Ms CHARISHMA KALIYANDA (Liverpool) (16:56): Regular revision of our State's taxation laws is integral to ensuring that our State's tax system remains up to date, efficient and fair. That not only strengthens our State's financial health, which is needed to fund our essential public services, but also supports the State's individual and business taxpayers by making it easier to comply. The bill achieves that in various ways, but I focus in particular on key amendments to the Duties Act 1997 and an amendment to the Property Tax (First Home Buyer Choice) Act 2022.
First, the amendments to the Duties Act make changes to reduce revenue leakage while ensuring that existing concessions and exemptions operate fairly. One key amendment to the duty aggregation provisions will reduce revenue leakage. Those provisions enable dutiable transactions that form part of a single arrangement to be aggregated to ensure that duty cannot be minimised through artificially splitting an arrangement into a number of transactions. Currently, the transactions must occur within a 12-month period. But some transactions, such as an option to purchase property exercised more than 12 months after it was granted, may evade aggregation despite clearly being part of the same arrangement. The amendments address that by removing the 12-month requirement. The time frame in which the transactions occur will no longer be a determining factor but can nonetheless remain a relevant factor in the overall test of whether the transactions are part of a single arrangement.
The bill also contains a number of amendments to improve existing duty concessions, but I focus on one: the concessional duty of $500 for transfers of property that occur when a person changes their superannuation fund. Presently, the person must cease being a member of the old fund within 12 months before the transfer and become a member of the new fund within 12 months after the transfer. That prevents the concession applying where a person continues to be a member of both funds and is essentially not changing funds. However, there may be situations where a person is changing funds but is already a member of the new fund before the transfer. For example, the person may have two funds and is consolidating them. To enable the concession to apply as intended, the bill amends the concession to allow it to apply where the person is already a member of the new fund before the transfer. That is just one example of how the bill ensures that our State revenue legislation remains effective and fair.
Secondly, in relation to the Valuation of Land Act amendments, while the First Home Buyer Choice scheme closed to new applicants on 1 July 2023, those already in the scheme will continue to receive an assessment for property tax every year until they sell their property. Any person receiving one of those assessments should have the right to object to anything in the assessment that they believe is wrong, including the land valuation the property tax liability is based on. People receiving a land tax assessment have the right to object to valuations; under the proposed amendment, people with a property tax assessment will have the same right. The amendment to the Valuation of Land Act will give any person who receives a property tax assessment 60 days to object to the valuation used to calculate the amount of property tax they will need to pay.
Furthermore, in relation to phoenix activity, amendments proposed by the bill would make successor entities to liquidated companies liable for payroll tax debts of phoenix companies. It also ensures that the tax is paid to the government, reduces tax avoidance and discourages the liquidation of companies as a means of tax avoidance. It ensures the owners of businesses pay their fair share of tax, which is especially relevant throughout Western Sydney and parts of my electorate of Liverpool given our industrial make-up and given illegal phoenix activity occurs prevalently in construction, labour hire and security industries. In Australia the economic impact of phoenix activity represents a cost of $2.85 billion.
The ASSISTANT SPEAKER (Mr Jason Li): It being 5.00 p.m., debate is interrupted for the public interest debate. I set down resumption of the debate as an order of the day for a later hour.
Ms CHARISHMA KALIYANDA (Liverpool) (10:57): I continue my contribution to debate on the Revenue, Fines and Other Legislation Amendment Bill 2023. As I was saying previously, the bill amends the Payroll Tax Act 2007 to enhance recovery of funds lost through phoenix activity, which would make successor entities to liquidated companies liable for payroll tax debts of phoenix companies. That is important because it ensures that the funds are paid to the Government, reduces tax avoidance and discourages the liquidation of companies as a means of tax avoidance by ensuring that owners of businesses pay their fair share of tax. In the industrial make-up of areas like Liverpool and Greater Western Sydney, phoenix companies are prevalent in industries like construction, labour hire and security. The economic impact of phoenix activity in Australia represents a cost of $2.85 billion to $5.3 billion annually across business, employees and government.
I was contacted recently by a constituent whose family has been rocked after its members became victims of illegal phoenix activity. Not only were they not paid for work done, but they have now spent tens of thousands of dollars in pursuing the matter legally. It has caused a huge amount of psychological, emotional and social harm. Obviously, this harm perpetrated on the victims of illegal phoenix activity extends beyond only financial harm. Its harm is felt across our community by many others.
A further area of change brought forward by the bill is in the Government Sector Finance Act and would enable the review of grace payments made during the COVID-19 pandemic and natural disasters; empower Revenue NSW to investigate eligibility and terms of payments on individuals, such as by requesting documents; and enable Revenue NSW to recover ineligible payments as if they were outstanding tax or by garnishing amounts from bank accounts. Furthermore, the bill enables Revenue NSW to share information about taxes and fines with Service NSW and NSW Treasury, which is currently prohibited. That will be useful for Service NSW assisting with verifying that persons applying—
The DEPUTY SPEAKER (Ms Sonia Hornery): It being 11.00 a.m., debate is interrupted for question time. I set down the resumption of the debate as an order of the day for a later hour.
Ms CHARISHMA KALIYANDA (Liverpool) (12:22): I and many others, I am sure, hope that this is the third and final crack that I have at speaking to the Revenue, Fines and Other Legislation Amendment Bill 2023. The bill ensures that information between Revenue NSW, Service NSW and the Treasury is shared, which will hopefully assist with verifying that persons applying for grants or services are eligible to do so and reduce any loss to the Government from leakage of funds. Revenue NSW and Service NSW are increasingly collaborating to deliver a range of services and programs and an enhanced customer experience for the people of New South Wales. Enabling Revenue NSW to share information with Service NSW will help reduce the risk of fraud and error and enable smoother processing of customer applications. The value of this cannot be underestimated, given the increasing sophistication of fraudulent schemes, scams and other issues in this respect. The amendments will permit tax and fines information to be disclosed to Service NSW, and the Treasury will further assist with revenue forecasting and policy development.
In recent months many would have watched with dismay and disdain the unfolding breaches of confidentiality relating to the Federal Government. The bill also seeks to impose penalties for breaches of confidentiality by consultants. Revenue NSW confidentially consults certain bodies on draft taxation legislation. Most of those bodies have tax experts from the private sector, some of whom are employed by major accounting and law firms. While Revenue NSW is not aware of any confidentiality breaches by any of these bodies that it consults—and, so far, has no reason to suspect any breach has occurred—in light of recent events with PricewaterhouseCoopers it is appropriate for the Government to send a clear message that such behaviour is unacceptable and constitutes a breach of trust that will attract significant penalties.
The bill proposes penalties of $1.109 million for an individual and $5.549 million for a corporation, partnership or association. The Chief Commissioner of State Revenue will be allowed to report any person to any relevant professional body, publish details of the breach and undertake investigations into suspected breaches. This will hopefully go a long way towards restoring public trust and confidence in such work and ensure that trust in government is rebuilt.
Finally, I draw to the attention of members the changes to the work and development order scheme proposed in the bill. A work and development order, or WDO, allows a person to pay off or reduce their fine by doing certain activities, such as unpaid work, courses, counselling or treatment programs. One available WDO activity is undergoing mentoring. Currently, the Fines Act 1996 restricts this activity to persons under 25 years of age, despite 40 per cent of WDO participants being aged 26 to 39. This means mentoring programs for persons 25 years and over cannot be used under a WDO to help them resolve a fine. The bill removes the age limit and allows persons of any age to undertake a mentoring program as a WDO activity.
In my inaugural speech I mentioned that one of my previous professional roles was in headspace, a mental health organisation. In that role, I saw the value of WDO program. It ensured many young people were able to undertake activities that helped them build skills, approach the circumstances of their life from a strengths‑based perspective and build relationships in the service network around them in order to overcome the circumstances that had led them to require a WDO in the first place. On my third and final crack, I commend the bill to the House.
