THREE Lower House crossbenchers, including one former Liberal MP, are set to vote against land tax changes which face an increasingly uncertain path to pass in State Parliament.
Treasurer Rob Lucas used last month’s State Budget to reveal a $40 million-a-year clawback of land tax by preventing people from reducing their bills through complex ownership structures.
Amid fears of a backlash from investors, it has sparked an internal party revolt which is set to be aired at a party room meeting this evening.
A group of Liberal MPs is working internally to have the plan scuttled even before it reaches Parliament for a vote.
Independent MPs Troy Bell, Geoff Brock and Frances Bedford told The Advertiser yesterday they planned to vote against legislation needed to bring the changes into law, saying it posed an unfair hit to people who made major investments under the current system.
Mr Bell, who resigned from the Liberals in 2017 amid an Independent Commission Against Corruption investigation before being re-elected as an independent MP in his own right last year, said a surprise landtax change would devastate South Australia’s reputation as a safe place to invest.
“I think this is more damaging than the proposed bank tax that Labor tried to implement,” he said.
“The reason why I will be voting against it is that, in this country and state, people make business decisions based on the rules that are in place, with the general understanding that if the rules change, then they do so from that point in time onwards. The number of phone calls that I have received is pretty extraordinary.
“Some people will be $200,000 or $300,000 worse off. Their attitude at the moment is that they will have to sell those investments, but they don’t know who to because buyers will be in a similar situation.
“We want our state open for business, not being the last place that you’d invest.”
Mr Bell said the tax change was “not what I thought the (Liberal) platform was leading into the election”.
A Labor spokesman said “we are continuing to consider our options” on a vote, as it waited for the State Government to release more details.
Labor backing would be enough to secure passage of any tax package.
However, opposition from Labor and the full crossbench would put Premier Steven Marshall at risk of losing a vote if the threats of his own MPs crossing the floor were realised.
Mr Brock, who considered supporting the Liberals in the 2014 hung Parliament before taking a spot in Labor’s Cabinet, said it wasn’t “fair” to hit people who had followed the rules.
“People have already done these investments and put it all in place legally,” he said. “To just have it just changed, I’ve got a real concern with it. Unless I can be convinced otherwise, I’ll be voting against it.”
Ms Bedford, a former Labor MP, said the land-tax shift threatened to up-end investments in a similar way to the franking-dividend policy her former party took to the federal election.
“People weren’t ready for that, and you can’t thrust it on them without warning,” she said.
Ms Bedford said she and her advisers would consider details of the land-tax changes when the Government finalised its package but, she added: “We don’t like it at the moment.”
Mr Lucas has said there would be further consultation before legislation was expected to go to Parliament in September. He said changes to the final reform could include reducing the highest rate of land tax that is paid, while maintaining the crackdown on ownership splitting.
Upper House crossbenchers have also signalled a rough ride for land tax, as SA Best and independent John Darley raise concerns, including the effect on superannuation.
Parliament will resume sitting tomorrow.