MEDIA RELEASE

NICK XENOPHON M.L.C.

INDEPENDENT NO POKIES MEMBER OF THE LEGISLATIVE COUNCIL  

16 June 2004

 B & B OPERATORS MAKE THEIR BEDS – AND GOVT LIES IN IT

(and taxes them out of existence)

No Pokies MLC Nick Xenophon in conjunction with the Land Tax Reform Association of SA has called on the State Government to move quickly to stop Bed and Breakfast operators from closing down as a result of crippling Land Tax charges. 

Mr. Xenophon recently asked a question in Parliament, directed to SA Treasurer Kevin Foley about the case of Mrs. Beverley Pfeiffer, proprietor of the Myoora Bed and Breakfast in Thorngate.  Mrs. Pfeiffer established the business ten years ago after her husband died of a terminal illness, and has won national awards for her B&B.  Her guests over the years have included Ruth Cracknell, Kenneth Branagh, and Russell Crowe.

Under current rules if more than 28 square metres are used by guests the property doesn’t meet the criteria of ‘home activity’ and Land Tax is payable on the entire property.  In Mrs Pfeiffer’s case her Land Tax has almost tripled in the last three years to almost $7,000 per year.  Almost two bed nights a week are required for her to break even to pay Land Tax and related charges.  Mrs. Pfeiffer has now put her family home of 25 years on the market for sale because Land Tax charges are just too onerous.

Mr. Xenophon said he has recently received information that only about 10% of Bed and Breakfasts are paying Land Tax, because there aren’t enough State Taxation Compliance Officers on the field to ensure the other 90% pay the tax.  Mr. Xenophon said he “didn’t buy” that excuse.  “It seems to be a case of ‘Monty Python’ meets ‘Yes, Minister’ - even a cursory glance at an SA Tourism accommodation guide sets out the huge number of B&Bs around the State”.

Mr. Xenophon said that if there was more wide spread compliance amongst the B&B industry and other home activities it would mean that operators such as Beverley Pfeiffer could pay a fraction of the tax without the Government losing any revenue.  “In any event having onerous Land Taxes on a Bed and Breakfast operation seems to be quite unfair given the nature of the business.  It also seems incongruous that in the last State Budget there were significant tax breaks for the big end of town, but for small home-based businesses like Beverley Pfeiffer’s the Government handed out zilch.”

Mr. Xenophon has written to the State Ombudsman on behalf of the Land Tax Reform Association complaining about the lack of consistency in approach with respect to compliance.  He is also writing to State Treasurer Kevin Foley urging him to reconsider the position of B&B operators given their importance in the State’s tourism industry.  Mr. Xenophon said he would also be appealing to Kevin Foley to “show some heart” to give “small business owners like Beverley Pfeiffer a break”.

Written and authorised by Nick Xenophon, 653 Lower North East Road, Paradise, SA 5075