Legislative Council, Wednesday 2 September 2026
Ms FORREST (Murchison) – Mr President, when I first heard the policy announcement from the government in the 2024 election, I welcomed the initiative in terms of we’ve got a real budgetary problem here, we need to raise revenue and thank God they’re actually looking at a new tax. And it is a tax, let’s face it. I used to argue with one of your former colleagues, Mr President, Mr Aird, about what was a levy and what was the tax. He always told me I was wrong, wrong, wrong until I was actually right. That said, I’ve been looking at some academic papers about what’s tax and what’s a levy, and we’re seeing more and more levies being imposed because it’s seen as a softer approach.
Historically, tax comes with the connotation of being punitive and something that everyone wants to avoid, but a levy is sort of this soft thing over here that we might not notice, until we do. In some of the academic papers I was reading looked at is it a tax or is it a levy and often they could fit into the category of either. Taxes are charged and executed pursuant to a legislative enactment. Well, hello, this is what this is. That is, it’s supported by law and taxpayers receive nothing identifiable like that. It’s a tax on something they’re doing or something they own or to operate a business or whatever it is. Whereas a levy is more paid in return for a specific service, and is often time limited for a particular purpose. For example, we know there will be a flood levy imposed in the aftermath of a flood perhaps, and things like that. So, anyway, I believe it’s a tax, I’ll call it for what it is in my view, and I’m happy with the Leader to correct me if – I know there’ll be people in other parts who’ll disagree, but ultimately this is a tax.
Ms Rattray – Mr President, I might pop out and give a call to the former treasurer Mr Aird.
Ms FORREST – Yes, anyway, to be absolutely honest about this, I still haven’t settled on my position on this bill. I note it passed the House of Assembly by 22 votes to 9. So, it was well supported down there, but we do different work up here, and I have been listening really carefully, and I do appreciate the member for Mersey’s contribution, which did reflect very strong views from the community. I haven’t heard as much directly from my community as you have, but tourism is a really big and important part of my electorate, and some of the issues around farmstays, and some of the other accommodation options can get snared up in this, when when I’m not sure what the intention actually is. That’s been one of the biggest problems with this. What is the intention of this bill?
Ms Thomas – Whatever sounds politically good.
Ms FORREST – Yes, anyway, I’m going to work through some of that and will listen to the rest of the members’ contributions, and particularly the Leader’s response to some of the matters that have been raised because there’ve been some very relevant and pertinent questions raised, I don’t imagine we’ll get through this tonight, so hopefully she’ll have time overnight to pull together a decent amount of responses.
Ms Rattray – Made a start.
Ms FORREST – Yeah, I’m sure you have. You’ve got people working on your behalf, which is great, but there’s probably more questions to come.
Members will be well familiar with my consistent position on the state’s fiscal position. Tasmania’s own-source revenue as a share of total expenditure is at historic lows. Treasury in their fiscal sustainability report of 2026 made it really clear, they also made it really clear we need to pull all three levers, and one of them is raising revenue. So, a big tick for that in a policy sense, not necessarily a practical sense.
Saul Eslake’s independent review and the Commonwealth Grants Commission have all told us, in their own ways, that budget repair requires a mix of measures and expenditure restraint, as well as increased revenue, and that no single class of intervention is sufficient on its own. So, I don’t come to this bill instinctively opposed to a new revenue measure, because that’s not my position. I know that that could well come back and bite me at some stage, and I’m sure it’ll be used by people who seek to misrepresent what I say in these spaces. But that’s the risk I take.
Mr President, my test, as it has been for every fiscal measure that I’ve scrutinised in this place, is whether it’s well designed, whether it’s evidence-based, and whether it’s properly targeted at the problem it purports to solve. While the problem is not clearly defined, is it a revenue raising model, is it supposed to fix our housing crisis? I think neither are true in the full sense of the the purpose, but I’m sure there’ll be more to be said on that.
When you first look at it, the short stay levy bill or tax bill has real attractions, but it also has real contradictions. It has a narrow base. According to the treasurer’s comments, roughly 83 per cent of revenue was expected to come from interstate and international visitors, with a comparatively small share falling on Tasmanians travelling within their own state. How do we know this? There wasn’t any modelling done, so how do we know this? How do we know that to be the case, because that’s not what we heard from the TCIT, when Amy Hills came and briefed us, that’s not what we heard. So, how do we know that? Was it modelled? If that was modelled, why wasn’t the other bits modelled? At a rate of 5 per cent of the total booking fee, that’s fairly modest, and well below the 15-to-20 per cent commissions already charged by major online booking sites, and some travel agency fees. So the practical impact on booking decisions you wouldn’t imagine would be that great and it does follow precedents already set in Victoria and the Australian Capital Territory.
And in fairness, the consultation process during debate in the other place did produce genuine refinements as well as the consultation during the consultation period on the draft bill itself initially but downstairs there were further changes and we also saw the exclusion of accommodation and dwelling also occupied by its owner and the farmstay and agritourism exemption and both of these addressed concerns that were legitimately raised about hosted accommodation and agriculture diversification. I know members from other rural electorates have talked about this as a concern that was loudly expressed.
I also welcome the amendment requiring the government to publish annual data on levy – payers, bookings and revenue by municipality and that’ll be helpful information to have. It would have been good to have some of that information before we started but there you go.
When you look at putting in place a tax, there are a few simple things that should guide that. It should be an efficient tax. It should be simple, noting that no tax law is simple, but it should have a simple application so people know pretty clearly whether they’re obliged to pay that tax or not, and it should be fair. The burden should fall in the right place, so does this pass the test? Perhaps not. Our tax system broadly is not fair, efficient or simple. Often, not just in this but in many other places, the tax burden falls in the wrong place. Stamp duties and many others that I could refer to that don’t fall in the right place. Land tax is picked up by renters. That’s who pays land tax, renters. They often have the least capacity to pay, but they’re the ones who pay it.
Ms O’Connor – Although, to be fair, property owners pay land tax as well.
Ms FORREST – No, they charge it to their tenants, so their tenants pay it.
Ms O’Connor – Not all property owners have tenants –
Ms FORREST – Nah, well, let’s see.
Ms O’Connor – Land tax is a reasonable tax, in my view.
Ms FORREST – It would be if it was a low rate and broadly based. I’m not going to get into tax debate right here and now.
Ms O’Connor – It’s an interesting discussion.
Ms FORREST – Yes. Any new tax we’re introducing should meet the basic principles and on top of that, Mr President, tourism directly and indirectly contributes to around 10.8 per cent of gross state product, and this was talked about by the member for Mersey as well, and supports close to one in six Tasmanian jobs. I note in the East Coast regions more than half the jobs depend on visitor spending.
For us whose role it is to review and not simply endorse, we are entitled to ask why a measure of this scale was not modelled before introduction and how and whether Treasury intends to evaluate its actual impact once it’s implemented, should it be implemented?
The second thing is about the design of the collection base. The member for Mersey read out Expedia’s correspondence. I’m not going to repeat that but it does raise a specific and, in my view, credible technical concern. Liability for levy attaches to booking platform providers to facilitate or arrange bookings while direct bookings are excluded.
Expedia points out that:
A meaningful segment of the sector operates through local online agents who take payment directly from the guests at the time booking, even though their inventory is sourced from larger platforms.
I know the member for Mersey has asked for some clarity around that.
If those arrangements fall on the wrong side of the platform or direct booking distinction, the levy’s base will be even narrower and the revenue thus lower than perhaps the policy intent states. I think this does require further consideration and response from the government to establish whether the liability should attach to whoever collects the payment from the customer at the time of the booking rather than whoever is deemed to be hosting the listing.
I think most people when they’re booking places will have a look around, see what’s available, have a look at the pictures, look at the price, look at the location. I know this is what I do: I’ll go to a booking platform, like Booking.com, Expedia, Stayz or Airbnb, because a lot of properties that are on those platforms also have their own booking platform on their own websites or they have a phone number. So, what I’ll do is find what I like and I’ll ring them up and book directly; so, if that’s the case, I won’t be paying the short stay tax because I’ll know exactly how to avoid it. I tend to do that anyway because I prefer to book directly with the property; I’d prefer to deal with the property and you usually get just as good a rate dealing with the property and you can also discuss with them the risk of parliament being recalled and that you might have to cancel your holiday and things like that when they have a no cancellation policy on their booking platform or website. There’s many people I think who do that and are probably more likely to do that – so, further loss of revenue.
I know that in the briefing, I think it was the member for Huon who actually mentioned, why don’t we just implement a bed tax if we’re going to do that; put it on everyone: low rate, broad base. I don’t know how simple that would be, but it would certainly be more efficient.
Ms O’Connor – I bet you we wouldn’t pass that, though.
Ms FORREST – Sorry?
Ms O’Connor – I’ll bet you we wouldn’t pass that.
Ms FORREST – Who wouldn’t?
Ms O’Connor – The Council. A bed tax on all accommodation.
Ms FORREST – No, I’m just talking about the principle, like a low rate, broad based and it’s much simpler because everyone’s in rather than some in, some out.
Ms O’Connor – We’re struggling with a 5 per cent levy on short stay, we’re not going to support a bed tax.
Ms FORREST – But the point I’m making here is that we’ve got this policy before us in a piece of legislation that had, a bit like some other collection commitments, very little detail to it. Then suddenly we’ve had to bring in something to give effect to the election commitment that hasn’t been modelled, that we don’t really know and that the more we narrow the base of the tax/levy, the less revenue there’ll be. The compliance costs will still be pretty much there, so is it worth the cost of collecting it?
The third and the other point I want to speak to is the purpose to which this revenue is put. I continue to question measures such as the first home buyer grant, as I have significant reservations on this policy. Why am I concerned about that? I mean, I’ve spoken about first home buyer grants before, it is to do with the inflationary impact those mechanisms have. But on this particular question, I say why because the demand side subsidies in a supply constrained housing market inflate prices rather than solving the underlying problem. So, we potentially or could make the problem worse: inflate prices even further.
The second reading speech for the bill is explicit that the primary purpose for this levy/tax is to raise revenue to support first home buyers with any increase in long-term rental supply cost only as a secondary or uncertain possibility. So, we don’t really know what the impact will be. If this new levy simply funds another round of demand-side grants without addressing supply, I have real doubts as to whether it does more than shift revenue collection from one channel to another, while leaving the underlying housing problem unaddressed. I’ll continue to raise that because every time we do something like that, that artificially inflates the price of housing, you make it that bit harder for first home buyers, young people older people sometimes to get into the housing market. In the past, this and former governments have argued against hypothecation of revenue raised. If we used all our revenues wisely, such hypothecation would be unnecessary. I have a fundamental opposition to hypothecation. I think we need to structure a system that works for all and fix the problems that sit underneath a lot of this. This won’t fix the housing crisis. It won’t. I understand the argument for hypothecation in this case, but I don’t think it deals with, or disposes of, the underlying question, which is whether this revenue is best directed to demand site assistance for buyers who are by definition already in a position to purchase, albeit likely into an inflated price market, or to Tasmanians who currently have no accommodation at all? What are our priorities? That’s why hypothecation in this way is problematic.
Fourth, the regional and interstate impact. A constituent with direct experience in the short stay sector wrote to me, pointing out that on the Treasurer’s own 83 17 split and the original $11 million revenue estimate, something in the order of $1.8 2 million a year will be borne by Tasmanians holidaying within their own state. That discretionary regional spending on dining, tours and retail in places like Stanley, Strahan and Queenstown is the most likely category to absorb the adjustment when accommodation costs rise. People might have paid more for their accommodation, so they won’t eat out as much or they won’t have a glass of wine with their meal or they’ll have one course not two, and they won’t go and buy gifts in the shops in town. You have to think of the big picture here. For an electorate where, and I know others are in similar situations, where the visitor economy underpins small operators across the west coast and north west, in my case, it’s not a trivial matter and I don’t think it’s been adequately addressed in the debate to date.
The other thing I want to raise is the manner of consultation. The Tourism Industry Council’s submission makes a fair governance point, whatever one thinks of their overall opposition to the bill, because their preference is it be voted down. They said that the 2030 visitor economy strategy is a joint government industry framework and this measure was developed and announced outside of that. Again, who was consulted? Why would you develop a 2030 visitor economy strategy jointly with industry and government but do this off to the side with no reference to that? It doesn’t make sense when it will have a direct impact. A bit like few other policy announcements. Bypassing an established consultive mechanism is not a very transparent approach. It’s not an approach that should be used in policy development, even if I or anybody else might ultimately conclude that the policy itself has merit or not.
Before I can settle on my position on this bill and I will listen to other members as well as the Leader in her response and potentially the debate in the committee stage, if the bill gets there. A few things for the Leader as well. I know some of these have been posed by others, but I want to know about the resourcing for the State Revenue Office. We bring in these bits of legislation in this place that put additional workload and burden on our independent statutory officers, like the Ombudsman, for example, Health Complaints Commissioner, Commissioner of State Revenue. Without speaking out of school, I believe that we were informed this morning that there is no additional resourcing for the SRO, and this will be a challenging thing to set up and administer whichever way you look at it, trying to figure out who’s in, who’s out; where was the booking actually made? How much additional funding will be provided to the SRO to facilitate this work? Will we see it in the 2027 28 Budget? Because that is when it starts, but that doesn’t count the work that needs to be done this financial year to set it up. I also want to know why no economic modelling of visitation impact was undertaken, particularly that regional impact, and whether Treasury intends to evaluate the levy’s actual effect once it’s in operation, should it pass this place.
I also have some questions – I know there’s amendments being proposed and I’ll come to that shortly – whether the clause defining booking platform providers adequately captures local booking agents and other intermediaries who collect payment directly, so the collection base is not narrower than the bill seems or the policy intent seems to be. I note there’s a number of amendments, if we get into the committee stage, but I will be asking members if we get to that stage, who was consulted on these. Because when we are amending something like this, particularly in an area of complex tax law, there needs to be proper consultation, otherwise we’re going to create a bigger mess than this already is. What assessment, if any – this flows to a previous question I asked the Leader – has been made of the impact on regional and intrastate travel, particularly in electorates where discretionary regional spending underpins small tourism operators? Because there are some – and I’m sure others in regional areas have got them – small operators who do multiple things. They might have an accommodation, but they also run a tour as a sideline, they might have a cafe or something like that to support the business. The undermining of the other parts of their business becomes real, even though they won’t get the benefit of the levy or tax, that goes to state coffers.
Weighing all this up, I’m not persuaded that opposing a new revenue measure is a credible position for Tasmania at present, which puts me in a very difficult position. A narrowly targeted levy, substantially borne by visitors, if that is the case, is in principle more defensible than trying to raise revenue through options that fall heavily on Tasmanian households. That sits well with me, but let’s make sure that’s what we’re doing. Let’s be sure. In principle it’s more defensible, but that’s the issue here. The gaps I’ve outlined on the modelling, the collection base, the purpose of the revenue raised and on the regional impact are real and I need further information. I’ll listen carefully to the Leader’s response and make my decision as to – I’m likely happy to support it at the committee stage, but I’ll reserve my decision for the third reading, but I will listen, and see if there’s been some satisfaction in the answers provided by the Leader.