Mr PALLAS (Tarneit) — It gives me great pleasure to rise to speak on the State Tax Laws (Budget and Other Measures) Bill 2013. In so doing I indicate that members of the opposition will not oppose the bill, although we will raise some concerns about the government’s continuing obsession with finding new and insidious ways of increasing its capacity to extract money from Victorian taxpayers. A summary of the content of the bill has been provided by the Treasurer in the context of the second-reading speech, but it is important to note that those of us on this side of the chamber have grave concerns about some aspects of this bill.

The government’s claims about the comparative merits of its budgetary and financial management of the economy do not stand up to any rigour. This bill increases the amount of the congestion levy and extends it to short-stay parking spaces in the CBD and inner Melbourne. I do not think anyone would be able to find a single member of the now government who in opposition did not stand and indicate their diametric opposition to the concept of a congestion charge. Before they came to government, one after another they got up in this place and said the congestion levy was nothing short of a revenue-raising measure.

Since coming to government those opposite have demonstrated their hypocrisy by showing that they have nothing better to do than raise revenue. The fact is they have turned it into an art form. After expressing a desire to remove the charge, government members are not only increasing it but they are extending it. They got up in this place and said, ‘We hate the idea of a congestion levy; we would get rid of it in government’, but what happened when they got into government?

They did not get rid of the levy but instead found a way of substantially increasing it not only in terms of the amount it manages to garner from Victorians but also its physical scope, which will increase the government’s capacity to extract funds from more users of car parking spaces in the state. That is exactly what this bill does.

This bill stands testament to this government’s hypocrisy and lack of philosophical clarity in terms of the direction it wishes to take. This hypocrisy is impeding not only the government’s capacity to manage the state’s economy but also its ability to elaborate a clear vision for the future. This bill is an attempt by the government to garner funds from whatever sources it can in an effort to embellish an eroding budgetary position that it has been the custodian of and is ultimately responsible for.

The changes to the first home buyers grant are a thimble and pea trick that in many ways will significantly disadvantage many Victorian first home buyers. We know this will happen because the experts have said so, and I will speak about that in due course during my contribution. On the subject of the fire services property levy, opposition members know exactly how difficult government members are finding it to sell their message, and it will only get more difficult as we go forward. Members of this government are out there now using taxpayers’ funds to extoll the virtues of their fire services property levy. They claim that their advertising campaign is information and re-education — any other word but ‘advertising’.

If we think back, we can remember that those opposite used to get up one after another to complain when government funds were used to fund Transport Accident Commission or Victorian WorkCover Authority advertising.

They described Labor’s campaigns as being political, but now they claim their advertising campaign for the fire services property levy is not political advertising. They say the campaign’s focus is on educating people about their entitlements. Victorians will see through that, and they will see through the transparent costs that will afflict them. When Victorians get to see both their insurance bills and the amounts they will have to pay in fire services property levy, they will know.

Mr Walsh interjected.

Mr PALLAS — There we go! We have heard from the Deputy Leader of The Nationals that Victorians will have significant savings. We will put that to the test when we compare the cost of those insurance bills and the fire services property levy with the previous allocations. Make no mistake! We will be watching. Victorians will be watching, and they will be voting with their feet.

Thanks to a freedom of information request, I have already received a list of literally hundreds of people who have written to the Department of Treasury and Finance expressing concerns about the operation of the fire services property levy. It is not good enough to say, ‘We will put it to the Public Interest Monitor’. If people are going to be disadvantaged as a consequence of unfair legislation, then it is those opposite who are responsible for it, nobody else. Government members should not try and hide behind Alan Fels or anybody else. They will stand responsible for the operation of this legislation.

Overall this bill is sneaky, dishonest, hypocritical and ineffective in terms of its broad objectives. The members of this government have become exceptionally good at increasing debt.

Honourable members interjecting.

Mr PALLAS — Yes. They are the gold medallists of debt increase. This is a government that is better than any government in the last — —

The ACTING SPEAKER (Mr Weller) — Order! The member for Tarneit, without assistance. Government members will get their turn. I ask them to come to order and listen to the member for Tarneit.

Mr PALLAS — I hope you insist that government members are factually correct, because we know what the Auditor-General said in his midyear update in November 2012. He made it very clear that there are increasing concerns about this government’s debt strategy and its capacity to manage its debt issues.

This government has continued to grow debt further and further, and at the same time its members have found new and imaginative ways to raise revenue. Government members are doubling the amount of the congestion charge in terms of the revenue the government will receive. Government members are imposing charges on the public despite having promised before the last election not to raise taxes. That was their commitment to the Victorian people — not to raise taxes. We should sit back and see exactly how many taxes this government has raised.

I remember how, after 10 years of Labor being in government, the previous Treasurer — temporarily the Treasurer, now pursuing different fields of endeavour as Minister for Police and Emergency Services — put together a list of 26 taxes and increases in charges over the CPI that the Labor government had imposed upon Victorians. How big do we reckon that list is after two and a half years of this government? Let me tell members that it is at least double that during this government, and opposition members have not even been trying. Government members spent 11 years putting together a list of those taxes. It was a tawdry little list, but now we get to see exactly what members of this government are good at — that is, getting into Victorians’ pockets. They are good at talking up a good fight about debt reduction and then doing nothing about it, indeed doing quite the contrary.

Then we heard the nonsense coming from the mouth of the Gilligan who pretends to be the Treasurer of this state.

He got up and said that if Labor had remained in government, debt would have got to 17 per cent of gross state product. It is the sort of argument you would hear from somebody who does not understand that governments confront the challenges that present themselves. They adjust the economic circumstances and — guess what — they govern in the interests of Victorians. They do not just pretend to have a strategy or a policy before an election and then turn around and trash it in terms of the policies that they put in place. This legislation is nothing short of a demonstration that strips this government bare of any philosophical commitment, any philosophical touchstone, anything that actually made its members stand up for any principle before the last election.

Before the election government members said they were going to reduce taxes, but they have increased them. They said they would not increase debt, and they went about effectively massively increasing debt.

Members of this government have absolutely no idea about not only what their policies are but what their principles are. This is a government stripped bare of any principles that would commend it to the Victorian public, and this is a bill that makes government members totally unmeritorious in terms of their prosecution of the responsibilities the Victorian people gave them at the last election. Government members claim to be encouraging construction activity but only provide a meagre measure through the provision of the first home buyers grant. There is less value in the grant than there was when this government came to power, yet government members are presenting the first home buyers grant as if it is a win for the people who receive it.

They are effectively delegating tax collection powers to councils and potentially outsourcing State Revenue Office functions to the private sector. Let us look at this government’s so-called budgetary management skills. In the second-reading speech the Treasurer made the following amazing claim:

Over the past decade, the state saw considerable revenue growth which was outpaced by increases in government expenditure, and without action the growth in government net debt would have become unsustainable.

Effectively the Treasurer was saying that revenue growth was outpaced by expenditure growth. In fact in terms of own-purpose funding over the period 2005 to 2010, revenue consistently covered expenditure amounts. Much of the growth that occurred in revenue and expenses in the final years of the Labor government was due to grants and projects stemming from the commonwealth government’s stimulus package. The revenue and expenses generated by the state government itself actually remained relatively flat over that time.

What has happened since the coalition government was elected? We would have expected the Treasurer to have shown his great capacity to wean himself off revenue growth.

In fact state-generated revenue and expenses have both increased.

Ms Ryall interjected.

Mr PALLAS — We hear the member for Mitcham interject about the GST. Let us remember a little bit about the GST. Back when the Treasurer was the second best adviser to former federal Treasurer, Peter Costello, Victorian receipts under the GST averaged 84 cents in the dollar.

Mr Nardella — How much?

Mr PALLAS — It was 84 cents in the dollar. While he was in opposition it reached the dizzy heights of 90 cents in the dollar, and he declared that the Victorian government — a Labor government — was swimming in ‘rivers of gold’. He described it as rivers of gold. Of course now that we are back to a return in GST of around the 90 cents in the dollar, we hear him bleating. Why did he not stand up for Victoria when he was Peter Costello’s second best adviser? He was doing nothing. Essentially what we know is that debt remained consistently very low in terms of percentage of gross state product under the previous government but has increased rapidly since the 2010 election and is projected to peak at the dizzy heights of 6.6 per cent in 2015.

Prior to the 2010 election the coalition promised to improve services without pushing up debt. That was its promise. Coalition members put their hands on their hearts and said to the Victorian electorate, ‘We are not going to push up debt, and we are not going to raise taxes — because we are magic’. Once in power, what did they do?

Debt has gone up through the roof, and they have increased taxes. This bill is a demonstration that they will not stop at any opportunity to get their hands in the taxpayers pocket. They promised to prop up the Victorian economy effectively by their intervention, by their sage and deft hand on the tiller of the economy, and what did we see? We saw them increase own-source revenue — that is, the stuff that they are responsible for, not anybody else. This government put it through the roof. It is this government and no other that has developed new and imaginative ways to pump up revenue options, and this legislation contains some of them.

But how do you find that revenue? Firstly, you have to cut yourself adrift from anything you ever said in opposition. You have to give up on anything you ever said because that was the stuff you pretended to believe in before you formed government. This government is not only tawdry but is also full of impostors.

It pretended to be one thing in opposition but when it got into government it did exactly the opposite. To prop up its solitary goal of economic achievement and budget management this government insists on disseminating the myth that it has controlled the level of state debt and expenditure, but it continues to grow both.

This government has been both hypocritical and profligate, and it requires a pretty deft hand to get away with it really. It is a government that says, ‘We know how to manage debt, and by the way it’s going through the roof, but it would have been worse if that government that had previously managed to keep debt to about the same level as a percentage of gross state product as the Kennett government did when it left office — not before it left office — were in power’. The Labor government managed to do that. This government has managed to double the level of debt as a percentage of gross state product since then.

We are seeing state debt rising to an enormous level from a government that pretends it has a solution but whose only solution is to get into your pocket.

Let us talk about how it is going to do that through this bill. The congestion levy is a tax that is currently applied only to long-stay car parking spaces in the CBD. Long-stay car parks are those where you effectively enter before 9.30 a.m. and stay there for at least 4 hours. This tax was designed to capture car spaces used by people who commute to work in the CBD by car but avoid taxing those who are in the city for other reasons — and for good reason. It is not about cutting back the economic activity of those areas. If you had listened to the former Treasurer, the former Premier or the current Premier when they were in opposition, you would have thought that imposing such a tax would have massively affected the retail capacity of businesses affected by it.

However, it cannot have affected them so greatly that when those members got into government they decided that it would be a really good idea to double the tax take through a variety of measures contained in this bill and in these specific provisions. That is as clear a condemnation as you can get of a government.

To this end, there are exemptions in the bill which deal with residential parking, visitors parking, special events, disabled parking and so on. When the levy was introduced in 2005 the now Premier denounced it as ‘purely another tax grab by the greedy Bracks Labor government’ and said it would do nothing to ease congestion. The coalition has taken a tax that it was diametrically opposed to — because the tax would not work — and decided, ‘It does not work. Let’s double it! That’s a good idea’. That is the principle the government stands for: the principle of having no principles. What a government!

In the lead-up to the 2013-14 budget the government announced that it would apply the congestion levy to all car parking spaces, not just long-stay car parks. That is a dramatic change, which may well have an impact on businesses in the area, particularly as it will affect people who are coming in not because they like to commute to work but because they want to shop in retail areas. Remember retail areas? Retailers were the people government members in opposition cried rivers of blood for, claiming retailers were affected by the inappropriate actions of the previous government. The no. 1 issue was the congestion levy, which the then opposition saw as nothing more than a tax grab. Government members have now turned the tax grab into a tax bonanza, to use their own language. We have seen in the government’s budget that this allocation, this tax, will raise $183.4 million over the next four years.

There is also a technical change to the Congestion Levy Act 2005, which brings into doubt whether the exemption for hospitals will remain in place. Because the parking space must be owned by the hospital, if a health service has sold the contract for the car parking services to another operator, the tax may apply. There are reports that the Epworth hospital may, for example, be affected. In opposition the now Premier derided the congestion tax as a greedy tax grab that would hurt business. The Premier is not just intent on hurting business but has raised the prospect of grabbing money from hospitals, which will find one of their revenue sources has been cut or at least that their return from that revenue source has been substantially undermined by the additional tax liability that is proposed in this bill.

Applying the congestion levy to short-term car parks means that it directly targets shoppers at a time when the future of retail has never looked less certain and when literally hundreds of thousands of jobs are being reported by the Australian Retailers Association as falling out of this sector. This is a job-destroying government. It is a government that in its first budget could not even bring itself to mention the word ‘jobs’. This government was not prepared to put in place a jobs and investment plan like Labor’s, but every now and again you hear government members pick out a part of that policy that they really like, such as our procurement policy. In Parliament today we heard members and ministers of this government suggest that local government should buy more local cars. Guess what? That was in our procurement plan, that was Labor’s policy and it only took government members eight months to get around to implementing it. This is a government that wants to be in our pockets but cannot manage the finances of this state.

In its haste to get this tax through the Parliament the government has written a very sloppy piece of legislation. The result could be taxing people for visiting their relatives in hospital. The result could be a demonstration that this government has no moral compass and no economic virtue. The government says that the revenue is going to go back into public transport and roads, but where is the evidence of that? Where in this bill do we see a commitment to hypothecation?

The government has cut road maintenance funding, it only provided $294 million for its east-west tunnel procurement plan and our public transport is getting less reliable every year. Government members say, ‘We are going to put the money in — take our word for it’, but that is all you are left with to take. Who in their right mind would take the word of this government? It is a government that said it would reduce taxes, and then it increased them. It is a government that said it would not increase debt, and then debt went through the roof.

Not only does this government have no idea but it has no sense of virtue. Quite frankly, government members should be hanging their heads in shame. This bill is a demonstration that the government has no idea about how to best manage the circumstances of this state.

We now move on to the changes for first home owners. First home owners currently receive a grant and stamp duty reduction on the purchase of their property. In April the Treasurer announced a series of changes to these benefits. Firstly, the first home owner grant will now only be available to purchasers of new homes valued at less than $750 000, but the grant has been increased from $7000 to $10 000. This follows the removal last year of the new-home-only $13 000 first home bonus and the $65 000 regional bonus, which were introduced by Labor in 2010. The stamp duty reduction has been maintained for all first home purchases, and the cut of 40 per cent for homes up to the value of $600 000 has been brought forward to have effect from 1 July 2013, rather than 1 January 2014.

The justifications for this move to providing the grant for only new homes are, firstly, to encourage construction activity and, secondly, to bring the scheme in line with New South Wales, Queensland and South Australia. The number of dwelling construction approvals has fallen since December 2010: there were 5849 dwellings approved in that month and 3872 in April of 2013. Full-time construction jobs have actually gone backwards by 6400 jobs since November 2010. This has been a continuing pattern with this government over the last two years. The changes will do little to offset the cuts from last year.

When these changes were announced the Treasurer claimed that the effect would be to make the dreams of many young Victorians become a reality sooner. Nothing could be further from the truth, or more cruel. He noted that a first home buyer buying an established property would, because of the stamp duty concession being brought forward, effectively have the loss of the first home owner grant offset by stamp duty savings of $7588.

The announcement failed to mention that the majority of first home buyers will actually be worse off as around 70 per cent of first home purchases tend to be of established rather than new stock housing. You could not find a more dramatic demonstration of a thimble and pea government. This is not a government with the heart of a pea or a thimbleful of courage when it comes to putting in place a serious economic agenda but a government that likes to pretend to the people of Victoria that it is trying to do something for them when the practical effect of these changes is that 70 per cent of all first home owners — that is, those who buy established stock — will be worse off.

That is what this government is all about: trying to pretend to be doing something and making things worse, because its values are so skewed. Its basic principles and its lack of honesty with the Victorian people about what challenges confront the state and what genuine efforts need to be made to address them have been shrouded in an effort to pretend that all is going fine and there are no taxes, and if there is anybody to blame, it is the Labor Party, it is the financial crisis, it is the GST or it is the federal government. You name it, but it has nothing to do with this government.

Most first home buyers will be worse off under this scheme. The government claims it is seeking to encourage housing construction, but under its watch it has reduced the incentives overall, and we know what the practical effect is. Because of the government’s policies since its election in November 2010, the volume of people employed in this industry has reduced overall. The government is taking the grant away from the majority of first home buyers to give it to the minority, effectively robbing Peter to pay Paul. Whatever constitutes the policy framework that underpins this, virtue and fairness is not part of it.

Finally, I turn to the fire services property levy amendments. This government is putting in place a fire services property levy which is a burden on councils. It likes to pretend that it is a council tax. The government has required councils to raise the revenue for it. It has even put in place arrangements that dictate exactly how the levy is to be raised.

I hear from the Minister for Agriculture and Food Security, who is at the table, that the government is not forcing councils to raise taxes, and I hope he puts that on the record because plenty of councils will take that option straightaway. They will say to the government, and they have said to the government, that it is contracting them to do this against their will. That is a new form of contract. It is the contract you have when both parties do not reach what a lawyer would say is a ‘consensus ad idem’ — that is, if there is not an agreement, you just tell them what to do. That is basically the standard operating procedure of this government. It says, ‘We will tell you what to do, take our word for it and, quite frankly, we will force an outcome that we see as being appropriate’.

The fire services property levy is a burden on councils.

More generally, the Treasurer will not give a straight answer about whether people who had previously been paying the fire services levy through their insurance might end up paying more under the new charge. We have been led to believe there will be no losers from these arrangements, but we will see. The changeover process has put people at risk of being overcharged by insurance companies that should be phasing out the fire services levy component of their premiums. We know this government has become addicted to finding new and insidious ways to tax people, and this bill is just a further manifestation of a government without vision or effort.

See Tim’s speech in Hansard here.