Second Reading Debate - State Taxation Acts Amendment Bill 2018

Extracted from Hansard
23 May 2018

Second Reading Debate – State Taxation Acts Amendment Bill 2018

I rise to speak on this bill, which implements a range of budget measures and changes to the state taxation and revenue laws. I note that in the second-reading speech the Treasurer said:

This bill delivers budget initiatives that will continue the … government’s commitment to delivering greater benefits to regional Victoria.


The government is a strong supporter of the … agricultural sector.

I will focus most of my contribution on those two points, because having read that I believe the Treasurer and those on that side of the house might need a bit of an education on regional Victoria.

I am sure those opposite will be quick to point to the payroll tax cut as if it is some sort of Hail Mary that will drive growth into regional Victoria. But you cannot just lower one tax and expect people to start employing. The average value of this change is around $40 million a year, while payroll tax has increased by $1 billion a year since the election in 2014. Once again what we are seeing is smoke and mirrors, or hoodwinking. The example I heard before to describe this was it was like putting $5 in the collection plate at church and making a big show of it, but taking out $100 with a swift action that nobody sees. That is precisely the analogy that explains how ridiculous this is. The Department of Treasury and Finance cannot even say how many regional businesses will actually meet the criteria for a lower rate of payroll tax. We know that 4000 businesses pay payroll tax, but if you have not done the analysis to work out how the regions will benefit, you are talking the talk but not really understanding the effect of what you are doing, so you are nowhere near being able to walk the walk.

The Andrews Labor government has made Victoria the highest taxing state in the country, introducing 13 new taxes and charges since the last election, despite the Premier saying that he would not introduce new taxes. He has driven the cost-of-living pressures on households through the roof. That is the direct result of raising taxes. You have affected mothers, fathers, families, businesses and workers. How could this be purported to be supportive? Again it is smoke and mirrors; it is not reality. They have affected the cost of living drastically. Why would one tax cut — which is minimal, and we have no idea how many people it affects anyway — encourage businesses to set up in regional Victoria when there is a lack of adequate infrastructure in the regions? In South-West Coast our roads are falling apart, our rail service is abysmal and in large parts of the electorate we have antiquated energy infrastructure, which limits the ability of businesses to grow and employ.

I will explain what I mean by antiquated energy infrastructure. In Tyrendarra we have a very productive region; we have businesses like engineering firms and we have dairy businesses milking 1000-plus cows. But the businesses within the region have to work together to understand what each is doing, because if they all fire up at the same time, they actually cannot run their businesses — they cannot milk the cows or turn on all the machines in the engineering firm, which is the neighbour of one business I am referring to, at the same time. How can that be the most productive way forward for those businesses? It is not.

A business run and owned by Bruce Knowles has actually invested in its own diesel generators, because getting three-phase power is just not possible for him. The government needs to grow the state’s economy and understand the benefits that my area in particular brings to the state through revenue, but clearly they do not understand that if they do not understand that we need basic three-phase power, which you see in most or all countries of the world — even Third World countries have much more power reliability than we are seeing in south-west Victoria.

Labor has absolutely no understanding of regional Victoria and what makes it tick. They cannot see past Geelong, Ballarat or Bendigo. Places like Warrnambool and Portland are forgotten about, as is the enormous potential we have for growth in south-west Victoria to ease the pressure on the city and evenly spread the population across this state. It is a squandered opportunity.

South-west Victoria is the most productive agricultural region in Victoria and the second most productive in the nation, and that is Australian Bureau of Statistics qualified data. That is not me making anything up — those are actual facts, and we know it. We are working hard under very extreme circumstances that reduce our productivity. We have farms, food processors and manufacturing plants. Agriculture provides 60 per cent of the region’s income and one in five jobs. We have a broad spectrum of agricultural industries, such as red meat — beef and sheep — abalone, wool, dairy and forestry, and dairy manufacturing as well. We also have niche food industries and strong links to the food and tourism sector, so it is a really innovative part of the state as well. My region does punch well above its weight in terms of its contribution to the state economy, yet it is forgotten about by this Labor government.

Increasing the duty exemption threshold for young farmers is one way — and just one way — to encourage young people into the agricultural industry. During my time representing farmers in my role as vice-president of the United Dairyfarmers of Victoria and in my roles with the Victorian Farmers Federation and Australian Dairy Farmers we spoke a lot about how it needs to be at least in line with the first home owner grant.

That is good, but as the member for Eildon pointed out, you cannot buy a farm and make a living for $750 000. It is all relative. Whether, as the member said, you are out in the west where land is cheaper or where you can put more ‘DSE’ per hectare, which is dry sheep equivalent, which measures how many animals or whatever you can grow per acre — it is just a term we use in agriculture — it is all relative to the cost of the land, and $750 000 is not going to buy a young farmer a productive piece of land to make a living on. He is going to be off farm working, she is going to be off farm working, and the family are not going to be able to survive on agriculture alone at that level.

That is my point about understanding regional Victoria. There is so much more that can be done to unlock billions of dollars of untapped productivity for existing and well-established farmers. The Great South Coast food and fibre plan was endorsed by the Labor government last year in the budget with a $500 000 rollout to this comprehensive plan, which I spent a number of years prior to coming to this place helping to build, which aims to lift the image of the food and fibre sector, encourage young people to take up a job in the sector and unlock the issues that are holding back the region. So it was a regional approach to finding regional solutions to really get the benefit from. They have not received the money yet, so they have been paying an executive officer for 12 months. They have worked on the power business case that I have been talking about. They have also been working on the water issue.

They have done all the economic modelling to show that we can unlock water without any environmental effects and without any challenges to the environment. We have been caught up in the Murray-Darling Basin challenge, but we have got underground water there that is already allocated by hydrological reports that show it is not overused — and it is not actually used. We have sleeper licences, as they are called, for people who do not actually use the water. If we unlock even 10 per cent of that, which would have no environmental effect — there is none, and it is actually a benefit — we would get a $55 million boost to the regional economy just by being able to pull that water out of the ground that is already allowed to be pulled out, put it onto pasture and turn it into fodder to produce more milk per hectare. The only thing standing in the way is the bureaucracy. The legislation even allows it; it is the department that is really just not playing ball. The committee has met with the minister over and over again, who has led them up a garden path. Here is this opportunity; they have got $500 000 they cannot get access to, they are paying a CEO that they have no money to pay because the promised money has not been delivered, and they are not able to do the work they need to do, yet the opportunity abounds. Remember this is a government that says it is a strong supporter of the agriculture industry, yet when push comes to shove it does nothing that will actually support farmers and help drive economic activity.

I will not sit here and listen to the Labor government tell me how they are champions for regional Victoria, because it is not true. In the eyes of those opposite, regional Victoria is Geelong, Ballarat and Bendigo. They have zero understanding or respect for the enormous economic contribution our agriculture sector makes to the state’s economy, but they are more than happy to take the proceeds and spend them on projects to make life in the city easier. If you are serious about regional Victoria, start addressing the lack of infrastructure, start listening to the people who know what they are talking about and make sensible changes to rules.