30th November 2023 14:15
Victorian Legislative Council, Melbourne
David ETTERSHANK (Western Metropolitan) (14:11):
I am delighted to make a brief contribution to the State Taxation Acts and Other Acts Amendment Bill 2023.
This bill amends several acts in relation to Victoria’s taxation and land valuation laws. Among other things it closes some loopholes to prevent land taxes and windfall gains taxes being passed on to unsuspecting buyers and reforms the Land Tax Act 2005 to expand the definition and geographical boundaries of vacant residential land. This is designed to encourage the owners of those vacant and unoccupied homes to make them available for rent or occupation.
Other members have spoken and I am sure will speak on these and other aspects of the bill. I would like to turn my attention to part 8 of the bill, which specifically reforms the capital improved value of land provisions. Part 8 amends the calculations for capital improved value of land by including the value of the fixtures on the land – so the infrastructure on the land – regardless of whether those fixtures are owned by the owner of the land or the tenant or any other occupier of the land.
During our consultations with various stakeholders we learned that the changes to part 8 affect how the fire services levy is calculated, and this is where it gets a bit tricky. An increase in fire services levy under the new capital improved value would significantly impact renewable energy facilities. Renewable energy facilities such as wind, solar and battery facilities do not generally own the land on which they house their infrastructure, and that infrastructure is very expensive.
One wind turbine typically will cost around $6 million, so the value of a wind farm with 50 turbines and a 25-year life span would see its capital improved value go from around $10 million to $300 million and lead to an increase in the fire services levy from around $200,000 to over $6 million over the course of the facility’s life.
Now, we heard from stakeholders, including the Clean Energy Council, the Clean Energy Finance Corporation and Environment Victoria, that this would have a chilling effect on investment in Victoria’s renewable energy sector and create a genuine disincentive to renewable energy project development in this state. That is surely the last thing the government wants to do given its ambitious renewable energy targets.
It would also see a rise in the cost of renewably sourced electricity, which would inevitably be passed on to the consumers. Legalise Cannabis Victoria brought this to the attention of the Treasurer and to our colleagues in the Greens, as it happens. To the government’s credit, they took on board our concerns and consulted with the Clean Energy Council and the Clean Energy Finance Corporation.
They have developed an elegant solution, amending the fire services act to place wind, solar and battery facilities in the ‘public benefit’ category for the purposes of calculating the fire services levy. This means renewable energy facilities will pay 5 cents per $1000 in place of 77 cents per $1000. This is a massive reduction in FSL fees, and we commend the government for this amendment.
This is a win for the renewable energy sector and ultimately for every Victorian struggling to pay their power bills. I would like to sincerely thank the Treasurer and his advisers for the constructive approach they took in working with Legalise Cannabis Victoria and the rest of the progressive crossbenchers. It has resulted in a better bill and proof that a collaborative approach can yield positive outcomes.
I commend the bill to the house.
[ENDS]
