  they  are paying so much  more, including one who  said  he would rather be paying a tax on a tax on a tax than this unfair new levy.  Given the enormity of  this new tax being imposed on many, this is  hardly a surprise, but it  is also  hardly a  motivator for this government and  this Treasurer  to admit  error and  fix a  problem of  their own  making. The opposition  gave the government the means of conducting a  full review. The government refused it. It rejected it.  Its  members did not want  to hear about a review  at all, because this Treasurer and this government are satisfied, despite the weight of evidence to the contrary, that the fire services property levy is indeed  fair. This is a blissful satisfaction, born of conceit and indifference.

The Property Council of Australia wrote to the Treasurer  in March,  when it had worked out that properties would be seeing 300 and 400 per cent increases in the fire services property levy (FSPL). These are its words:

  …it appears to operate  in direct conflict with your government’s commitment  to introduce a  ‘fairer  and more equitable system of funding fire services in  Victoria’.

The council went on to say:

Unless changes are made to  the  current  FSPL model, the state government …  risks   undermining  Victoria’s  economic  growth,  business  investment,  job  creation, fire  safety  standards and the  superannuation savings of  the 11.2  million superannuants who collectively invest  in Victoria’s investment  grade  … buildings.

What does the Treasurer say about that? He  says, ‘We’re sticking up for the top end of town’.

He should wait until the  property council  hears about  that and until the 11.2 million superannuants, those self-funded retirees, who are being slugged by this tax, work out exactly who is behind it. The property council went on to say:

  … the FSPL represents a massive  increase  in  the  tax  liabilities for the  property  owners  listed and is  of  a magnitude  the  property council cannot  support.  If  the  state  government  intends to  stay  true  to  its  private  assurances that no Victorian … who has been paying  FSL will  be worse  off,  then a substantial adjustment to the FSPL rates will be required.

There are a number of things wrong with this legislation.

To  start with,  the transition  period gave a lot of  people the  impression of unfairness.  The  Treasurer will of course talk about the great fairness of this legislation, but what  we  will  not  hear  about  — leaving aside the constant overblown rhetoric of those opposite about substantive reform — is what goes to the heart of this legislation: the mechanics of the levy, the rules of the rate, how  it is collated and how  much is collected. That is the bit that is well and truly broken.

Somehow  under these  reforms  not-for-profit  community  housing organisations, those institutions which provide such a vital service to so many in our society, were classified as commercial operations. These not-for-profit community housing organisations were charged the  commercial rate. That is  part of the  so-called fairness.  In  an embarrassing backflip,  once  the Age reported  that  that had occurred,  the  government  backed  down.  However,  let us look at the ones the government is digging in on.

There are other spectacular bureaucratic blunders to  be  seen.  But we know the government will not move on this.

Last sitting week we gave government  members the opportunity in this Parliament to  pass legislation  enabling a  review of the fairness of the operation of the levy, but they voted  against that, congratulated themselves on their own  model and expressed surprise that Labor wanted a review of the legislation so early in its operation. That so much angst could have been generated so quickly by such a poorly managed piece of  legislation  should  not  come  as  a  surprise to this government, but government members have not been listening.

Among residential use investment properties, units alone — that is, a  group of single-title units within a  building, each rented  out,  being charged on  each individual title  — are classified  as  commercial operations  and  charged the commercial rate.

The municipal council  considers those groups to be residential, the  old system considered  them to be  residential  and insurance  companies  have preferred to insure a group of single-title units  as  one whole and not to charge  on  a per unit basis. But the government has a different  idea.  Obviously this change has increased payments manifold, sometimes five times over,  and in many cases those costs  cannot  be easily or immediately absorbed. They are costs which  will  be passed on to tenants in rent increases. It  is the same as the  injustice around land tax that this government and this Treasurer railed against in opposition.

Consider the case of Ms Peluso from Lyndhurst, whose total payment has gone from $439 to $3122,  a sixfold increase; or the case of Jennie, from my electorate of Tarneit, who had a 450 per cent increase; or the case of  Mary, from Melbourne’s northern suburbs, who was paying $199 and is now paying $1480.

Who could forget the pompous, arrogant retort from the Treasurer  —  the  Peter Pan  of economics,  the boy  who  never  grew  up  —  when confronted  with the situation  of the disadvantage  faced  by many self-funded  retirees  who are in exactly  this predicament? They  were  the asset-rich  but  income-poor, we were told, for whom Labor had concern.  But no  concern was  shown by those opposite, just a taunt that Labor had faux concern for the rich, as the Treasurer put it.

I ask  the Treasurer:  if all properties in Victoria are now  being charged  the levy, then how  is  this significant increase justified in the name of fairness? Who exactly is this fairer for? Commercial car park owners? Storage unit owners? They  get hit  too. Previously  they were paying the fire services levy in their insurance; now they pay  the levy separately and it is much higher, in  one case 10 times  higher. For  example, the  owners of  a commercial car park in Fitzroy Street were paying $6800 a year in fire  levy. Now they are paying $63 755.  Who cops that fare hike, Treasurer?

Who cops the fare hike  for these  car park  operators? The Treasurer knows that under the basic law  of  economics the increase will  be passed on to  car  park users —  a tenfold  hit to  the  budget. These  are the  effects his  so-called ‘fairness’ tax have wrought.

What about the many men and women  in  country  Victoria  who  effectively  have bushland properties? They  have  no livestock and  no agriculture yet  they  are classified as primary producers even if they are not producing anything. We have heard from one constituent whose property is purely residential and who does not make a dime off the land but who is getting charged the commercial rate. Her  local  member  is  no  less  than  the Premier of Victoria. I think he should have a chat to her and explain to her how that is fair.

What about the sad and  distressing case of the 100 or so  migrants  who some 50 years ago were conned  into buying worthless swampland  at the so-called ‘Golden Beach’ in Gippsland? These people are victims. They were swindled half a century ago and their trust in the promise  of their  new homeland  was exploited. Their land, after all these years  and despite the costs they were conned into paying, is only worth $100 a block.

  Mr O’Brien interjected.

Mr Pallas — The Treasurer says, ‘What did  we do?’. We did not hit them year on year with a property tax that was more than the value of their property.

That is what we did not do.  Year on year this government has charged them  more in fire levies than their land is worth. It seems no-one is immune.

It is  not just  the Labor  Party pointing  out the unfairness  inherent in  the design of this levy. The Timboon branch  of the Liberal Party wrote  to the then Treasurer about the  fire  services levy, a  regular topic of  conversation  and concern at branch  meetings.  Another  resident wrote to the Premier to say that they  are now  paying more  under the fire services property levy than they ever had in  their 25  years of  being insured.  While they  had  once  believed  the coalition would be good for Victoria, they now say:

  … I have never been so  wrong  in my life and rest assured  will  never ever  vote for you again.

And what about the members and affiliates of  the  Royal  Historical  Society of Victoria, a small group of volunteers who do important work digging up our local history  and  working  on our genealogy? The new fire services property levy  is eating  up  a  quarter  of  their  annual  budget.  One  of  those  groups,  the Landsborough  and District Historical  Society, is an  organisation with a  $900 turnover  but it has to shell  out $200 under the  government’s new levy. We ask ourselves, ‘Is that fair?’.

This  government continues to hide.  The Treasurer continues  to  hide under the rhetoric that if  you  do  not  support  unreservedly  his botched tax, then you oppose it. Of course that is ridiculous. The Treasurer says that the Labor Party should not be concerned with the asset-rich, that we  should  not  be  concerned about the tales of  distress and  concern that  have swamped  us and swamped the Department of Treasury  and Finance, according to  its annual report, which says it is massively burdened.

Airbrushed advertisements and workshopped  words are no match for the weight  of evidence. They are no match  for the men and women  who have come to us and told us their distressing stories. This is a failed reform, a failed transition and a failed implementation  which  fails the  test  of  fairness and  the  people  of Victoria.

The Treasurer can  tell the  people of  Victoria who  own homes  that have  been branded as commercial enterprises and  the struggling small business owners, who cop  it  right where it hurts —  who  pay  for car parks, for ATMs, for  shared facilities,  for  granny  flats, and  for  the greed and  rapaciousness  of this government — and the tens of thousands of ordinary Victorians the Treasurer has kept up at  night  calculating  budgets  in  their  heads  for the fire services property levy.