LOCAL GOVERNMENT AMENDMENT (RATES) BILL 2017 (No. 7)

Legislative Council Wednesday 31 May 2017

Ms  FORREST (Murchison ) - Mr President, I intend to make a brief contribution and then seek to adjourn the debate.  We have received a lot of information at the last minute, which concerns me and other members in this place, particularly given the implications of the legislation's retrospectivity and the exemption for marine farming.

I am sure I will be criticised for saying we should not exempt marine farming because it creates employment in my electorate.  Yes, it does but, as I understand it, councils still have the capacity to exempt any marine farm in their municipality, including some wholly within their municipal boundary, as in Macquarie Harbour, or some partly on municipal land and partly not.  Sometimes they can be completely outside the municipal boundary.

That power already exists.  Without taking some further advice on this, I think we risk creating an inequitable situation later on.  If councils feel they can levy rates in this area, they are not exempt.  However, if they choose not to levy rates because that creates employment in their region, or for whatever reason they decide, they can do that.  That is particularly important because these are commercial operations.  They are not common good, benevolent or charitable organisations that already have some exemptions through local government anyway.  I understood that exemptions from rates and their application were really for public good as opposed to private enterprise exemptions. 

The other issue is that the Government has made clear that it wants to initiate an equitable approach in this area.  I think the problem is that a whole heap of inequities will occur whatever we do here.  With one legal case afoot, who knows?  Others could be up there as we speak, preparing a case.  Even if we deal with this today, there is still the period between its enactment and when it takes effect.  That could happen anyway.

Councils could also be financially impacted if the retrospectivity clause is not supported and they are required to pay back the significant amounts of money they have received in rates from people.  They would also get some they were not expecting.  I think Brooke Street Pier will probably have to start coughing up - they rightly challenged the validity of the demand for rates for the last two years, but they have paid for one year.  I can understand the argument that you only pay about a $300 per annum fee for the privilege of having your shack, your boatshed, your jetty or whatever on crown land.  That does not really factor in the provision of broader services in the municipality where your shack, boatshed, jetty or whatever it is exists.  There is a common good thing there with the payment of rates - it is a tax, I accept that. 

It is a shame in many respects that we do not have a full and proper review of our whole tax system in terms of state-based taxes because much of this could be addressed through that process.  Local government is the best level of government to manage and apportion taxes based on land, which is what this is about.  It is about taxes levied on land.  Rates are taxes levied on land.  It is a shame, and that is why I have a bruise on my forehead because I keep raising it and no-one seems to have the ticker for getting into it.

Mr President, there are a number of unanswered questions.  I understand the High Court ruling in regard to the case on the west coast, where councils in good faith thought they were doing the right thing, but the legislation - it is through no fault of my own, I believe, but this place overall for passing legislation that did not adequately address the agreement that had been put in place.  We need to take some responsibility as a parliament because the legislation did not adequately reflect the intention.  Sometimes that does not become apparent until the legislation is actually applied. That is the reason I will seek an adjournment on this matter.  If we push through with it now, what other mistakes will we make? 

That was an unintended consequence of the legislation previously put in place to deal with the agreement.  The High Court made a decision that said it does not.  If we proceed down this path, we may find we could be facing a similar situation in the future.  I would prefer to be cautious about this one.  There are time imperatives because councils wish to set their rates; however, many challenges can affect the striking of rates.  They will have to work through that.  They can defer it.  I am not saying that we hold it up for an inordinate length of time.  I am aware we have a winter break coming.  It is not our fault we have only a few sitting days available before the winter break.

In the briefing we were provided with a list of the stakeholders who had been directly consulted.  I would like to know when those letters were sent out.  A large number of organisations have a direct interest in crown land.  The Brooke Street Pier is not included.  Freycinet Lodge is, through the RACT.  When you name a business in the second reading speech, you would have thought Brooke Street Pier would have been consulted, but apparently not. 

On the date they were consulted, what was the nature of that consultation?  If they were just informed, 'This is what we are doing', to me that is not consultation unless the definition has changed. 

Mr Finch - Instruction.

Ms FORREST - That is right.  Was it, 'This is what we are hoping to do, we need to address this problem related to the High Court ruling.  This is how we propose to do it.  What do you think?'  Or was it, 'This is what we are doing.  Here it is'.  That is what I would like to know.  I would like to see copies of the letters which were sent out.

Mr President, with those comments I move the debate stand adjourned.

Debate adjourned.

Resumed from 31 May 2017 (page 19)

Ms FORREST - Mr President, I sought to adjourn the debate yesterday because there were a lot of unanswered questions.  I cannot remember what other reasons there were.  There has been so much chopping and changing with legislation we are dealing with, that it is a bit hard to know which one is coming up next.

Mrs Hiscutt - It is very difficult.  I try to keep going through one but we keep getting deferred, so we have to work our way through it.

Ms FORREST - Let us finish the ones on the Table before we start any more.

Mrs Hiscutt - I try to do that.

Ms FORREST - Mr President, in my second reading contribution yesterday I mentioned areas where I believe we need more information.  I sent a series of questions to the Acting Leader's office, which I will now pose.  An area of concern for me is not that there is a problem with enshrining legislation correctly, which was the intent of the agreement in 2003.  I accept that local governments have been acting in good faith to collect rates according to the agreement.  My concern is that if we rush this through without proper process or due consideration we may find ourselves in the same position.

It is important we try to make sure that does not happen.  The key area of concern to me is not about whether the councils can or should raise rates on shacks and other properties on crown land where people are receiving services.  That is what rates are about.  They are a tax that funds a range of council services.  Anyone who lives in a shack still goes into town.

The issue is the retrospective aspect of this, particularly with a live legal case occurring.  I understand, through the old Legislative Council grapevine, that there may be an amendment from the Government to try to address this.  I have not seen anything circulated so it is a bit hard to speculate on what that might be.  You cannot assume there is only one legal case either.  It will not be okay if the amendment, when it comes, tries to retrospectively set it back to a date beyond today.

Mrs Hiscutt - Mr President, we will circulate that amendment now.  I did not realise it had not gone out.

Ms FORREST - Maybe it will be circulated soon. 

Mrs Hiscutt - As we speak.

Ms FORREST - As the Acting Leader speaks.  That may address the concern I and other members have.  Regardless of whether you put a stop to retrospective claims other than those before the court at the moment, there will be a degree of inequity here.

Mr Valentine - You cannot do that.

Ms FORREST - No, you cannot, no.  I acknowledge that.  Brooke Street Pier, for example, was awake to it after mistakenly paying the first rates notice and has since refused to pay.  They have a benefit that others, like the Derwent Sailing Squadron, who was not so alert to it, do not.  I am sure there are many others.  As we were told, anyone who owns a shack on crown land has been paying rates when technically they should not have been.  I will look at that amendment when it comes around.  I know we will debate that further in the Committee stage.

The other issue concerns giving exemptions to private enterprise with a marine farming exclusion in the municipal area.  It is a concern when you exempt a profit-making entity when this was designed for public benefit.  It is difficult when some marine farms are part on municipal land and part not and some are completely outside the municipal land.

Do we need to exempt them in legislation?  Or can the local government body, which they are attached to when they are on municipal land, create its own exemption because it believes it is the right thing to do?  Can it make that decision or do we need this in this bill?

I also posed a question about a marine farm that did not have any on-land facilities.  They had a lease in Macquarie Harbour, which is municipal land by the definition because the municipal boundaries is out at the Heads, but they did not bring their produce ashore.  Instead they took it out through the Heads and processed it offshore in Victoria.  In this case, they would not pay any land based rates, but they would still enjoy the benefit of our land, or seabed in this case.

The argument was that they still have a land-based facility and they will pay some rates on that land-based facility.  But you do not have to have that.  As the member for Mersey rightly pointed out, shack owners enjoy the occupation of our land and pay a relatively small fee for that privilege.  I can understand his point there - it does not cover the cost of providing services to the broader region.  Those people are not making a profit from their shacks.  With the marine farm you have a profit-making venture which is making a profit from land that we, the people of Tasmania, own, but it is potentially not paying any rates for the privilege.  It might be paying a lease from the Living Marine Resources process and/or the crown lands process.  What is the process through which it pays?  It is important that it pays for the privilege of using our public asset.

What is the real challenge in addressing the issue of leases that include both municipal and non-municipal land?  We were shown a map of Big Bay - when they are part-on, part-off - but what is the real challenge here?  Is that the key driving force behind this exemption?  The fact it is happening in marine farming at the moment is incidental to this question, although it is unfortunate for me that it is about marine farming because that is right in my area. 

Mr Valentine - One is within the municipal area and the other is outside.

Ms FORREST - The ones within the municipal area are in my area; others are both inside and outside. 

I need much more information about that to decide whether that clause should be in there.  I do not have an issue with formalising accurately in legislation the agreement that was made in 2003 to allow these crown land properties to be rated by local government. 

I also understand the issue of a loss of revenue.  I do not know whether the member for Hobart has had time to talk to the Hobart City Council.

Mr Valentine - It is $2 million a year.

Ms FORREST - Or more about how much they would lose.

Mr Valentine - It's $2 million a year.  It is about 3 per cent in rates.  The council would have to lift the rate to cover that $2 million.

Ms Rattray - It says here $10 million.

Mr Valentine - I questioned that too.  That may be over a number of years.

Ms FORREST - Your information was $2 million a year?

Mr Valentine - From the general manager, it was $2 million per year but we are dealing with the likes of Wrest Point and piers and things.

Ms FORREST - They have refused to pay so that is money they will get which they were not getting because they had refused.

Mr Valentine - They might pick on Brooke Street.

Ms FORREST - Brooke Street Pier was talked about by LGAT in the second reading speech, and they were not in the list of consulted people.  That is odd to me.

Mr Gaffney - Brooke Street said they did not get any services -

Ms FORREST - People can find their way there.  This amendment is being circulated as I speak.  The Acting Leader said we will need further discussion in the Committee stage.  There does not appear to be a date limiting it.  I assume it is from the date of proclamation of the bill as to whether any legal proceedings are on foot.  That is a matter we can drill down further into during the Committee stage.

Mrs Hiscutt - It is the introduction of the bill.

Ms FORREST - Where does it say that?  The introduction day?  I do not think that is right.  It is still retrospective and that is the issue.  It is a matter for discussion in Committee.  I am happy to support the bill into the Committee stage.  I will need some more answers from the Acting Leader.  The people of the Derwent Sailing Squad were quite right to point out if marine farming - a for-profit activity - is getting an exemption, why are the not-for-profit organisations, which provide a great deal of community service, not getting exemptions.

I have spoken at least three times in special interest matters about the Wynyard Yacht Club and the amazing work it does.  The club and the Derwent Sailing Squadron both offer the Sailability program.  They provide enormous benefit to the region in terms of education.  They engage with kids at schools who perhaps are not quite engaged in the education system as well as they could be, people with disabilities, and a whole range of areas.

People are unhappy about this.  They ask, 'Why are we giving an exemption to marine farming, which is making money while we are having to pay?'  They are not-for-profit for a start but not a charitable organisation. To register as a charitable organisation is another step up and not everyone can meet that.  They still provide a lot of community benefit.  The Brooke Street Pier - a significant portion of their building is public asset, accessed by the public, used by the public; it is not something they make money out of.

Inequity is inherent in this and what makes it difficult.  If they are going to give an exemption to the marine farmers, we are on dangerous territory if we promote the equity argument.  Equity was one of the key drivers in the second reading speech.