STATUTES AMENDMENT AND REPEAL (BUDGET MEASURES) BILL 2018


The 2018-19 budget delivers on the government's election commitment to grow jobs, including through tax relief, improve services and invest in our future. It also recognises the need to make a range of savings and reforms to government services to address the financial position left by the former government, and ensure the state's finances are sustainable going forward. This bill contains measures relating to the government's 2018-19 budget.

It is proposed to consolidate the gambling regulatory regime in South Australia, removing the unnecessary regulatory burden on industry. The Independent Gambling Authority (IGA) will be consolidated within Consumer and Business Services, which will perform the regulatory functions of the IGA. The Liquor and Gambling Commissioner, through Consumer and Business Services, will become the sole regulator and assume the operational enforcement responsibilities currently undertaken by the IGA.

The IGA Act, Authorised Betting Operations Act, Casino Act, Gaming Machines Act, Intervention Orders (Prevention of Abuse) Act, Liquor Licensing Act, Problem Gambling Family Protection Orders Act, Racing (Proprietary Business Licensing) Act and State Lotteries Act will be amended to remove the reference to the IGA and replace it with a reference to the Liquor and Gambling Commissioner.

The consolidation of operations into a single regulator is consistent with the recommendations of the Administrative Review of Gambling Regulation in South Australia by the Hon. Tim Anderson QC, which was initiated by the former government. The review determined that the simplest and most effective way of regulating commercial gambling in South Australia would be through a single regulator rather than the current confusing and competing duopoly.

It is proposed that the transfer of the IGA's existing powers and functions to the Liquor and Gambling Commissioner will take effect from 1 December 2018. The abolition of the IGA and the transfer of its functions to the Consumer and Business Services is expected to provide savings of approximately $483,000 (indexed) per annum from 2019-20.

The 2018-19 budget includes additional revenue of $3.16 million per annum (indexed) from 2019-20 from an increase in annual liquor licensing fees. The review of the South Australian Liquor Licensing Act by the Hon. Tim Anderson QC recommended increases in all annual liquor fees. The revised fee structure included in the budget reflects lower increases generally, with smaller increases for single-venue licensees and regional venues.

To effect this, Consumer and Business Services has developed a fee structure that provides discounts for certain licence holders within licence categories. A minor amendment is therefore proposed to the Liquor Licensing Act to clarify the extent of the regulation-making power in that act relating to fees, to make it clear that the discounted fees can be set by regulation.

This bill removes the royalty concession on new mines from 1 July 2020. The new mine concession was introduced in the Mining Act in January 2006. The 2 per cent new mine royalty rate provides a concession of 60 per cent compared to the applicable mineral royalty rate in South Australia of 5 per cent for ores and concentrates, and a 43 per cent concession compared to the 3.5 per cent royalty for refined metals or industrial minerals. Since its inception, a number of new mines have benefited from the reduced royalty rate. However, a number of marginal mines have received the new mine rate, with the mine closing shortly after the expiry of the five-year new mine rate royalty period.

To help with mine project planning, this bill provides fair and reasonable transitional arrangements. Any new mine approved prior to 1 July 2020 will continue to be eligible for the new mine rate concession up to five years after 1 July 2020 or 30 June 2026, whichever comes first. South Australia will continue to remain one of the most competitive jurisdictions in Australia to undertake mining activities.

The bill amends the Local Government Act so that, from 1 July 2019, the 52¢ per tonne royalty on extractive minerals recovered from council borrow pits will be abolished. This measure delivers on the government's election promise to remove the initiative introduced in July 2015 by the previous government. The government's removal of this royalty will help to reduce the financial and administrative burden on councils, particularly regional councils, when delivering and maintaining local roads for the benefit and safety of their communities.

The previous arrangement provided that a component of the royalty would be paid to the Local Government Association Research and Development Scheme. This will cease upon the royalties no longer being paid by councils. The measure will reduce revenue by over $1 million per annum, with a net budget deterioration of $231,000 per annum.

Consistent with our election commitment, the government will close the Office of the Commissioner for Kangaroo Island. As a result, the Commissioner for Kangaroo Island Act will be repealed. Kangaroo Island is an important South Australian region, and we will ensure our resources are directed to support the island's economic growth and community services rather than supporting unnecessary bureaucracy.

The Stamp Duties Act 1923 will be amended to expand the current stamp duty exemption for family farm transfers to include those involving companies. Stamp duty is an impediment to family farm transfers involving companies, and we are therefore amending the Stamp Duties Act to ensure all genuine transfers of family farms are treated similarly and are exempt from stamp duty. This exemption is subject to all other criteria regarding family farm transfers being met, including that the land to which the transfer relates is used wholly or mainly for the business of primary production land and is not less than 0.8 hectares in area, that the sole or principal business of the transferral is the business for the primary production and that a business relationship has existed between the parties for a period of more than 12 months immediately before the relevant transfer.

The bill also includes an amendment to provide a stamp duty exemption on premiums paid in relation to multi-peril crop insurance policies entered into from 1 January 2018. Multi-peril crop insurance policies provide cover for crop loss resulting from a range of perils, including fire, frost, hail and drought. This exemption will reduce the cost to South Australian farmers who take out multi-peril crop insurance to manage risks and give them the confidence to plant more crops and target higher yields with the reassurance that they can be financially protected for their input costs in the event of a peril. It is estimated that this exemption will provide a benefit to around 100 insurance policies each year. These amendments commence retrospectively from 1 January 2018.

In addition, this bill also makes a number of minor amendments to the Stamp Duties Act to facilitate the collection of data as part of the commonwealth government's initiatives on third-party reporting and the national register of foreign ownership of land titles. Amendments to the Taxation Administration Act are also included in the bill to provide the Commissioner of State Taxation with the ability to collect and disclose the information required by the commonwealth government.

The budget bill includes amendments to give effect to our election commitment to provide land tax relief. The tax-free threshold will be increased, and we are introducing a new tax bracket and marginal tax rate from 1 July 2020. The tax-free threshold for land tax in 2020-21 will be $450,000, compared with the current level of $369,000. The top marginal tax rate will also be reduced from 3.7 per cent to 2.9 per cent for holdings currently valued at $1.2 million up to $5 million. The top threshold will become $5 million in 2020-21, with an associated marginal tax rate of 3.7 per cent for land tax ownerships over this amount. All other marginal tax rates remain the same. This measure is estimated to benefit over 50,000 land tax ownerships, including around $8,000 or no longer have a land tax liability.

Land tax thresholds will continue to be indexed up to and after these changes in line with average increases in site values as determined by the Valuer-General to limit the impact of bracket creep. The bill makes two technical amendments to the Payroll Tax Act 2009. The first amendment reinstates the policy intent on the introduction of the owner-driver exemption within the contract of provisions prior to the adverse decision in the New South Wales Supreme Court in the decision of Smith's Snackfood Company Ltd v Chief Commissioner of State Revenue (NSW) [2012] NSWSC 998.

In that matter, the court concluded that the owner-driver exemption provision can be apportioned into taxable and non-taxable services. The contracted provisions were not intended to apply to allow services provided under a contract to be apportioned between exempt and taxable services. They are intended to operate on the basis that the contract is either fully exempt because it falls within the relevant exemption or it is taxable because it does not fall within the relevant exemption.

The second amendment is required to reflect changes to income tax legislation relating to the exempt rate for motor vehicle allowances. The amendments reflect the fact that the Australian Taxation Office now allows for the use of a standard rate for all motor vehicles, which is 66¢ per kilometre for the 2016-17 income year, rather than being based on the car's engine size. These amendments take effect from 1 July 2016 to coincide with the change at the federal level. Taxpayers are aware of the proposal to backdate these changes, and they have been paying payroll tax in accordance with the proposed amendments.

The Environment Protection Act will be amended to require facilities with underground petroleum storage systems to hold an environmental authorisation. Commencing in 2019-20, this initiative will recover the costs associated with the regulation of issues such as soil vapour, groundwater contamination and odour. Approximately 60 per cent of contaminated sites regulated by the Environment Protection Act are petrol stations and other sites with underground storage tanks for petroleum.

The Real Property Regulations require transacting parties to pay a registration fee for the transfer of land. Unless an exception applies, the registration fee increases on a sliding scale, based on the consideration of the value as assessed under the Stamp Duties Act 1923. Currently, the Real Property Act and the Real Property Regulations only allow the Registrar-General to recalculate registration fees where the assessed value of the transferred land is increased by the Commissioner of State Taxation, pursuant to a reassessment of stamp duty.

The changes in the bill will prevent potential revenue loss for the state and enable the Registrar-General to recalculate registration fees for transferred land, based on the correct value of the land, including on land where stamp duty is not payable. In all cases where fees have initially been paid on a basis that does not accurately reflect the value of the land, the bill will also give the Registrar-General powers to secure a charge against the title for any unpaid registration fees. Currently, while the Registrar-General has the ability to recover any unpaid registration fees as a debt, he does not have the ability to secure the unpaid fees against the title.

The 2018-19 budget delivers on the election commitments of the government, focusing on creating more jobs, providing better services and lowering costs for families. This bill is consistent with the budget's principles to deliver the strong economic reform South Australia needs. I commend this bill to the house and seek leave to insert the explanation of clauses into Hansard without my reading it.