David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

And wages, as Senator Cameron advises. This bill takes the responsibility for paying the GST away from the builder and developer and puts it on to the consumer.

The problem with this extraordinary departure from the fundamentals of the GST is that the industry is simply not set up to deal with money in this way. Industry representatives have told me that, although they support tackling unscrupulous developers who practice phoenixing, the proposals need further scrutiny and planning. The proposed scheme requires the purchaser to provide one-eleventh of the cost of the new home to the ATO and to obtain a receipt from the ATO prior to or on the day of the settlement of the property. It is unlikely that a bank would fund the GST payment prior to the purchaser having secure title over the property, as it would mean the loan would be initially unsecured. The minister has said that the GST payment can be made on the day of settlement, but at the very least this will require considerable alterations to current practices by purchasers and lenders. Development industry representatives have told me that the only system currently available to process the GST payments by purchasers is for a cheque to be issued and photographed as proof that it has been paid before or on the day of settlement. The PEXA system, an e-conveyancing tool, is available and preferable for dealing with this transfer, but time is needed for the industry to move across to this system.

I'm also assured that this bill will not be retrospective and that agreements made before the proposed implementation of 1 July 2018 will operate under the existing system. That's something at least. Schedule 5 operates under the assumption that shifting the GST to the consumer automatically means it is shifted to an individual who is much easier for the ATO to trace, but consumers are not always individuals. Companies also buy new houses.

In short, the proposed bill has been rushed and will lead to unintended consequences that will put a greater burden on consumers and developers. This bill is an extraordinary overreaction to the rare event that is phoenixing. It uses a sledgehammer to crack a nut. The government seems to want to chase down every tax dollar regardless of the consequences. It is acting as if no tax dollar should be left behind. At the very least, schedule 5 should be delayed until mid-2019 to allow the various parties to adjust their systems. Otherwise, there is a considerable risk that much-needed new housing will not be built and consumers will continue to be priced out of buying a new home.