2015-06-23
Mr BARBER (Northern Metropolitan) — I would also ask that my amendments be circulated. I just need to make a short explanation. I stated during the second-reading debate that the Greens would be voting against the clause. However, we will be voting against one of the subclauses within the same two clauses that we will be dealing with. I apologise that we are now having to bring in an amendment that shows exactly what I meant, which is now being circulated, and I think I did inform the crossbenchers that I would be voting against the clause. In fact it is the subclause. I certainly do not mean any disrespect to the house by now coming in with a written amendment. Members will have noticed that I have now taken to wearing the glasses that have been in my bottom drawer for a couple of years. It is for that reason that I have in fact drafted an amendment, the broad intention of which is to remove new section 3E from clause 15 and also a new section which is to be inserted by clause 26.
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Mr BARBER (Northern Metropolitan) — I have a question for the minister. With respect to the guidelines the minister referred to that are now the subject of Mr Rich-Phillips's amendments, is it not the case that these guidelines carry no legal weight?
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Mr BARBER (Northern Metropolitan) — I presume what the minister's answer means — to just tease it out a little bit more — is that under the way the bill before us is currently presented the guidelines would have no legal weight, but if his amendment was to be successful, then the guidelines would have legal weight?
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Mr BARBER (Northern Metropolitan) — The minister said that they would carry weight of law. My question is: is that the case under the current bill and/or is that the case if Mr Jennings's amendment is successful? Two possible different circumstances.
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Mr BARBER (Northern Metropolitan) — Thank you for that answer. This also relates to proposed section 3E, which is the one I will be trying to remove through my amendment 1, so I would just like to ask a question about the operation of section 3E as it relates to sections 3A, 3B, 3C and 3D. Proposed section 3E says that despite sections 3A, 3B, 3C and 3D, the Treasurer can still make a finding that a person does not have a controlling interest in a foreign corporation or trust estate, and that then leads to tax exemption. Also in section 3E the Treasurer is given some further guidance as to the criteria under which they might form that view; for example, at proposed subsection (2)(a)(i) the Treasurer may consider, in the case of a person who has a controlling interest in a foreign corporation, the nature and degree of ownership and control the person has in the corporation.
The Treasurer would be looking at that consideration, but at the same time in earlier sections — for example, in new section 3A(1)(a) there is the criterion that says:
is in a position to control more than 50% of the voting power in the corporation …
So the Treasurer is given one consideration, which is that the person is in a position to control more than 50 per cent of the voting power in the corporation but then is given a second — and, I would argue, contradictory — decision to make, which is:
the nature and degree of ownership and control the person has in the corporation …
which must inevitably be with reference to the earlier 50 per cent criterion. Alternatively the 50 per cent criterion is not worth anything because the Treasurer is able to simply make up some other number that measures the nature and degree of ownership and control a person has in the corporation. That makes new sections 3A, 3B, 3C and 3D — or at least certain parts of them — irrelevant, redundant and possibly contradictory, and the guidelines will not be any help because they can only be based within the statute itself. Under these circumstances can the minister explain which of the two criteria — that is, either new section 3E(2)(a)(i) or new section 3A(1)(a) — will dominate?
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Mr BARBER (Northern Metropolitan) — Yes, I am well aware that not all these structures will consist of simply a voting of ordinary shares. I hope the minister is not distracted. There could be non-voting shares, and there could be other sorts of hybrid instruments that do or do not attract voting rights. Whether that relates to control is another matter. But my simple point is that effectively the Treasurer gets to choose which definition the Treasurer likes. It can either be:
is in a position to control more than 50% of the voting power in the corporation …
or it can be some other criterion that the Treasurer decides in the latter section — the one I am trying to get rid of — goes to:
the nature and degree of ownership and control the person has in the corporation …
I think the minister's last answer basically said that, from the two definitions, the Treasurer gets to choose the one that suits his purpose.
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Mr BARBER (Northern Metropolitan) — I do not think that is really an answer to the original point I was driving at, which is: does the Treasurer get to choose which of the two definitions he likes? I will just say that when the minister introduced the government amendments he said that this was about, in his words, 'perception', and he later said that the reason for giving the possibility of delegation to the tax commissioner was to avoid any suggestion that the Treasurer might act arbitrarily. The minister introduced the word 'arbitrarily' into the debate — —
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Mr BARBER — He generously introduced it into the debate, and he now regrets his generosity. It is that arbitrary nature that I am trying to tease out here. It seems that there are in fact two definitions of 'control', one of which is 50 per cent and the other one is whatever the Treasurer thinks it is — the nature and degree of ownership and control the person has in the corporation. There is the 50 per cent and then there is the not 50 per cent. There is some other percentage, some other nature or some other degree. Then there is the Treasurer, who says, 'Hang on. I've had enough of this. I'm out of here. I going to hand the whole problem over to the commissioner'.
With the developments we have seen here tonight, the government has been a little bit caught out. It has realised that Mr Rich-Phillips's amendment, which the Greens are going to support, will require the Treasurer to report on all these decisions. So the government has come in here and said, 'Having thought about it, there are some decisions we would rather not be seen to be making, so we will give ourselves the option' — the ability but not the requirement — 'to delegate this to the commissioner'.
Names like Mirvac and Australand were brought in during the — —
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Mr BARBER — AV Jennings was also mentioned. Names like those were brought in during Mr Morris's inquiry, which is now proving most valuable to the chamber in terms of our consideration. I am starting to wonder whether the government already knows which one of those corporations is going to want an exemption or which one it thinks should be granted an exemption. In the past the government has received donations from property developers, and we do not yet know the donations that were made in the run-up to the last election because they have not yet been disclosed.
The government is aware that if Mr Rich-Phillips's amendment passes, there will be a very simple connect-the-dots exercise between the property developers that have supported this government and the exemptions worth many millions of dollars they will receive under this act — that is, if the amendments in this bill enter the act. It is for that reason that the Greens intend to persist with our amendment, the aim of which is to take out the Treasurer's exemption and to remove any perception — which is the word the minister used — that arbitrary decisions will be made by a politician.
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Mr BARBER (Northern Metropolitan) — I thank the minister for taking the time to read that screed into Hansard because it is an absolutely extraordinary list of considerations that the Treasurer may or may not take into account.
Let us go back to the beginning. According to the government the purpose of this bill is to tax foreigners because foreigners are not paying enough tax. But amongst the many criteria that I just heard from the minister was whether or not these foreigners have good corporate governance practices or not, and this is to be one of many extra matters that a Treasurer may or may not consider in deciding whether or not those foreigners should pay tax.
It is no longer just about taxing foreigners because foreigners are not paying enough tax. Apparently there are different classes, good foreigners and bad foreigners, some of whom have good corporate governance practices, some of whom do not, some of whom are building a lot of houses — to paraphrase one of the criteria — and some of whom are not. All of that is to be loaded on top of this decision as to whether they should pay tax at the time of a stamp duty transaction.
I do not know what to make of all the extra matters that have been loaded on top, but when we listened to those specific guidelines that relate directly to provisions in the bill, particularly proposed subparagraphs (i), (ii), (iii) and (iv) in proposed section 3E(2)(a), they did not provide any further yardsticks. It is all to do with the degree of control, which the Treasurer is still left to make a call on. It is all about different degrees, but there is no yardstick for them. In earlier sections of the bill which I am not seeking to change, there are very clear degrees of ownership, like 50 per cent. I think I am even more concerned now than when I started, and for that reason I maintain the intention to move my amendments.
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Mr BARBER (Northern Metropolitan) — I move:
2. Suggested amendment to the Legislative Assembly —
Clause 15, page 21, line 24, omit “estate.” and insert “estate.”.”.
3. Suggested amendment to the Legislative Assembly —
Clause 15, page 21, lines 25 to 34, page 22, lines 1 to 36 and page 23, lines 1 to 9, omit all words and expressions on these lines.
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Mr BARBER (Northern Metropolitan) — I presume my suggested amendment 4 is a test. Although this section is constructed slightly differently and now relates to land tax rather than stamp duty, the issues are fundamentally the same. They go to the issue of the Treasurer's discretion, and therefore I have moved another suggested amendment aiming to do the same thing as occurred with the earlier clause.
Clause 15, page 21, lines 25 to 34, page 22, lines 1 to 36 and page 23, lines 1 to 9, omit all words and expressions on these lines.
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Mr BARBER (Northern Metropolitan) — I move:
5. Suggested amendment to the Legislative Assembly —
Clause 26, page 30, line 16, omit “corporation.” And insert “corporation.”.”.
6. Suggested amendment to the Legislative Assembly —
Clause 26, page 30, lines 17 to 35 and page 31, lines 1 to 13, omit all words and expressions on these lines.