State Revenue Legislation Amendment (Defence Force Concessions) Bill 2009



About this Item
SpeakersTsang The Hon Henry; Mason-Cox The Hon Matthew; President; Nile Reverend the Hon Fred; Kaye Dr John; Voltz The Hon Lynda; Moyes Reverend the Hon Dr Gordon
BusinessBill, Second Reading, Third Reading


STATE REVENUE LEGISLATION AMENDMENT (DEFENCE FORCE CONCESSIONS) BILL 2009
Page: 18844

Second Reading

The Hon. HENRY TSANG (Parliamentary Secretary) [9.08 p.m.], on behalf of the Hon. Eric Roozendaal: I move:

      That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.
      In introducing the State Revenue Legislation Amendment (Defence Force Concessions) Bill 2009 the New South Wales Government is leading the way for national reforms to the first home buyers program to support defence personnel. This is an Australian first: the first time that a State has legislated specifically to ensure that defence personnel are able to claim the same benefits as everyone else. The New South Wales Government administers a number of State and Commonwealth first home benefit schemes through the Office of State Revenue.

      The First Home Owners Grant is a grant of $7,000 to assist in the purchase of a first home. The grant is a national scheme, funded by the States and Territories, which operates on a uniform basis under the Intergovernmental Agreement on Federal Financial Relations. The First Home Owners Grant has been complemented since October 2008 by the First Home Owners Boost, a temporary additional grant funded by the Commonwealth. These payments were reduced in value at the end of September and will expire on 31 December 2009.

      The New South Wales New Home Buyers Supplement is a temporary assistance program, announced in last year's mini-budget, that operates until 30 June 2010. Like the First Home Owners Grant, the New South Wales Government funds the supplement. It provides a grant of $3,000 to first home buyers purchasing a newly constructed dwelling. It is an important stimulus to our housing construction sector. This grant is in addition to the First Home Owners Grant and the First Home Owners Boost.

      First Home Plus provides a stamp duty exemption on all first home purchases up to $500,000 in value and a further concession for properties worth between $500,000 and $600,000. This program is worth up to $17,990. First Home Plus One also provides a stamp duty concession for first home buyers who are purchasing under a shared equity arrangement with a financial institution or another person. Under these schemes, New South Wales first home buyers currently receive up to $34,990 in grants and stamp duty cuts, which are among the most generous in Australia.

      A key requirement of all these first home benefit schemes is that the new homeowner must live in the dwelling as his or her principal place of residence. Under this residence requirement, at least one of the applicants is required to occupy the home as the applicant's principal place of residence for a period of at least six months commencing within 12 months of purchase. The residence requirement is intended to ensure that the benefits are received on the purchase of a first home for owner occupation, not a first investment property. The Office of State Revenue conducts checks to ensure that applicants comply with the residence requirement, and applicants who do not are required to repay the grant and pay the duty, and in some cases may be subject to penalties. To overcome any unfair application of the time limits, the chief commissioner of State Revenue has the discretion to reduce the period of occupation, to extend the period during which occupation commences, or to exempt an applicant from the residence requirement entirely.

      The First Home Owner Grant discretion is administered subject to national guidelines. For consistency, the same guidelines are also applied to applicants for the New South Wales Government's other assistance schemes for first home buyers. For many Australian Defence Force personnel, however, the nature of their employment is such that they are unable to comply with the residence requirement, and would also be unable to benefit from the discretions to fully or partly waive that requirement. This is due to the requirement for Australian Defence Force members to provide unrestricted service such that they must be free to be posted or deployed across Australia and overseas if necessary. Operational requirements and a rotation policy mean that Australian Defence Force personnel will normally be moved to different localities a number of times during their careers, sometimes at short notice. In addition, deployments of Australian Defence Force personnel within Australia and overseas occur on a sometimes unpredictable basis in response to events such as peacekeeping missions and natural disasters, as well as deployment to locations at or near war zones.

      As a result of the unrestricted service requirement for Australian Defence Force personnel, many may effectively be locked out of eligibility for first home benefits if they choose to buy a home while in the service. This is so even if the person intends to use the home in the period after completing service in the Australian Defence Force as his or her principal place of residence. In cases where benefits are obtained on the purchase of a home that was bought with the genuine intention of occupying it as the applicant's principal place of residence, failure to satisfy the residence requirement could result in the applicant being liable to pay or repay significant amounts to the Office of State Revenue.

      The Government wants the rules reformed so that the men and women serving and protecting our country are not unfairly disadvantaged. The bill provides equivalent financial assistance to members of the permanent Australian Defence Force who are unable to meet the residence requirement for the First Home Owner Grant and the other first home owner assistance schemes provided by the New South Wales Government. As a result, members of the Australian Defence Force who are otherwise eligible for first home assistance will be able to obtain and retain those benefits without being disadvantaged by the requirement for unrestricted service with the Australian Defence Force. Members of the Army Reserve, Naval Reserve and Air Force Reserve are not subject to the same unrestricted service requirement as members of the permanent defence forces. The proposed assistance will therefore apply only to members of the regular Army, the permanent Navy and the permanent Air Force. This initiative will apply from the date this bill was introduced.

      Amending the residency provision in the First Home Owner Grant Act 2000 and the criteria in the Duties Act 1997 for first home owner assistance will support service men and women doing their job and will give them one less thing to worry about while they are serving Australia's interests. The Australian Defence Force has about 3,000 members deployed to 12 different overseas operations, including in Iraq, Afghanistan and East Timor. About 500 Australian Defence Force personnel are involved in domestic operations, such as protecting Australia's borders, and they can also be called interstate at short notice. The men and women who serve in our armed forces are prepared to sacrifice their lives in active duty and deserve to be supported in every way possible. That is why the New South Wales Government is asking the Commonwealth and other States to support our push to change the rules for defence personnel in relation to first home owner grants. I commend the bill to the House.

The Hon. MATTHEW MASON-COX [9.09 p.m.]: It is my pleasure on behalf of the Opposition to support the State Revenue Legislation Amendment (Defence Force Concessions) Bill 2009. It is worth noting that the bill seeks to amend the First Home Owner Grant Act 2000 to allow a grant similar to the first home owner grant to be paid to members of the Defence Force who are first home owners but who do not comply with the residence requirement for the first home owner grant. It also amends the Duties Act 1997 so that members of the Defence Force do not have to comply with the residence requirement to be eligible for duty concessions under the First Home Plus Scheme.

By way of background, the Treasurer announced these concessions for defence force personnel during Treasury estimates hearings on 15 September. However, shortly thereafter the Chief Commissioner of State Revenue, Mr Newbury, admitted that no research had been done on the number of personnel likely to take up the concessions, and he could not provide an estimate of the funds that would be required. Naturally, the absence of such an analysis could not deter the Treasurer from grandstanding in budget estimates committee hearings—he obviously needed a headline and something positive to say in respect of the questioning from those present.

I note that there are currently around 3,000 members of the Australian Defence Force and that an estimate that could be derived on the basis of the likely take-up from those defence force personnel is in the vicinity of $2 million to $3 million. However, it would be appreciated if the Parliamentary Secretary or the Treasurer were able to provide in the reply some details as to the likely cost of these concessions. The arguments for these concessions are compelling. Defence force personnel have been unfairly prejudiced in relation to the first home buyer concession due to the nature of their job, in the sense that many defence force personnel are not able to live in the residence for the minimum six months required due to their service overseas. The bill enables an important stakeholder to qualify for stamp duty concessions—which is an anomaly that should have been addressed long before this.

Such an anomaly has become somewhat commonplace under this Labor administration. Indeed, one need only cast one's mind back to the parking space levy, a measure introduced by the Government under the guise of last year's mini-budget. I note the similarity between the parking space levy and this legislation, in the sense that no analysis was done of the budget implications of the introduction of such a measure. Indeed, the parking space levy was almost doubled in the mini-budget, but the impact on businesses and on congestion in the Sydney central business district was not in any way assessed. This is something that the Opposition finds neglectful, at the very least. Certainly it is a hallmark of the way this Government seems to do business. Another example is the Labor Party's historic electricity privatisation—historic in that it continues and, in a similar vein, lacks analysis and proper research.

The Hon. Lynda Voltz: Point of order: My point of order relates to relevance. The House is debating the State Revenue Legislation Amendment (Defence Force Concessions) Bill, which relates to first home owner grants for members of the Australian Defence Force. I ask you to direct the Hon. Matthew Mason-Cox to return to the leave of the bill.

The PRESIDENT: Order! While traditionally second reading debates in this House are wide ranging, members are constrained by the long title of the bill, to which I ask the Hon. Matthew Mason-Cox to address his remarks.

The Hon. MATTHEW MASON-COX: The similarities across a whole range of areas are certainly there for all to see. I can understand the sensitivity of the Hon. Lynda Voltz in respect of electricity privatisation. The ongoing sensitivity in that regard is noted. I return to the tenor of the bill. Naturally, the Opposition will support the bill as it grants just relief to our defence force personnel, whose selfless sacrifice on behalf of our nation should not only be recognised but also respected. Accordingly, anomalies that disadvantage this important group in our community should be addressed. The bill is a matter of equity and deserves the support of the House. I commend the bill to the House.

Reverend the Hon. FRED NILE [9.13 p.m.]: On behalf of the Christian Democratic Party I am pleased to support the State Revenue Legislation Amendment (Defence Force Concessions) Bill 2009. The bill removes an anomaly that obviously was not deliberately intended but that discriminated against members of the Australian Defence Force, in particular regular members of the army, navy and air force. As members know, we have more than 3,000 members deployed in 12 different overseas operations, including in Iraq, Afghanistan and East Timor. Those defence force members, and others who will serve Australia in the future, have been seriously discriminated against because they could not apply for the various first home buyer benefits that are available to all other Australians.

The bill amends the First Home Owner Grant Act 2000 and the Duties Act 1997 to remove a potential impediment to Australian Defence Force personnel receiving first home benefits. The bill will effectively remove the residence requirement for Australian Defence Force personnel who are unable to satisfy existing criteria to receive the grant and stamp duty concessions. However, this will only apply to regular members of the Australian Defence Force. The legislation will improve their ability to access the $7,000 first home owner grant and the stamp duty concessions under First Home Plus or First Home Plus One, worth up to $17,990. Applicants may also be eligible for the temporary first home owner boost of $7,000 or $3,500, and the $3,000 New South Wales new home buyers supplement. I am sure this will be received with great pleasure by members of our Australian Defence Force, who should be able to have the security of having a home even though they may be called to serve for a year or two years overseas. We are very pleased to support the bill.

Dr JOHN KAYE [9.16 p.m.]: On behalf of the Greens I speak to the State Revenue Legislation Amendment (Defence Force Concessions) Bill 2009. The bill amends the First Home Owner Grant Act 2000 and the Duties Act 1997 to make provision for grants and duty concessions in respect of Defence Force personnel. The bill allows full-time Defence Force personnel to access first home owner grants and stamp duty concessions without the need to meet the residence requirement. Under the current residence requirement a recipient must live in the dwelling as a principal place of residence for at least six months, commencing within 12 months of purchase. The intent of the requirement is to ensure that the benefits are received for owner occupation and not in relation to investment property. The bill recognises that this restriction places unreasonable barriers to access on defence force personnel.

We are talking about a substantial amount of money here. As has been outlined, the grants and stamp duty cuts currently available to first home buyers total up to a maximum of $34,990. Our reservations in respect of this bill do not relate to support for defence force personnel. We agree that it is unreasonable to place barriers to access on defence force personnel, given the mobility that is required of them and their families in order for them to fulfil the terms of their service, and in particular given the difficulty of being required to be in one place for at least six months.

We note that defence force personnel have access to rental assistance. However, that does not assist them in purchasing their own home, which is particularly important to them at the time of their departure from the defence force. We therefore have no reservations about granting these concessions to members of the Australian Defence Force. Our reservations in respect of the bill relate principally to extending the provisions regarding stamp duty concessions and first home owner grants, which of themselves are not helpful in alleviating the affordability gap that exists within Australian society. In particular, the absence of means testing with regard to stamp duty concessions and first home owner grants results in the money being poorly targeted. The mode of delivery means that the money is spent largely on inflating prices. It becomes a bonus to the vendors.

The Hon. Lynda Voltz: Point of order: My point of order relates to relevance. The House is debating the State Revenue Legislation Amendment (Defence Force Concessions) Bill. I ask you to direct Dr John Kaye to address the bill.

Dr JOHN KAYE: To the point of order: The legislation specifically refers to amending the First Home Owner Grant Act 2000 and the Duties Act 1997. The legislation extends the availability of the first home owner grant to a new class of people who previously would not have had access to it. Therefore, it is totally appropriate in debating the bill to speak about some of the negative impacts that that extension might have.

The Hon. Lynda Voltz: To the point of order: The Act specifically provides that members of the Australian Defence Force who are enrolled to vote in New South Wales elections do not have to comply with the residence requirement to be eligible for the scheme. My point of order relates to relevance. This is a Defence Force requirement. The amendments in this bill will ensure that defence force personnel are eligible for the scheme.

The PRESIDENT: Order! I again remind members that the bill before the House is for an Act to amend the First Home Owner Grant Act 2000 and the Duties Act 1997 to make provision for grants and duty concessions in respect of defence force personnel. Debate that is in accord with that long title is in order. Debate that is outside the leave of that long title is not in order. I ask the member to bear my ruling in mind as he continues.

Dr JOHN KAYE: Mr President, I appreciate your ruling and I will endeavour to confine my remarks to the long title. Before the point of order was taken I was saying that this bill extends the range of people who will be able to access the concessions that are currently available under the First Home Owner Grant Act 2000 and the Duties Act 1997. As the Greens are concerned about the operation of both those Acts, their extension will extend the adverse impact of any inflated prices, in particular, for properties at the bottom end of the market, and that will be a bonus for vendors.

Reverend the Hon. Fred Nile: It affects a small number of people.

Dr JOHN KAYE: As Reverend Nile correctly observed, it affects a relatively small but highly deserving number of people. However, that is not the point I am making. The point I am making is that it will extend the adverse impact of any inflated prices—an issue about which a large body of opinion says we are going in the wrong direction.

The Hon. Greg Donnelly: Who said that?

Dr JOHN KAYE: I am glad the Government Whip asked that question. The people who say that are members of the Rudd Government's advisory committee on housing affordability. In May 2009 they criticised the extension of the First Home Owner Grant and said:
      ... the grant's extension will mean first-home buyers will continue paying inflated prices for bottom end properties at a time when the market should be moderating.

I inform the Government Whip that former ANZ Chief Economist Saul Eslake, another person who was quite critical of these grants—the Government Whip would recognise Saul Eslake as a leading voice and commentator on the issue—said:
      Anything which puts additional cash in hands of buyers (such as grants or stamp duty concessions) results merely in more expensive houses.

The Hon. Lynda Voltz: Point of order: My point of order again relates to relevance. This amendment will include under the residence requirement a special provision for members of the Australian Defence Force. The amendment is not an extension of the Act; members of the Defence Force are already eligible to apply for this concession. This amendment will include in the bill a special residence provision. I ask you to rule on relevance and to request the member to debate only the long title of the bill.

The PRESIDENT: Order! I ask all members to bear in mind the long title of the bill.

Dr JOHN KAYE: I have come to the end of my remarks other than to say that the Greens do not oppose this bill. It freely opens up access, removes current residency requirements and leaves rather open access to the First Home Owner Grant and stamp duties concessions. I ask the Parliamentary Secretary, in his reply to debate on the second reading, to address the mechanisms that will be put in place to ensure that those provisions will not be rorted, that is to say, people will not use the First Home Owner Grant and the stamp duty concessions provisions in this legislation—we are extending those provisions and we are removing the residence requirement—to purchase a rental property, as that would be against the spirit of the principal Act that this bill seeks to amend. Having put that issue on the table I commend the bill to the House.

The Hon. LYNDA VOLTZ [9.24 p.m.]: I wish to refer to some of the comments made about the State Revenue Legislation Amendment (Defence Force Concessions) Bill 2009. Members would be aware that defence force personnel are often required to leave the country and go overseas on operations. Defence force personnel are also moved to many different locations within Australia. In my six years of serving in the regular Army I was moved at least 10 times. Moving around to that extent makes it difficult for defence force personnel to purchase property. As Dr John Kaye said earlier, when service personnel leave the Defence Force and are resettled they must be given some security.

The New South Wales Government is simply amending the Act to ensure that members of the Defence Force are eligible for a grant for which everybody else in New South Wales can apply. This bill does not seek to extend their concessions and they will not receive concessions that anyone else does not receive. The Hon. Matthew Mason-Cox referred earlier to the cost of this exercise. The cost of this exercise will not exceed the cost of home grants, stamp duty exemptions and concessions that are available to everybody else. In 2008-09 the cost of those concessions was $1.3 billion. This bill will ensure that defence force personnel can apply for those grants and concessions.

The Hon. Trevor Khan: We are with you.

The Hon. LYNDA VOLTZ: I am clarifying the points that were raised earlier by the Hon. Matthew Mason-Cox. This bill will give defence force personnel clarity and certainty that they can purchase a property without the fear of having to repay the New South Wales Government if they are posted to Townsville, Darwin, Iraq or Afghanistan. I know that most members in this Chamber will wholeheartedly support this straightforward amendment to the Act.

Reverend the Hon. Dr GORDON MOYES [9.27 p.m.]: I support the main thrust of the arguments put forward by the Hon. Lynda Voltz and thank her for them. I speak briefly in debate on the State Revenue Legislation Amendment (Defence Force Concessions) Bill 2009, which has been introduced to ensure that people serving in the Australian Defence Force [ADF] are able to enjoy the same first home buyer benefits that other Australians enjoy. Members of the regular Army, permanent Navy and permanent Air Force are subject to an unrestricted service requirement under which they must be free to be posted or deployed across Australia or overseas, if necessary. Hence Australian Defence Force personnel are unable to comply with the residence requirement that applies to all first home benefits administered in New South Wales by the Office of State Revenue. Under the residence requirement, a first home owner must live in the home for at least six months, within 12 months after the purchase of the home. The objects of this bill are as follows:

(a) to amend the First Home Owner Grant Act 2000 to allow a grant, similar to the first home owner grant, to be paid to members of the Defence Force who are first home owners but do not comply with the residence requirement for the first home owner grant, and

(b) to amend the Duties Act 1997 to provide that members of the Defence Force do not have to comply with the residence requirement to be eligible for duty concessions under the First Home Plus scheme.

Australian defence force personnel are required to provide unrestricted service, and that means that they must be free to be posted or deployed across Australia and overseas, if necessary. Operational requirements and a rotational policy mean that Australian Defence Force personnel are likely to be moved to various localities a number of times, sometimes at short notice, and often on an unpredictable basis in response to events such as peacekeeping missions as seen in Timor, natural disasters as seen in the Asian tsunami and in Indonesia, and wars such as those in Afghanistan and Iraq. As a result of the unrestricted service requirement, many Australian Defence Force personnel may be excluded from eligibility for first home benefits. Accordingly, the bill makes amendments to provide equivalent financial assistance to members of the permanent Australian Defence Force who are unable to meet the residence requirement for the First Home Owner Grant and other first homeowner assistance schemes provided by the New South Wales Government.

Under the bill, members of the Australian Defence Force who are otherwise eligible for first home assistance will be able to obtain the first home buyers benefit without being disadvantaged by the requirement for unrestricted service with the Australian Defence Force. It is important to note that members of the Army Reserve, Navy Reserve and Air Force Reserve are not subject to the same unrestricted service requirement as those of the permanent defence force. Therefore, the proposed assistance will apply only to members of the regular army, the permanent navy and the air force. The bill is in the best interests of service men and women and their families. It will do a great deal to provide solid future family planning. It will also give a great deal of emotional and psychological support, particularly to the spouses of service men and women whilst our Australian Defence Force personnel are serving throughout Australia or overseas. The bill will enable and assist members of the Australian Defence Force and their families to establish their own home. It is for that paramount reason that I commend it to the House.

The Hon. HENRY TSANG (Parliamentary Secretary) [9.30 p.m.], in reply: I thank all members who have contributed to this debate. The State Revenue Legislation Amendment (Defence Force Concessions) Bill 2009 is an important piece of legislation that will ensure that defence personnel are able to enjoy the same first home owner benefits as other Australians. It is also an Australian first, with New South Wales leading the way in legislating for these changes to make it easier for those in our Army, Navy and Air Force to realise the great Australian dream of home ownership. I would like to take this opportunity to respond to issues raised by the Opposition, both here and in the other place.

Firstly, and most importantly, I am disappointed that the member for Manly took the opportunity when debating the bill to once again talk down the State's economy. As honourable members would be aware, the Treasurer has spoken at great length about the green shoots of economic recovery that are starting to appear. Yet Opposition members want only to talk down the economy, while continuing to oppose vital stimulus measures. There have been a number of positive signs in our economy and the fact that the shadow Treasurer chooses to ignore these is a damning indictment on him and the Coalition.

For the information of all members, this bill has been modelled and costed by Treasury and on this point the Opposition has got it wrong once again. The Office of Financial Management has modelled the costs of this reform, whereas the Office of State Revenue, to whom the original question regarding costing was directed, will be responsible for administering the program. The Hon. Matthew Mason-Cox asked the same question again. I remind him that the Treasurer provided the cost of this measure to the budget during the estimates committee hearing.

The Hon. Matthew Mason-Cox: And what was it?

The Hon. HENRY TSANG: The Hon. Matthew Mason-Cox should talk to his shadow Treasurer.

The Hon. Matthew Mason-Cox: No, you should talk to your Treasurer.

The Hon. HENRY TSANG: No. We are not going to do the research for the Hon. Matthew Mason-Cox; we have given him the figure already. In fact, the Hon. Lynda Voltz, who is a most able member, has already given him a hint. In response to the concerns expressed by Dr John Kaye, the Office of State Revenue has a rigorous compliance unit that will ensure that only those who are entitled to receive benefits will do so. The Australian Defence Force currently has around 3,000 members deployed overseas in places such as Afghanistan, Iraq and East Timor. They are often called away at short notice, which in turn makes it difficult for many defence personnel to meet the residency requirement when purchasing their first home. These reforms will ensure that they do not unfairly miss out on the State and Federal governments generous first home owner programs.

The reforms include a $7,000 grant for all first home buyers; an exemption on stamp duty for all homes worth up to $500,000, with a concessional rate of stamp duty payable on homes valued between $500,00 and $600,000, which is worth up to $17,990 per home, and a New South Wales initiative; a further $3,000 grant to first home buyers purchasing a newly constructed home, which is designed to add an extra incentive for New South Wales first home buyers and help stimulate the housing construction sector; and the Federal Government's boost payments, which were worth up to $14,000 from their inception last October until the end of September this year and are valued at up to $7,000 until the end of 2009. These payments have been an important part of the Rudd Government's economic stimulus plan, with higher payments targeting buyers of newly constructed homes. This legislation means that the men and women who are putting their lives at risk serving Australia have one less thing to worry about whilst on deployment. It ensures that they do not miss out on our generous assistance programs for first home buyers. I commend the bill to the House.

Question—That this bill be now read a second time—put and resolved in the affirmative.

Motion agreed to.

Bill read a second time.

Leave granted to proceed to the third reading of the bill forthwith.

Third Reading

Motion by the Hon. Henry Tsang agreed to:
      That this bill be now read a third time.

Bill read a third time and returned to the Legislative Assembly without amendment.