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Land Tax Amendment (Foreign Investors) Bill 2022

Cassy O'Connor MP  -  Tuesday, 24 May 2022

Tags: Legislation, Treasury

Ms O'CONNOR (Clark - Leader of the Greens) - Mr Speaker, the Greens have no major issue with the Land Tax Amendment (Foreign Investors) Bill 2022. As Dr Broad has pointed out, it is a bill that is very narrowly targeted at foreign owned residential properties that are not a principal place of residence, so potentially holiday homes that are owned by foreign persons.

I am interested to know why the bill is so narrowly targeted. I guess it is because, as a general principle, if you do not pay land tax on your principal place of residence, then the only way you can secure revenue from a foreign person who owns a residential property through land tax is for it not to be their principal place of residence. So, it is fair in that way. However, I do not think a 2 per cent surcharge on land tax for a foreign investor is going to make a big impact at all.

Dr Broad - They have already paid the duty.

Ms O'CONNOR - They have already paid the duty, sure. Again, it is buying into a market in which, for a very long time Tasmanians could aspire to own their own home. It has been a really big part of Tasmania's culture, to have a family shack. Now when you look at the real estate webpages you can see that this dream is disappearing. In fact, the price of what we might loosely call 'shacks' or holiday homes is now so high that if you are a Tasmanian family on a medium or a lower income, a working family who has had a shack in the family for a long time, it would be very tempting to sell it and put it towards your superannuation and then it is over. I believe this is happening more and more. We are seeing the prices of shacks absolutely go through the roof. Some of these fibro shacks are going for in the vicinity of $400 000 to $500 000.

I am interested to talk about Cambria Green. Of the properties that were purchased by Cambria Green Agriculture Development Pty Ltd on one title is the Cambria Estate. I know that that is a residential dwelling. As I understand it, there is at the very least a caretaker living within that heritage property.

Dr Broad - His grandfather. They won't have to pay.

Ms O'CONNOR - Yes, this applies from 1 July 2022 so there is no impact on that. That is arguably a holiday home for at least one of the persons who represents the developers but I gather there is no land tax surcharge there, which I believe is somewhat regrettable.

I thought I might take the opportunity to remind the House about a land deal that the Tasmanian Government and, in fact, both Liberal and Labor parties supported, which has ended up before the Australian Federal Police. There have been a couple of great pieces written in The Examiner newspaper by Nick Clark about this.

Before I was elected, I was invited to have a look at this extraordinary parcel of land at Musselroe Bay by one of the developers or someone who is working with the developers, Mr John Dinkelmanser [TBC 4.15.40] who is probably quite well known, particularly to people in Bass. It is a stunning, vast and beautiful part of Tasmania with a huge homestead on it. When we visited it was in a state of disrepair. The original plan was to strata title that parcel of land at Musselroe Bay. This deal was championed by the then Labor government. Later, when the Liberals came in, promises were made during election campaigns, as I understand it, to further this development, which has turned out to be a massive money laundering scheme.

I will read a bit from Nick Clark's piece. I guess this is a cautionary tale around foreign investment. Nick Clark's article from Friday 29 April this year:

A Musselroe Bay property, once earmarked for $185 million eco-tourism development, has been conditionally sold to a Melbourne firm, despite its seizure by Australian Federal Police in 2019. County Court of Victoria documents show the 1473-hectare property was part of a $17.3 million worth of property seized by the AFP in October 2019.

The property known as Icena Estate has been sold by Resort Development Tasmania to a Chinese-born Melbourne businessman Zhiwei Huang under an arrangement overseen by the court.

A spokesperson for Mr Huang's company DCF Musselroe Bay Pty Limited has spoken positively about the development which the firm claims has a perpetual development application from the Dorset Council.

That is interesting, isn't it? A perpetual development application over a large part of arable land.

Dr Broad - There is no such thing.

Ms O'CONNOR - I am very interested to know what a perpetual DA is, but according to the developer, that is what they have.

The Australian Federal Police Criminal Assets Confiscation Taskforce seized Icena and several Melbourne properties, alleging they were bought by Chinese nationals laundering the proceeds of crime. The AFP investigation titled Operation Gethen, followed a 2017 request from the Chinese Ministry of Public Security for assistance to identify the two Chinese nationals.

The interesting extension to that article is the role that the Tasmanian Government played in giving visas to money launderers. The following day, 30 April, Nick Clark writes in The Examiner:

Chinese-born nationals associated with a $5 million Tasmanian property were helped in their bid to get permanent residency visas by the Tasmanian Government before the Australian Federal Police seized the property over alleged money laundering.

It talks about the property again and then the quote from the AFP media release says:

The AFP alleges that the two Chinese nationals moved about $23 million of fraudulently obtained funds from China since late 2012 with the proceeds of crime used to purchase or redevelop properties in Melbourne and Tasmania.

Back to Nick Clark:

It is understood some of the Chinese-born nationals associated with RDT received authorised Australian visas despite a proposed $185 million development at Icena Estate never going ahead.

These visas are the Australian Business Talent visas that allow people to establish a new, or develop an existing, business in Australia, stay in Australia permanently and bring family members with them. The applicant must have assets of Australian $1.5 million, be nominated by an Australian state or territory government and be invited to apply for the visa:

In 2014 …

What do you know, the Hodgman Liberal government:

… the Tasmanian Government representatives met Chinese-born people associated with $185 million development proposed for Icena Estate in the north east.

While the development never proceeded, it is almost certain that people associated with the development were among the 40 Chinese nationals nominated between 2014 and 2019 - and, of course, Mr Speaker, that would have been through the Department of State Growth and the Office of the Coordinator-General. Again, we are suckers. We show ourselves again and again to be suckers for a bit of money and big promises. Here you have the Tasmanian Government with egg all over its face for giving golden ticket visas to money launderers who are now the subject of investigation by the Australian Federal Police.

What that tells us is that there is almost zero rigour in the process of recommending people for golden ticket visas by the Department of State Growth. All they have to do, apparently, is point to the potential for some money, somewhere - millions, $1.5 million that they have to their name. But it turns out that this was a mighty scam identified by the Chinese Government, so you had criminals buying vast tracts of Tasmanian land and being given recommendations for a golden ticket visa - so, recommended by the Tasmanian Government - and the visas granted by the federal government.

We really need to have some self-respect as a state, and not just think that because some businessman comes in with bells and whistles and promises that they should be eligible for a golden ticket visa, and also not to sell ourselves so damn cheap. We do it all the time, Mr Speaker. We have done it for a very long time.

Tasmanian land, Tasmanian owned, is premium real estate. It is many things as well as that. It is one of the most beautiful wild and unspoilt places and safest places on Earth, and it is premium real estate in an overcrowded and overheating world. There will be more and more pressure on our primary production land, potential residential land and on established residential properties from foreign buyers from all over the place who are looking for somewhere safe to settle, potentially - but also to park their money.

We do not want to send out the message that the Tasmanian Government is a sucker for a sweet promise of development, but that is the message that we have sent out with recommending criminals for golden ticket visas and ending up with sticky egg all over our collective faces.