Duties Amendment Bill 2019 (No 56)
[11.42 a.m.] Ms ARMITAGE (Launceston) - Mr President, I speak briefly on the bill as I do not have any real concerns. I have listened to the member for McIntyre and while I understand what she is saying, I think land tax has always been an issue - we have all fought for constituents not to have to pay land tax.
Ms Rattray - To no avail.
Ms ARMITAGE - To no avail because it is simply the way it works, unfortunately. It is not a retrospectivity issue; it is just the way that it is with land tax.
Ms Forrest - It is giving effect to a policy intent that was supposed to be there at the outset.
Ms ARMITAGE - It is not something we can do anything about. I do not really see that it has any bearing on this bill.
Ms Rattray - I thought it was a very strong argument myself.
Ms ARMITAGE - I guess we all have our individual opinions, but to me - no, I do not see that as being a retrospective issue. It is important to ensure that Tasmanian legislation remains as current as possible and most accurately reflects the state of the investor markets.
I note that the Duties Amendment Bill 2019 will also increase the Foreign Investor Duty Surcharge (FIDS) on the proportion of the dutiable value mentioned in relation to residential property directly or indirectly acquired by foreign persons to 8 per cent and primary production property directly or indirectly acquired by foreign persons to 1.5 per cent.
I do not have any issue with that.I believe the Treasurer has had a great deal of feedback on the duty surcharge, with many people caught by this who should not have been caught. Various bodies have been consulted on the definition of foreign person to make sure we now have it right. To this end, the Government's review of the definition of a foreign person has been a good course of action because it enables the wider public policy surrounding foreign investment to be more consistent.
The words to this amendment to the Duties Act will help ensure that only genuinely foreign persons, companies and trusts will be charged the Foreign Investor Duty Surcharge. Furthermore, I am pleased that taxpayers who have previously paid the FIDS will have the opportunity to apply to the Commissioner of State Revenue for a refund. While I am not fan of retrospectivity, this amendment aims to restore the original policy intent of the surcharge - that is, to give back the charge to those persons who are essentially Australian and should never have paid. I see this as fair. It is extremely important that Tasmania and Tasmanian businesses remain attractive options for investors. This requires a legislative and economic climate that is conducive to fair and reasonable taxation requirements.
We might actually mention that, member for McIntyre, to the Treasurer next time we speak to him with regard to land tax. That is an argument for another day. For businesses that invest greater amounts, which can afford greater outlays and thus receive greater dividends for successful operations, it is only fair they can also afford to pay a greater amount of taxes for the resources they use. When investors are foreign and taking more of the revenue made away from the country it, of course, makes sense for there to be a levy for this privilege.
On the other hand, however, we cannot scare investors away. We must make it as easy and attractive as possible for investor dollars to reach our unique and boutique Tasmania-based businesses.Not unreasonably, much attention is given to Chinese investment in Tasmania; however, we have to remember this applies to all foreign investment. To give clear and better definition to a foreign person, company or trust means the playing field will likely be more even and fair to investors from other countries that take an interest in Tasmania, including Korea, Japan, European countries and the Americas.
It is important that no loopholes can be used to avoid paying the Foreign Investor Duty Surcharge. It is not encouraging to know that in some instances offshore shelf companies make many millions of Australian dollars and their tax revenue is largely taken away from Australian shores.I am pleased this bill affords clarity around the definition of a foreign person, company or trust. It is my sincerest hope that as a result we will have more transparent commercial transactions and taxation practices.
I support the bill.