Mr D O’BRIEN (Gippsland South) (12:39): It is nice to get up and speak a few facts, unlike the historical revisionism we have just heard from the member for Bentleigh. The member for Bentleigh seems to have missed the point that it was his Premier and his still Treasurer who promised in 2014 that they would not increase or introduce new taxes. Do not sit there and say that we should all agree that taxation should not change. This was your promise, your government’s promise, that we would not increase, or introduce any new, taxes.
I would like to go back. I know my colleagues the member for Narre Warren North, the member for Pascoe Vale and the member for Mordialloc—I nearly said Sandringham, my apologies; they are brothers with their electorates next door—will be sick of me talking about the Public Accounts and Estimates Committee, but I do want to go back to that. On this promise we asked the Treasurer at PAEC about his promise not to introduce any new or increased taxes, and he said, ‘I did not say that in 2014’. But in fact the record shows different, because on Channel 7 news just before the election we had a clip of the Treasurer saying, ‘We will not introduce any new taxes or increase any taxes to pay for our election promises’. That was in 2014, and we all know and have all heard repeated the Premier’s promise from the night before the election when he gave Peter Mitchell on Channel 7 news the exact same promise.
The member for Bentleigh needs to understand that our criticism is of the government’s broken promise. There are 41 new or increased taxes. The rubbish he just went through a moment ago saying that we were double counting—when you increase a tax in 2019–20, in 2016–17 and in 2015–16, that is three increases, so that gets counted as an increase each time. He completely fails to understand that concept. Each of those adds to the tax burden on Victorians. The government stands condemned for breaking that promise. I am not going to stand here and say that tax will not change over time; of course it does. However, the Leader of the Opposition and the Shadow Treasurer have made that guarantee that we will not increase taxes if we are elected in November this year. I think it is in stark contrast, what the government has said and what the government has done.
This legislation is an election year piece of legislation. We have seen, as I have outlined, over the years, the government increase taxes just about every budget through its state taxation and treasury legislation bills. But 2022 is an election year, and obviously the government wants to make itself more attractive to the Victorian public, so predominantly there are minor changes at the edges and some changes to existing increased or introduced taxes, including the windfalls gains tax amendment. I just want to touch on that one briefly, because I note that of the 42 new or increased taxes about 21 of them are on property. I heard the member for Bentleigh say how proud he is of the windfall gains tax, and it is classic with those on that side of politics that they do not understand economics. If you tax something, you almost invariably increase the cost of it. That is what the GST did, and that is what the windfall gains tax will do. That is what the government’s proposed 1.75 per cent levy on property developments would have done and will do. No doubt, if this government is re-elected, it will reintroduce that proposal to add to the cost of housing. At a time when housing availability and affordability are such significant issues in our community, it beggars belief that the government would introduce or increase 21 new or increased property taxes and then be surprised that housing affordability has become a problem. It is just astounding. The government needs to understand what actually happens when you add additional taxes, particularly to an existing fairly hot market. It is going to have that impact of sending prices high, making it more difficult for Victorian families to afford a home.
I want to just go to some of the data that is there in the taxation estimates in the state budget. I absolutely understand that taxation from a state perspective is a very difficult issue. We have a very difficult problem in Australia where we have a vertical fiscal imbalance between the commonwealth and the states, where the states do the bulk of the service delivery but it is the commonwealth that has had the major revenue-raising capacity since the Second World War, when the commonwealth took on the main role of income tax collection. It does make it difficult for state governments to deliver what they need to do.
I will just make a couple of comments on the government’s figures this year for some of the main state taxes that we have—largely payroll tax, land tax and land transfer duty, otherwise known as stamp duty. This year budget paper 5, page 18, shows that land transfer duty is expected to be $8.2 billion. If you go back to the previous budget before the government came to power, land transfer duty was estimated at $4.4 billion. That is an increase of 85 per cent in land transfer duty that the government has had over that time. Land tax this year is estimated at $4.8 billion; in the budget before the government came to power it was $1.9 billion—that is a 154 per cent increase in land tax in that time. Finally, payroll tax is $6.8 billion. We heard the wonderful comments from the member for Bentleigh about how payroll tax is being reduced. Well, the quantum is still going up—$6.8 billion versus $5.1 billion in 2014–15, or a 32.7 per cent increase.
Now, of course all those taxes are going to go up if the economy is growing, particularly if the property market is growing, but it is just an interesting comparison of how much extra revenue the state has been able to reap under this government. You can look at it overall. Total taxation has gone up by $12.4 billion—state taxation—since the government came to power, an increase of 68 per cent. And that is versus an increase in expenditure of 74 per cent. That has gone up from $51.75 billion before the government came to office. This year the total expenditure from transactions was $89.8 billion, so a 74 per cent increase. That is clearly why we have got a budget deficit, where there is a 74 per cent increase over the last eight years versus a 68 per cent increase in actual income—state taxation income, of course, I am talking about here.
This issue remains a significant problem. I note there has been some recent discussion about horizontal fiscal equalisation, particularly from the Premier of WA. We are on a unity ticket on that issue—that Victoria is not getting what it should—but I note that both the former federal Treasurer and the current federal Treasurer have no intention of changing that. I do not agree with the Western Australian Premier saying perhaps we should not have gone for the money on the Commonwealth Games, but I do agree that perhaps the Victorian government should look at managing its finances better. If we had not wasted $28 billion on infrastructure cost blowouts, our budget situation and indeed our ability to fix the health system, to fix the 000 system and to fix the ambulance system would be a lot better off.
Just finally, we are not opposing this legislation. However, there are a couple of things that we are looking at—in particular clause 34, which relates to the discretion of the commissioner of state revenue putting effectively a time limit on whether or not he or she accepts an objection to a tax ruling made within five years. That is a little bit of a concern. We have sought some advice from the government as to the number of cases that might be involved or might be curtailed by the introduction of this five-year statute of limitations, if you would like to call it that, so we will consider that between now and the time that this legislation passes to the upper house. But we are not opposing this particular legislation. I note that this is an election year tax bill without any of the tax increases that we have seen but a reminder of the broken promise that the government made not to introduce or increase taxes in 2014, a promise that it has failed to meet, with 41 new or increased taxes since then.