Ms PATTEN (Northern Metropolitan) (15:33): I rise to speak on the State Taxation and Mental Health Acts Amendment Bill 2021. We could be forgiven for thinking that that is not what we were speaking about when we were listening to Mr Finn. This bill does a lot of things. It looks at first home owner grants, it looks at temporary exemptions and concessions for the transfer of new homes, it certainly looks at amending some of our land tax rates. It also looks at amending some of our stamp duty rates and, as has been predominately discussed today, it looks at putting a surcharge levy on our payroll tax for certain large corporations, a levy which will be hypothecated and directed to mental health in this state. This was absolutely one of the more significant recommendations from the Royal Commission into Victoria’s Mental Health System.
We know we have a mental health crisis, and certainly we have heard stories. We have heard testimony from almost every speaker today about that, and I do not think a single one of us has not been personally affected by mental health. Not a single one of us has not tried to help a desperate constituent get a family member or a loved one into help. Not a single one of us has not received tragic and urgent phone calls and messages from our constituents asking for our help. As someone who has sat on the Legal and Social Issues Committee for a number of years now, the number of times that mental health is raised as a symptom of other issues or as a result of other issues—whether that is misuse of drugs, whether that is homelessness, whether that is criminal behaviour, mental health is just always in the picture, almost always part of the problem, but almost always also part of the solution.
So to commit to fixing our mental health system we have to find the money, and how do we do that? I do not like taxes, and I appreciate I had a very good conversation with the Business Council of Australia. It was very far-reaching, but one of the questions that no-one seems to be able to answer who opposes the increase in or the levy on the payroll tax is: where will we find the money? How will we respond to that recommendation by the royal commission that we establish a dedicated stream of funding for mental health? How will we do that?’. And the business council were representing their members, and I completely understand that, and I think they represented them well. They also quite rightly gave me examples of where their members—Woolworths, large mining companies, large banks like the Commonwealth Bank—actively did help their employees with mental health programs within their businesses, and I commend them for that.
But as I was thinking about it last night I was thinking, ‘Well, if I was asked to pay a mental health levy, if I was asked if I would pay a levy that would be some 0.5 per cent’—when I had a business it would have been maybe 1.5 per cent of my salary bill—‘without a doubt I would have said yes’, and I do not think there are many Victorians who would not say, ‘We need to fix our mental health system, and we understand it needs money to do that’. And as I reflected as someone who has run a small business—this levy is not going to affect small businesses, it is really only going to affect a few large businesses—I thought, ‘As a small business operator I would’ve not had any hesitation in supporting this’. And in looking at that and in speaking to the Business Council of Australia, they said, ‘Well, this will be passed on. The customer will end up paying this’, and again I kind of thought, ‘Well, okay’, because not a single one of us has not been affected by mental health. Not a single one of us has not been desperate to find a service or to help someone find a service and not been able to find that service. So again, no-one has presented another solution.
Now, I do have one other solution, and that would be to look at the expenditure—and the incredible increase in the expenditure—of our prison system.
Since this government came to power it has spent over $4 billion on major projects in the prison system, and sadly the more we build—you know, ‘Build it and they will come’. That could not be more true with our prisons because we are now at almost 95 per cent capacity in our prisons. We are now going to have to build more prisons. We are projected to spend another $2.6 billion on our prisons. We will be spending a billion dollars on a new prison in Geelong, $400 million on a new youth justice facility and $190 million to put more women behind bars, so unless we change our strict sentencing system, we are going to keep spending billions on prisons.
As we saw in lockdown, as we are seeing now and as the Legal and Social Issues Committee heard in the spent convictions inquiry and will hear no doubt as we start embarking on our justice inquiry, we have an arms race on bail laws. Our bail laws are illogical, but it seems that one government tries to get above the other and tries to be more draconian than the other. Of course some people should go to prison, but it is ludicrous that as the crime rate has gone down our prison rates have gone up. We know this is because we are putting people into remand for short periods of time, not where they can seek rehabilitation, not where they can get into treatment, and in fact it has actually worsened our recidivism rates. You know what the real kicker about this is? That 53 per cent of the children in our prisons have mental health problems—diagnosed mental health illnesses—61 per cent of the men in our prisons have mental health illnesses and 65 per cent of the women in our prisons have mental health illnesses. If someone was to say to me, ‘Fiona, the solution is to stop building more prisons and to stop sending non-violent offenders to jail’, I would probably say, ‘Well, that would be very brave of you’, because I suspect the other side of whichever side of this chamber would suggest that would howl them down.
Getting back to the question of ‘How do we find that money?’, I know that I am not going to see a significant change in the way we deal with crime in this state. I know that there are a lot of supporters in here who would like to see alternative versions to incarceration. I hope that the justice inquiry investigates alternatives to incarceration, because, as I am laying out, we are spending billions and billions and billions of dollars on incarceration and half the people in those prisons have mental health illnesses.
So how do we find this money? If someone had suggested—as they did—that the Medicare levy be increased to recognise the national problem we have with mental health, I think most Victorians, most Australians, would have supported that. I think that would have been sensible in recognising and trying to reduce the stigma and discrimination around mental health by saying it is like physical health and it should be treated in the same way. It is not, but it should be. I hope for a day when a federal government will recognise that and will actually see funding mental health services as as crucial as funding our physical health services.
This payroll levy will affect 9100 businesses in Victoria. I am not a fan of payroll tax. I remember the days in the 1990s when Prime Minister John Howard said that with the introduction of the GST we would see the phasing out of payroll tax. That never happened. But I appreciate that state governments have very few levers to generate revenue, to generate income for their state. A payroll tax is one way to do that.
Now, some people say that we should have broadened that payroll tax and in fact every business should pay a payroll tax. Again, I would say that it is probably a very brave government who would suggest that more businesses pay payroll tax. In fact in this bill we are seeing an increase in the threshold of payroll tax so less businesses will be paying payroll tax, but certainly those at the top end will be paying a levy to help specifically fund our mental health.
As we know—and this was stated in the royal commission’s interim report—the economic cost to Victoria of mental health illness is $14.2 billion every year. This is $4.8 billion in lost wages, equivalent to 1.1 per cent of the Victorian economy, and $1.9 billion a year in cost to employers from lost productivity and workplace injury. When we think about the suicide rates and the cost to our families, why wouldn’t we be jumping up to say, ‘Let’s find the money to pay for this. Let’s do this’? The opposition were quite vocal in the media saying that they were going to lobby the crossbench to oppose this increase, and certainly I have received some correspondence on this, but no-one provided me with a solution of how they were going to pay for this and how they were going to turn around the $14.2 billion that we lose due to mental ill health by trying to spend $4 billion—and it is not $4 billion that this will be raising.
Despite all this and even speaking to the business council, we are still competitive in payroll tax. We are still in there. When you look at the increase in the threshold, when you look at the discounts to regional businesses in Victoria, overall Victoria still sits very modestly in the payroll tax—
Mr Ondarchie: And you’re okay with that.
Ms PATTEN: I am not a fan of payroll tax, and I will reiterate that. I would have liked to have seen the federal government, when they introduced that GST back in the 1990s, say that we would start to move towards getting rid of some of these types of regressive tax. However, when we are losing $14.2 billion every year to mental health illness, we need to do something. We need to turn that around, and we need to work out what levers we can do that with, because the federal government is not interested. So we need to do this at a state level. The federal government has refused to even consider the idea of a Medicare-type levy on mental health.
So how are we going to fix this system? I have suggested closing prisons and not building prisons. Now, I am fairly certain that I do not have majority support for that in this chamber. I know some of my fellow crossbenchers would be supportive of this. But at the end of the day, when I had to weigh this up and I had to consider, yes, the regressiveness of an increase of payroll tax versus the cost of doing nothing for mental health in this state, I came down on supporting us doing something and supporting us finding a specific funding stream, a dedicated stream of funding, for our mental health system that will build a better system going forward, that in the end will make us all the more productive and that in the end will positively affect and impact on our economy. It will also help the $1.9 billion lost to employers in lost productivity and workplace injury.
I would briefly like to also thank Dr Bach for having a conversation around exempting universities from this payroll tax levy. I thought it was a well-considered position, and actually I took it to the Treasurer to discuss and talk through.
I also had I think a very good conversation with the Treasurer about this, as I did with Dr Bach. I think the arguments around this were strong. We know that our universities have been under extraordinary stress over the last 18 months, and that is not going to change. We are not going to see international students coming back anytime soon. But I remember speaking to the vice-chancellor of RMIT some years ago, and he also suggested that their reliance on international students was not sustainable, that they actually had to change that model, and it had to change because they were entering into more and more competition from the countries where they were attracting their international students from. I am not saying that this will provide the catalyst for that, but I did get a commitment from the Treasurer that over the next four years $206 million is going back into universities through the mental health fund. So while we are asking them to pay the levy, we are returning that in even more significant numbers so that they can be part of the solution, so that they can be part of making this state lead in mental health.
I would just like to touch quickly in the few moments I have got on the other parts of this bill. Again, I would like to thank the Property Council of Australia, the Master Builders Association, the Real Estate Institute of Victoria and the many other organisations that did come and speak to me about the concerns about stamp duty and the concerns about land tax. I again listened to them carefully, and I very much appreciated how they came to their position, very much appreciated their concerns. As an MP who represents the inner north of Victoria I am all too aware of the skyrocketing prices and the inability of young people in my electorate to get a foothold into the property market, and as the chair of the homelessness inquiry I am all too aware that we need more homes in this state. Again, how do we pay for that? We all agreed, and in fact it was a unanimous report, that recommendation 1 was build more houses—build more social housing, build more public housing. In fact even when we looked at the individuals who contributed to our inquiry, all of them put ‘governments building more housing’ at the top of their priority list. You can see in numerous surveys that our community wants governments to act in this area. Sadly, we have to pay for that.
Now, I would love to see stamp duty go. I would love to see us move away from a stamp duty system. We are seeing jurisdictions like the ACT kind of wobble away from stamp duty. I do not think they are doing it terribly efficiently, but they are making the attempt. New South Wales last year quite boldly made the commitment to try and move away from stamp duty. Certainly I remember hearing the Treasurer say that this was of some interest and that they would be looking at this. They have not in this budget. But in weighing everything up—in weighing up how we are going to pay for the housing that we desperately need in this state when we have got over 80 000 people on emergency housing lists—now is the time to be building housing. Well, no. In actual fact 20 years ago was the time to be building housing, 10 years ago was the time to be building housing, but we need to do it now and we must invest in housing in this state, and that will cost money.
The property council said now is not the time to do it. There will never be a time to increase taxes, so in weighing this up I will not oppose this. I understand that we need this. Whether I am proven wrong and we see this means people stop selling their houses—the real estate institute put it to me that they will stop selling houses—or property developers stop building houses, I am gambling on this because I suspect that the market will still provide room for them to build houses with a considerable profit.
We have seen extraordinary increases in property values amazingly over the pandemic. Of course we have also seen people who are a pay cheque away from losing their homes. Right now casual workers are not able to get any form of relief—over a two-week lockdown they can get $500 for two weeks, which would not pay anyone’s rent, let alone their housing—and through no fault of their own they are not able to earn a cent. We are seeing people on one hand seeing enormous increases in the value of the homes that they are living in and on the other hand we are seeing other people who cannot afford to pay their rent. So in weighing those up, and I think that is what crossbenchers do, and it is certainly what I do—I do try and weigh these things up—I believe that there is no reason to oppose this bill.
Fiona Patten MP
Leader of Reason
Member for Northern Metropolitan Region
Second reading speech 8/6/21