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| Madam Speaker, I move the bill be now read a second time. The bill puts in place a package of measures announced as part of Budget 2001-11 by proposing amendments to the Stamp Duty Act, Taxation Administration Act, First Home Owner Grant Act, Mineral Royalty Act and Victims of Crime Assistance Act. Most of the key proposals in the bill focus on the government’s commitment to a balanced housing market across all market segments. This is a priority in the Territory 2030 strategic plan. In keeping with this priority, the bill proposes to improve housing affordability in the Territory by increasing the stamp duty first homeowner concession, increasing the principal place of residence rebate, and introducing a stamp duty concession for senior citizens, veterans, pensioners, and carers. To further assist homebuyers, the government proposes to again increase the stamp duty first homeowner concession and principal place of residence rebate. Members will recall that, since coming into office, the government has reformed and introduced a range of stamp duty-related home ownership concession schemes including the first homeowner concession and the principal place of residence rebate. The government has consistently reviewed and increased these concessions to ensure they suit the Territory’s housing market. In keeping with this, the first homeowner concession will increase from the first $385 000 of a property’s value to the first $540 000 of a property’s value. This will result in the maximum concession for first homebuyers being $26 730, which is an increase of about 70% or over $11 000. Increasing the first homeowner concession will ensure the stamp duty will not impede home ownership for most first homebuyers. Furthermore, setting the concession at the first $540 000 of a property’s value will ensure the cost of stamp duty does not lock first homebuyers out of the housing market. The principal place of residence rebate will also be increased by 40% from a maximum of $2500 to a maximum of $3500. This will assist other Territorians buying a home which is to be used as their principal place of residence. This means these homebuyers will pay no stamp duty on approximately the first $143 330 of their home’s value. This is a significant increase from the previous $111 850. In keeping with another action in the Territory 2030 strategic plan to provide financial relief to retirees moving into retirement accommodation, the government also proposes to introduce a new stamp duty home ownership concession of $8500 for senior citizens, pensioners, veterans and carers. The new concession recognises the valuable contribution seniors and carers have made, and will continue to make, to the Territory. It also promotes the Territory as a place for seniors to retire and assists them in transitioning from a larger family home to a more suitable accommodation. This may assist in increasing the supply of established family homes to contribute to housing affordability. Homebuyers will be eligible for this new concession if they are at least 60 years of age or are a holder of a Northern Territory Pensioner and Carer Concession Card. Other eligibility criteria will be similar to those existing for the Territory’s other stamp duty home ownership concessions. It is proposed these changes apply to instruments executed on or after 4 May 2010. Purchases secured prior to that date, either by contract or option, will not be eligible for the new or increased concessions. It is expected that homebuyers in the Territory will save $5.4m in 2010-11 from the increase to the first homeowner concession and principal place of residence rebate from the new senior pensioner and carer concession. As part of the government’s push to promote home ownership among Aboriginal people, the bill also extends the first homeowner grant and the stamp duty home ownership incentive schemes to eligible Aboriginal people who acquire land or homes pursuant to long term leases granted under the Commonwealth Aboriginal Land Rights (Northern Territory) Act 1976. This proposal will also commence from 1 May 2010 and supports measures that are designed to address the large disparity in home ownership rates between Indigenous and non-Indigenous Territorians. The bill also seeks to introduce a stamp duty exemption for the establishment of and the transfer of property to a special disability trust when no consideration is provided. Special disability trusts were introduced by the Commonwealth to assist relatives of disabled persons to engage in succession planning for the benefit of the disabled person. This assistance is provided through concessional means testing and tax treatment to assets held in such trusts. The proposed exemption seeks to encourage the use of these trusts from 1 July 2010. Madam Speaker, the bill also seeks to address a restriction of the stamp duty home owner concessions concerning persons who are building a home. Currently, a home must be occupied within the earlier of 12 months of a home being built, or three years from the date the land is purchased. The bill proposes that the maximum three year time in which to build be increased to five years, starting from when the person becomes entitled to possession of the vacant land. For persons purchasing a home off the plan, the three year time frame to build will be removed, however, there will be a requirement to occupy the home within 12 months from when the conveyee becomes entitled to possession of it. Although this change will commence from 1 July 2020, the extended five year period will be available to people who have missed out on a stamp duty concession because of the current requirement to have a home built within three years. I now turn to another key measure of the bill. The bill proposes to increase the mineral royalty rate from 18% to 20% of the nett value of a mine’s production. This change in the rate, which is the first since the Mineral Royalty Act commenced in 1982, is effective from 1 July 2010. The new rate gives an increased community return from non-renewable resources that are owned by the Territory. The rate increases the strength from the contribution of the mining industry to the long-term welfare of the Territory and our community. This follows similar recent royalty increases in New South Wales and Queensland to increase their return from coal mining in those states. However, importantly, unlike other states who predominately use output-based royalty schemes, the Territory imposes royalty on a mine’s profit ability. This means Territory mines only contribute royalty when they are able to derive a profit. At a royalty rate of 20%, this contribution is still considered to be a fare share of profits derived from the Territory’s minerals. Although it is difficult to compare output-based royalties with profit-based royalties on a year to year basis, on a long term or a life of mine basis, the new 20% rate compares to the mid-range of the output royalty rates imposed in Western Australia, Queensland and South Australia, being the main mineral producing Australian states. In this regard, this increase is not expected to disadvantage the Territory in being considered for future resource projects. This measure is expected to increase revenue by about $9.2m in 2010-11. This is because the first six-monthly payment received in 2010-11 relates to the period of 1 January to 30 June 2010 when the rate of 18% applies. The increased revenue is expected to be $14.8m in 2011-12, reflecting the full year effect on revenue. These numbers are based on miner’s estimates, where possible, of commodity prices and mining production, as well as global demand for commodities and the value of the Australian dollar. In recent times, these factors have been shown to have a highly variable impact on a mine’s profit ability and the royalty it pays to the Territory. Madam Speaker, this bill also proposes several measures to strengthen the integrity of the Territory stamp duty legislation. This will reduce the risk of the legislation being exploited and the payment of stamp duty avoided. Unless otherwise indicated, it is proposed that these measures commence from 4 May 2010. The first measure seeks to clarify that stamp duty remains payable on the grant of a lease where valuable consideration in addition to rent is provided. This measure addresses an avoidance scheme which is the subject of a Supreme Court of New South Wales decision. The court there decided that consideration given for an option to grant a lease was technically not dutiable. Second, the bill introduces changes to landholder stamp duty so that the concept of an acquisition includes an interest acquired as part of an arrangement for the provision of finance. However, there will be no duty on the acquisition if the Commissioner is satisfied that the acquisition is solely for financing purposes. The proposed amendment will require duty to be paid unless the interest is returned to the person who is obtaining the finance or otherwise disposed of pursuant to a mortgagee’s power of sale within five years. A longer period may be approved by the Commissioner. The measure is based on similar provisions in New South Wales, Victoria, the ACT and Tasmania. This closes an opportunity to mask otherwise taxable acquisitions as financing arrangements to avoid the payment of duty. The last of these integrity measures seeks to clearly set out when an interest in a landholding corporation is acquired and ensure that the timing of an acquisition cannot be deferred to avoid stamp duty. It is proposed that the time when an interest will be taken to be acquired be the earlier of: the date that the transfer documents are delivered to the person acquiring the interest, the date that consideration for the interest is provided, and the date that the name of the person acquiring the interest is entered into the register of members of the corporation. This measure is to commence on 1 July 2010. I now turn to a number of other measures in the bill which also commence on 1 July 2010. These measures are aimed at making the Territory stamp duty legislation more efficient. The Commissioner of Territory Revenue can currently create and assess duty on a memorandum where taxpayers fail to lodge a dutiable instrument for assessment. The bill seeks to clarify that a memorandum can also be created where it is impossible or impractical for an instrument to be lodged for a reassessment. This measure also clarifies the circumstances when a memorandum may be created in relation to the registration of a motor vehicle. The bill also proposes to broaden the concept of a family trust for the purposes of the substituted purchaser concession by allowing a family trust to have a family company as a beneficiary. The substituted purchaser provisions were introduced in 2009 and allow a purchaser to nominate a related person, prior to settlement, to receive the property being purchased without double stamp duty consequences; providing a sub-sale of the property has not occurred. The last of these efficiency measures ensures that where land is granted by the Territory, stamp duty can be assessed on the value of the land when all or part of the monetary consideration that passes is unascertained at the time of the grant. This measure is in response to profit sharing arrangements involving the grant of Crown land. The bill also proposes two minor amendments to the Taxation Administration Act. The bill clarifies that, despite their appeal, the former payroll tax and stamp duty legislation, as well as the former taxation administration legislation, continues to be taxation laws under the Taxation Administration Act. The bill also ensures that the Commissioner can allocate payments from taxpayers in the order of interest, penalty tax and primary tax. The bill also amends the Victims of Crime Assistance Act. The purpose of this is to amend Section 61(6) of the Victims of Crime Assistance Act so that the levy on infringement notices is increased from $10 to $20. The victims levy is collected to offset the cost of delivering financial assistance to victims of crime in the Northern Territory. This levy has been in place since 1990 under Appeal Crimes Victims Assistance Act, and was last increased in November of 2002. The victims levy is paid into the victims’ assistant fund established under Section 60 of the Victims of Crime Assistance Act. Of the two sources of funding for the victims levy, infringement notices and court imposed levies for offences, the increase only relates to the levy on infringement notices, for example, red light cameras, mobile cameras, speeding and other traffic offences and their enforcement. Currently, the levy is $10 for each infringement notice or enforcement order. The proposed amendment of Section 61(6) of the Victims of Crime Assistance Act will increase that levy from $10 to $20. This increase is to take effect from 1 July 2010 in relation to offences committed on or after that date. The increase is to ensure a clearly defined funding base to manage the ongoing costs of financial and other assistance to victims of crime. A review of the first three years of operation of the Victims of Crime Assistance Act is due to be conducted this year. Madam Speaker, I commend the bill to honourable members and I table a copy of the explanatory statement to accompany the Bill. Debate adjourned. |