2 September 2026

Mr GAFFNEY (Mersey) - Mr President, I appreciate the support from some of the members in this place.

First, I want to read into Hansard a letter we all received from the Expedia Group. I need to read this in because that group provided a very good case and it was one that I couldn't answer them. I sent that immediately to the government so that the government would have a chance to put the explanation of that letter and that request into Hansard.

I'm assuming that all members from this place received the same letter, but for those listening online, Expedia Group is an American online travel agency (OTA) and is one of the world's largest travel platforms. Its headquarters are located in Seattle, Washington, and the company has approximately 16,500 employees. The Expedia Group leverages their platform and technology capabilities across an extensive portfolio of businesses and brands they own and operate such as Expedia, Hotels.com, Travelocity, Hotwire.com, Orbitz, Ebookers, CheapTickets, CarRentals.com, Expedia Cruises, Wotif, and Trivago. Fundamentally, Expedia acts as a digital middleman enabling users to search, compare and book flights, hotels, car rentals, cruises and vacation packages in one place by connecting directly to global travel databases and airline or hotel reservation systems.

When we received correspondence from their headquarters in Melbourne, my first thought was this group play in this space, they understand. Then when I read the correspondence, I was then interested to see what the government's response would be to their questions basically saying we believe the government is missing out on funding.

Dear Mr Gaffney

I write regarding the Short Stay Levy Bill of 2026 that is currently at the first reading stage in the Legislative Council -

- well, second reading stage.

It is important to bring to your attention that in its current form, the Bill proposes arrangements that limit the collection base for the levy, and thus results in a much lower revenue collection than is possible. We believe that this has occurred because there is a lack of understanding about how the booking and payment system for short stay accommodation works.

Expedia has encouraged and supported the development and implementation of a levy for many years. We recognise that accommodating visitors has an impact on the Tasmanian community and we are happy to contribute to mechanisms that mitigate this impact. While we believe the levy should have applied across the entirety of the visitor accommodation sector, we have continued to support the introduction of a levy that applies only to short stays.

In saying this, we did expect that the levy would be applied to the broadest possible base in order to ensure it makes the most meaningful contribution to Tasmania. Unfortunately, this is not the outcome that will be delivered if the minor amendment I outline below is not made before the Bill passes parliament.

When people talk about short-stay accommodation, Stayz and Airbnb are the names that come to mind, but it is important to understand that there is another large group of visitor-facing businesses in the sector that takes bookings and collects money directly from those who book short stay accommodation. If these businesses are excluded from the levy, as we understand they currently are, the Tasmanian people are missing out on a meaningful amount of revenue. We cannot see why the Government would intentionally compromise the revenue it can legitimately collect, so we are seeking your views and advice on correcting this oversight.

They continue:

We believe the minor change to the Bill will ensure that the levy captures the majority of the short stay accommodation sector. I refer here to Clause 4(3) of the Bill and suggest that something along the lines of the following would support efforts to collect the levy more broadly. Minor tweaking to clarify the clause, such as 'Where a party makes a booking for accommodation, it is the party hosting the consumer facing platform that is liable for collecting and remitting the levy' would ensure that the levy is collected where payment is made and importantly. provide a larger revenue stream to the Government.

Here is an example to try and illustrate the problem if a change is not made. In many instances, a visitor makes a booking with a local online agent that operates independently of large online booking facilities like Stayz and Airbnb except for the fact that they source their inventory/offering from these larger platforms. When a booking is made, payment is taken directly by the local agent and it is only later that they pay their commission to the larger platform. If a distinction is not made that the levy should be applied to the collector of the payment at the time of the booking, a whole segment of operators will be overlooked and the revenue collected will be significantly diminished.

We'd be pleased to engage with you in more detail and to work with you in putting in place the most appropriate arrangements for the short stay levy that meet the expectations of the Tasmanian parliament, community, home-owners and business and provides the maximum benefit to Tasmania.

As soon as I received that correspondence, I realised that was out of my knowledge base or comfort zone. So, I contacted the government. I said, 'Have you received this letter? I'm going to read this into parliament so that you can respond at the level that people out in the wider community will need to hear why and how Expedia Group should be answered'. I decided to read it in instead of tabling it because I think it's important that people understand. And, as the government says, they're trying to collect funds for housing or for first-home owners, yet this group is saying we're not collecting the amount of money that we should be

collecting and they operate in that space. So, I would understand and appreciate a response to that concern.

Now for my speech proper. This legislation has been a difficult one to consider because, while the housing crisis is undeniable, Tasmanians deserve to see an approach that addresses the issue, is balanced and minimises negative impacts.
This legislation feels to me like it is too little in the right direction, too far in the wrong direction. The policy direction the government is taking appears a risky, poorly thought-out attempt to score popular political points.
The key concerns are with its operation, its intention and the potentially detrimental fallout that it could have for the tourism industry. Of course, I can appreciate what the government and those in favour of the legislation are trying to do, Mr President. However, I find myself tentatively opposed to it, given my serious concerns with its operation, likelihood of success and its associated risks.

The bill represents a hesitant attempt to correct a course on the housing crisis. To my mind, there are other, more appropriate measures that the government should consider ensuring adequate housing supply.

Looking to the experience of other jurisdictions also highlights the risks which come with such levies and considering the proposed substantial changes to the local government authority fees in this space, I do not feel that the state government is acting in unison with other regulators. Indeed, there is a large amount of 'double dipping' in the policy space, from federal legislators changing investment tax laws, to state changes to building policy and levies, and local changes. Cohesive policy-making to optimise outcomes and reduce industry risk is a requirement for successful policy, Mr President.

I will address these concerns in more detail later. However, I suggest that there is substantial risk with this legislation, and the bill does not appear thoroughly considered. Instead, it appears to me that it was put forward by the government so that it can say, 'look at what we are doing' and to divert any blame from prior inaction and current housing construction timeline issues.

As we're all aware, the housing crisis in Tasmania and Australia more broadly is a challenge. Tasmanians are currently facing higher costs of rent, difficulty in affording and purchasing homes due to their prohibitive cost, and higher cost of living. Each of these issues is either caused or exacerbated by the housing supply issue.

People have suggested that it's a case of simple economics: not enough houses are available to service a growing demand for them. As such, prices rise, which flow on by increasing repayment cost and borrowing requirements of new mortgages. This then increases pressure on the rental market, with real estate owners increasing rental properties to squeeze both residential tenants and businesses. In terms of businesses, this then flows on to increased business overheads, which inevitably is passed to the consumer as cost-of-living increases. Many people would agree that this is a problem, Mr President.

Of course, there are several factors which influence this supply and demand equation. A few of these issues are as follows:

• houses not being built quickly enough
• local and state planning policies
• state and federal incentivisation of investment and property hoarding over new property owners
• lack of trade workers to meet the demand.
To my mind, there is a cohesive policy failure across a local, state and government level which is resulting in cost-of-living, cost-of-housing and cost-of-real-estate pressures. This is a very real and very painful issue for many Tasmanians, especially those on the lower end of the economic and financial spectrum, and it's important to recognise that it does not stem from one single problem.

I'm of the view that such a cohesive policy failure needs an equally coherent plan of action, across all levels of government. If the different layers of government do not work in unison, they will inevitably work against one another, overcorrecting or undertaking counteractive policy measures.

Mr President, I should take note and make clear my appreciation of efforts by the Tasmanian government to address the housing issue. It is not an easy matter to approach. Rather, its rectification will take time, investment and commitment to a course of action that may not pay off immediately. This means not always making the politically attractive decision, staying on your path despite other, equally attractive priorities. However, the government has been at the helm of this ship for quite a while. Housing is not a new issue.

A few policies that spring to mind as notable examples of politically expedient policies are commitments to and investments in new builds, as well as changes to incentives for builders. These approach the housing crisis from the supply side, encouraging jobs, economic growth and expenditure on local Tasmanians. There is a minor risk beyond opportunity cost, and the benefit of more housing far outweighs any such cost.

It should be acknowledged that the government has stepped up its efforts in approaching the housing crisis in the last two years, even efforts to improve the rights of tenants and address cost-of-living support in bandaging the outcomes of the housing crisis. All of this, and undoubtedly more, will be necessary to catch up to the efforts of other states, but nonetheless it is recognised.

Mr President, there are several serious risks to this proposal that I would like to expand. I'm happy to hear from the Leader to address these risks. It is, of course, a politically attractive idea, unfortunately almost populous in nature: the easy pitch for this legislation is that we should tax those greedy business owners who are constricting the long-term rental market for the short-term gain of a short-stay property.

However, Mr President, the reality is quite different to such a short-sighted analysis, especially in Tasmania. In Tasmania, the make-up of short-stay accommodation providers is different to metropolises such as Melbourne, Sydney and Brisbane. We should be careful not

to degrade our debate in this place by dragging in concepts, stereotypes and concerns that are prominent in the mainland narrative, but not so much here in Tasmania.

Mr President, many of the Tasmanian short-term property owners are sole trader businesses, 'mum and dad' property investors if you will. These are not wealthy land barons, nor are they corporate landlords. This is particularly apparent in regional Tasmania - as I can vouch for in my own constituency of Mersey - some are, with blood, sweat and tears, trying to plan a future.
It is worth noting that those concerned about the legislation have written to me with reasonable and middle-ground approaches to implementing this legislation more effectively. They have not overlooked the problems it is trying to address; they are actively attempting to support the bill in approaching the housing crisis. There is a disappointing irony to the fact that the people who stand to lose the most from such a tax are trying to help the government implement it properly, because the way they are proposing is so poorly thought out that it will hurt them even more than it should. For example, a concerned farmstay operator from Cradle Mountain wrote to me:

What I am asking of you as my local Independent Legislative Council representative is as follows:

• Ask questions now of the Government as to what the policy intent is and once this is clarified, seek a more appropriate mechanism for achieving this particular outcome.

• In the case that policy outcome is to increase housing supply - ensure that Tasmania's small accommodation businesses - particularly those in the agritourism and eco-tourism sectors are clearly exempted from a levy that seeks to contribute to solving an issue that is not of their making or anything these businesses can influence in much the same way as a large-scale multinational hotel that is currently exempt.

It should also be noted that for these operators, it is not an incredible wealth of profit they are making, but it is a figure that means a lot to an individual income. Take Hobart average Airbnb revenues, for example. Online information on average revenues ranged from $20,000 to $40,000 annually per property. Most owners had only one property. Taking a 50 per cent profit margin, which is incredibly high when considering many properties will be subject to mortgages and significant expenses, the profit is $10,000 to $20,000 annually.

This is a great boost to an average Tasmanian's income, but it does not represent multi-million extraction of wealth like some seem to believe.

The picture that is being painted by these statistics is that Tasmanian short-stay operators are primarily small-scale operators who reside in Tasmania. They do not make an obscene profit, and a significant reduction in demand for their product would inevitably put a good few of them out of business. The people whose incomes we are threatening are not corporate property merchants or land barons. Rather, they gain modest revenues from tourism and visitation in Tasmania while providing a unique service and encouraging a tourism ecosystem.

Indeed, short-stay accommodation in Tasmania reinforces the uniqueness of our small island state. There is a quirkiness to many of the short-stay accommodation offerings in Tasmania.

As an aside, because it's getting a bit dull, Mr President, for my wife's 50th birthday we travelled to King Island as Mel had never been there, and we stayed in a lovely quirky accommodation place that I picked out called 'Sea Witch'. In my defence, Mr President, it was the only place left - a happy birthday keepsake for Mel and a humorous memory for me.
I would estimate that a strong majority of those who reached out to me with concerns regarding the levy in its current form were operators of farmstays and similar accommodation. They were not in staunch opposition to solving the housing crisis, as some would have you believe, but rather they were concerned about the unintended consequences of this and the impact it would have on their viability and their livelihoods. For example, as mentioned by the honourable member for Launceston, the owner of Curringa Farm wrote:

Expecting rural properties to solve Tasmania's housing crisis is totally unreasonable. Accommodation on farms takes place in purpose-built cabins, heritage cottages, or modern glamping infrastructure - most of which cannot realistically house a renting family long-term. Those that could are located far from service centres and public transport, making them entirely unsuitable for low-income tenants. Taxing or releasing agritourism accommodation will do nothing to alleviate the urban housing crisis.

What it will do is place financial and operation duress on family businesses that are already diversifying their farms to sustain income, support future generations, care for ecosystems and reduce pressure on natural resources - all while actively supporting the tourism industry's goal of dispersing visitors into regional areas. This flies directly in the face of the T21-T30 Visitor Economy Strategies, which the Government itself prepared and in which no mention whatsoever is made of a Short Stay Levy. The 2030 Visitor Economy Strategy was built on expanding accommodation supply, growing regional dispersal and supporting agritourism and farm-gate experiences as core brand pillars. The SSL was designed with none of that in mind - it emerged from a housing policy conversation, not a tourism one, and was never road-tested against the strategic framework that both government and industry jointly committed to. The flow-on consequences extend further.

By taxing rural accommodation toward closure, the levy will reduce the availability of worker and contractor accommodation critical to rural renewable energy projects, seasonal harvesting, and backpacker accommodation for tourism employees working in the very hotels and motels that are exempt from the levy. Urban businesses and corporates will then purchase available rural homes for longer-term staff accommodation, removing those properties from the local rental pool for rural families and employees - and potentially transferring ownership interstate or offshore, further eroding rural communities.

They went on to say the debate around using second homes for short-stay accommodation in cities has been ongoing, and they understand the government's desire to address it.

However, due to an ill-informed definition, farm stay and agritourism accommodation - by default - is not considered a hotel, motel, bed and breakfast or caravan park, and therefore falls inside the levy. That is a critical design flaw. It also requires clarity around what 'Airbnb' actually means in this context - is it a generic term for all short-stay accommodation, or correctly understood as a single OTA platform for individuals to let out properties, regardless of whether those properties are also listed on other OTAs, engage in trade relationships, or take direct bookings? I suggest this proposal be suspended until there is genuine clarity on whether this is a housing measure or a tourism policy - because right now is functioning as the latter while being sold as the former.

Mr President, I would like to discuss the short-stay accommodation industry's most symbiotic nature with the visitor economy in Tasmania. I am concerned that any damage to the short-stay accommodation industry's, competitiveness in the Australian tourism market will damage the visitor economy on which we rely. In the 2024 calendar year, tourism contributed to 10.8 per cent of Tasmania's GSP, to the tune of $4.5 billion, the highest proportion in Australia.

Key selling points of Tasmania are as follows: the scenery and opportunity to engage with beautiful landscapes and nature, the affordability of the Tasmanian experience and the Tasmanian brand of food, wine and other such quality offerings. Tasmania leverages these to provide one of the best tourism offerings in Australia, and short-stay accommodation specifically benefits our competitiveness using these positive factors and aspects of our lifestyle.

Short-stay accommodation is not just intertwined with the tourism of Tasmania through providing a place to stay for visitors, though of course this is not a small portion of its role. Short-stay accommodation provides direct and immediate access for visitors to experience the scenery and nature that Tasmania has to offer. Many short-stay accommodation areas are located where a hotel or traditional accommodation would not be viable, or they differentiate their product by directly involving the customer in Tasmanian scenery. Take Domescapes, for example. This accommodation gives tourists an opportunity to live among our famous Tamar wine route. Customers get direct access to the views and the Tamar area, as well as being able to try a range of premium Tasmanian-made products.

This style of short-stay accommodation businesses also benefits tourism affordability and thereby accessibility. The availability of short-stay accommodation across the entirety of Tasmania allows tourists not to have to constantly manage their 'base of operations' in one of the major Tasmanian cities. There's no requirement for constant day trips back and forth from Hobart, Launceston or Devonport. Rather, tourists just come to where they want to be. This promotes effective use of their money, making the background cost of travelling and getting to Tasmania cheaper, allowing them to spend on more Tasmanian experiences. This spreads revenues across the state, helping to prop up local businesses and communities.

It's disingenuous to portray the modern short-stay accommodation and traditional hotel industry as the same, though many people do to minimise the impact that a hurting short-stay industry will have on Tasmania. While there may be overlap, they are substantially different offerings in the placement within local tourism economies and ecosystems.

For this reason, the inception of modern short-stay accommodation has been transformative for our visitor economy. Many of these short-stay accommodation offerings either directly leverage a Tasmanian food and wine experience or work alongside nearby Tasmanian tourism hospitality offerings. This creates an entire ecosystem which benefits from Tasmanian visitation, allowing small operators and local industries to participate in and reap the rewards of a greater concentration of tourism nearby.

It is undeniable that the existence of short-stay accommodation across Tasmania benefits the Tasmanian tourism and visitation industry. It cannot be stressed enough that this is not simply by way of providing 'a place to stay' for tourists; rather, it's an entire ecosystem which benefits our economy, promoting tourism expenditure not just in our capital city but across the entirety of Tasmania.

This is an important consideration when we discuss making short-term accommodation more expensive. Moving back to simple economic principles: if we make something more expensive, less people will consume it. Following this logic, if we make our short-term accommodation more expensive, we'll more than likely price out a portion of tourists. Tasmania offers a great opportunity for the family to experience a holiday in a beautiful, scenic and relatively safe place, which we will be making less accessible.

It is a common idea that traditional accommodation will make up for this cost-driven shift in demand. Of course, economists refer to this phenomenon as price elasticity. Price elasticity is the concept that if a good has a high price elasticity, consumers will easily move to another similar good. What happens, though, if a price goes up for all similar goods and the next closest goods do not offer the same utility or value to the consumer? Assuming the good is not a necessity, the net demand for the good decreases due to increase in cost. Of course, vacations are not a necessity.

When we bandy about taxing accommodation providers, we risk such a decrease in demand. In the case of short-stay accommodation, these taxes will get immediately passed to the consumer, as they have been in Victoria. The consumer will then face a higher price across the entire market of short-stay accommodation properties.

As I've discussed, short-stay accommodation has significant advantages in the Tasmanian visitor economy over traditional hotels. It is uniquely positioned to benefit the visitor experience. Economists would refer to this as a difference in utility. The service of providing a short-stay accommodation has a higher utility to the consumer than a hotel room. Therefore, as the goods are different, they do not have high price elasticity. As I've discussed earlier, this means that people are not likely to move to hotels or traditional accommodation; rather, they will leave the Tasmanian tourism market entirely, reducing demand.

This reduced demand is in the form of tourism to and within Tasmania. Then what, Mr President? We will see less tourism activity and spend in Tasmania. We will see a squeeze of not just the people who own the short-stay accommodation, but a squeeze of the entire ecosystem in which they operate. Farms, food producers, wineries, alcohol producers and cellar doors, local grocers and wildlife industries within Tasmania will all lose out, just to name a few. This will not only impact overall tourism revenues but will be yet another factor pulling economic activity away from our regional and rural communities. Some tourists will be lost, not to come to their chosen destination at all. Others will choose to go to the next most comparable accommodation for the cheaper price than what the short-stay accommodation has

been raised to: a hotel. They will then more than likely go to a population hub such as Hobart or Launceston, and regional areas will see even less tourism spend than we already do.

This is my key concern with this policy proposal. It is a dangerous thing to tax an industry which drives your economy. It is risky to increase costs on something that is not only an economic driver, but one which already competes directly with other states. Visitors can choose to go somewhere else if it is too expensive to come to Tasmania.
Whilst something must be done to rectify the housing crisis, this proposal should be weighed in the following terms: its realistic impact on the housing crisis, and the likelihood and severity of the downturn to the tourism industry that it may cause.

I'm not an economist and I do not pretend to have a model of the tourism economy and the impact that a few per cent tax will have on it. Nevertheless, the impact that it will have must be considered. There is little information on this in Tasmania as, of course, it would be counterproductive to the government to produce such modelling. Meanwhile, no other parties have the resources or access to government resources to easily do it. I note that the government should be entirely transparent with its calculations and impact modelling when introducing new taxes to Tasmania. It does not make sense to not be transparent, and yet here we are.

The government states this levy will not impact demand, despite providing no evidence or economic analysis that indicates that. They reference that it has not in Europe or North America, where similar levies exist. Even if this were true, I put to you that we are not America, we are not Europe, and Tasmania has an entirely different visitor market.

Tasmania already has significant barriers to visitation, being an island state. People need to fly here or come via the Spirit of Tasmania. Of course, it would be easy to discuss how the TT-Line fiasco has shown a failure in the government to better approach to these barriers, but I would be digressing. Flying or taking the Spirit to Tasmania is no small endeavour when compared to hopping in the car for a couple of hours. It costs more, takes a lot more effort and is more difficult for families. This is a significant barrier to our interstate and international visitation. Bass Strait, while protecting us to some degree, also adds an extra financial burden to those considering time in Tasmania.

Now add to this the idea that while demand short-stay accommodation may not be as price elastic as proponents of the bill make it out to be, tourism demand is very price elastic. People can easily go elsewhere if it is easier and cheaper. Moreover, tourism and visitation are extremely sensitive to fluctuations in price. This is demonstrated in real terms by the fact that in times of economic downturn, tourism is the first to go and the last to come back. COVID-19 was a fitting example, or the empty flights now. Tourism is specifically sensitive to fluctuations in price as people think 'we will just stay home or do something closer to home'.

Following this logic, if we impose our geographical barriers and add a 5 per cent tax, what happens? It's more than likely that there'll be a demographic for whom it is simply too difficult at the given price to make it to Tasmania. These people will just go elsewhere or stay home. It's not like there is no competition for beautiful places in Australia.

The average visitor spend per trip in Tasmania is $284 a night per person, for an average of about 10 nights. If $200 per night of this is spent on accommodation, then the 5 per cent tax would impose $100 extra in cost per person, for no benefit whatsoever. This is the best case as

it does not include the costs in administration and effort that will also be passed on. This best-case analysis would result in a 3.5 per cent increase of the entire trip; $100 per person is enough to make you think why not travel and visit closer to home?

Not to mention that Tasmanians are expected to pay about 20 per cent of this tax. We will be disincentivising people from travelling within our own state. As one concerned Tasmanian wrote to me from my electorate:
The Treasurer has indicated that approximately 83 per cent of levy revenue is expected to be derived from interstate and international visitors, with around 17 per cent attributable to Tasmanian residents travelling within their home state. On projected revenue of approximately $11 million per annum, this equates to roughly $1.8 to $2 million borne by Tasmanian households. In practical terms, this means Tasmanians will contribute to the levy when holidaying within their own state, and intrastate travel costs will increase accordingly, a consideration that sits alongside broader tourism impacts in the context of ongoing household cost pressures.

In this manner, we can also think of the levy as quite regressive. In other words, it targets poorer people. Wealthy people will not shirk at 5 per cent more in their accommodation costs, while those who live closer to the poverty line will think twice about coming to Tasmania.

I should be careful to state at this point that I'm not even asserting that this reduction in demand will be a massive drop. Even if we see 0.5 per cent of our visitation drop from a
3.5 per cent increase in travel costs, we will lose significant revenues. A 0.5 per cent drop of visitation spend in 2024 would have lost us $23 million in direct and indirect economic activity. Contrast this with the proposed tax revenue of $8 to $11 million per year. In this scenario, we would be reducing our net economic activity by twofold the revenue of the tax. Do those in favour of this legislation honestly believe that it will not discourage 1 in 200 visitors from coming to Tasmania, that it will not just result in one person in every 200 from going elsewhere? In this economy, a 3.5 increase on a multi-thousand-dollar trip is nothing to sneeze at. I find it hard to believe that this tax will have no impact on visitation. I find it an incredibly risky thing to do.

What else demonstrates that there will be a drop in visitation revenues? That proponents of this bill even think that it will reduce short-stay properties in Tasmania. Taxes do not get paid by the producer of a good or service, they get passed on to the consumer. This will not cost the average property owner more; they will pass the levy on. If it works to reduce properties on the market, it's because it has reduced demand for said properties, thereby squeezing out property owners.

Victoria is a prime example of these risks. Not a European or North American example thousands of kilometres away, an example from next door. In Victoria, the same levy is both failing to deliver its housing promises and putting operators out of business. Mind you, the operators who are sent out of business are 'mum and pop' style businesses, for whom it is not worth carrying on. The corporate interests who operate at scale in Victoria continue to do so, passing on higher costs to the consumer and damaging visitation spend along the way. Interestingly, it is reported by the ABC that the short-stay rental guest nights in Victoria have declined by 0.6 per cent, while the Australian more generally has grown at a strong rate. On the other hand, the levy has raised $86 million while reducing GSP by $63 million, impacting

over 500 jobs and hurting regional areas specifically. Tasmania is even more reliant on its tourism as a portion of its income and will be hurt disproportionately more than Victoria.

In my discussion, and in the discussion of many other submissions it is noted that the levy will raise money. In Victoria it raised $86 million. The problem with this framing is that levies do not raise money; rather, they artificially increase prices and distort markets away from proper efficiency and transfer a portion of the money that would already be made without them to the government. They do not reproduce value; they just transfer it to the government. Meanwhile, they directly reduce economic activity through this market distortion. In this way, they do not benefit our economy, just our government's bottom line. Rather, they actively harm our economy.

This is the crux of the problem I have with such a bill. We are imposing a tax on the production of the most valuable import that Tasmania has - its visitor economy. In enacting the bill, the government might dislodge some tourism operators, but that is a cost to Tasmania in itself. The most critical concern is that this cost will not outweigh the supposed benefits, of which I'm sceptical.

On that note, I'd like to move to the other side of the risk equation - the purported benefits of the bill. While the government has not been exactly consistent in its messaging, it promotes the bill in two ways: revenue raising and reducing the housing crisis for first-home owners. In terms of revenue raising, it will be a mere $8-11 million per year in tax revenue, and we've heard even less in recent figures, inevitably to be counterweighted by any drop in economic activity caused by such taxation. This is nothing to our budget; it is about 1 per cent of our projected operating deficit for 2025. It is about 0.1 per cent of our annual spend, and it is a drop in the ocean of our total state debt. We don't need $8 million, we need $800 million. Of course, I can name two recent expenditures where we might be unnecessarily spending such a figure.

As Tim Parsons of Curringa Farm astutely wrote to me:

On the numbers: $11 million in annual revenue is negligible against the housing challenge. According to Treasury's own budget figures, it represents less than 13 days of housing expenditure at the budgeted annual pace - or roughly 75 days of the Homes Tasmania annual allocation. Meanwhile, STAAA has demonstrated that the headline 5% figure will compound to approximately 10% in practice once platform commissions, service fees, administration, and tax compounding are factored in - costs that must be either passed to the visitor or absorbed by the operator.

So yes, it might bring in a few million that will be reinvested into housing, but this comes with its own questions when examining the number of houses it will bring in. The national average to build a house is $443,000. Add the average cost of land in the cheapest suburbs of Greater Hobart as $45,000 to $65,000, and you have an average cost to provide a house of roughly $500,000. That is 22 houses per year, which we will not even be able to build because our projects are so backed up. We cannot forget the abysmally few builds that Homes Tasmania even got to the finishing line in the last years. Of course, in isolation, one house is better than no houses, but that isn't always the case if other costs are introduced to the equation. And 22 houses is not a large number when stacked up against the very real risk of cost to the Tasmanian visitor economy.

Again, I find myself questioning if those losing their jobs, their community support and their governmental business support would have wanted this outcome, as a result of the stadium build and ongoing fiscal mismanagement. I'm certain the proponents of this legislation will say that the money would instead be better used directly supporting our homeless or those in housing stress. It undeniably would be a good use of those funds, but I put to you that a better use of government revenue in this space would be to reprioritise some of our wasteful spending on stadia, countless government failures in building and development, constant governmental reshuffling and marketing ill-conceived proposals. It's not like the government does not have
$10 million put into the housing crisis without a paltry levy. It is laughable to think that we could have paid this amount 40 times over from the TT-Line blowout alone. Government spending is all about priorities, and this bill meets the priority of making the government look as though they're doing something on housing, at the cost of hurting ordinary Tasmanians. If the homeless and our most vulnerable were the priority, then passing the bill would not matter - they would already have this money.

Moving away from my discussion on paltry revenue that will be raised by this bill, the government also touts it as a solution to the housing crisis. I'm concerned though that the bill will fail to solve anything.

The bill does not appear to be well targeted to promote long-term accommodation. If the primary purpose of the bill is to increase the availability of long-term accommodation, the government has missed the memo by including the potential that non-liveable short-stay accommodation offerings are taxed too. How will taxing a tent, a farmstay or a property that does not have zoning increase long-term accommodation to address the housing crisis?

The short answer is that it will not. Proponents of the bill might argue that the broad coverage of all properties is to support revenue raising, but I refer you to my prior comments on the minuscule revenue already being raised. If we exempted those properties, we might lose six houses over the next two years, which Homes Tasmania will not have managed to get built by 2030, not least because they will have been subject to an unnecessary and wasteful restructure in Building Tasmania.

The bill has been amended to exempt some operators, such as farmstays and direct bookings; however, it still suffers the same issue for other non-residentially zoned accommodation. How will taxing buildings not suitable for long-term accommodation provide more long-term accommodation?

As Craig Badcock from Devonport wrote:

The bill as drafted would impose a 5% levy on short stay income from properties that could not be used for residential purposes. The bill as drafted would also impose a 5% levy on income that is derived from the broader property and not just the house.

Craig's provided three personal examples, and I think that's very good of a person who works in that space. He gave an address in Formby Road in Devonport.

We purchased and extensively renovated [a] former backpackers' [place]. It contains 7 rooms all with ensuites and common breakfast, lounge, and commercial kitchen facilities. Breakfast is included with the room rate, but

there's no exclusion from the 5% levy as we don't live on site. In fact, we are prohibited from living on site. The property is zoned 'Commercial' and residential use is prohibited.

Their property in Shearwater Boulevard, Shearwater:
We purchased and extensively renovated this former doctor's surgery. The property was vacant for most of the preceding 10 years. It contains 5 rooms, a pool room and a hot tub. The property is zoned 'Local Business' and residential use is prohibited.
1050 Bakers Beach Road, Bakers Beach:

This property comprises 460 ha and is zoned 'Rural'. We purchased the property in 2023 and have extensively renovated the house. The house had no operational electricity and water when we purchased it and had never been used as a permanent residence.

The value of the land, extensive native forest surrounding the house and 20 km of walking track we have constructed, contributes significantly to the value we provide our guests. I submit that it is inequitable and contrary to the intention of the legislation that properties that either cannot be used for residential purposes or properties that are commercial rather than residential in nature should be subject to the levy. The easiest and most effective way to do this would be to exclude short term accommodation properties that are not zoned 'Residential'.

Craig says:

We have invested millions into these properties employing many local contractors and assisting local tourism operators. All three properties were vacant when we purchased them, and none of them had ever been used as a permanent residence (other than 16 Formby Road, approximately 25 years ago).

We employ cleaners and continue to utilise local trade businesses for maintenance. We have all necessary approvals and insurance cover. It is not an option for any of these properties to be used as permanent residences.

Notwithstanding the zoning issue, there is a clear geographic element to these concerns as well. Short-term accommodation in residential housing suitable for long-term housing is more common in Hobart and Launceston than it is in the rural areas. Long-term housing is far more overpriced in population centres. In Devonport, I've heard that short-stay accommodation makes up 1 per cent of the accommodation stock. Why should rural areas be punished by a black-and-white levy to make up for something they do not contribute to? We are taxing the entire state to make up for shortfalls in certain areas. This is illogical. In this line of thinking, maybe this levy is better suited at an entirely local government level, with state input and resourcing to support effective implementation and model correct tax rates. It is also worth noting, reducing demand for a short-stay offering in prime Hobart real estate, such as in Sandy Bay or Battery Point, will not improve the situation for less-well-off Tasmanians. Many city

short-stay accommodation offerings are in expensive areas, not those that will be available for a regular family.

There's a particular obtuseness in the government's inability to specifically apply this tax to those operators who may be taking up long-term accommodation. A farmstay operator from the Central Highlands region suggested to me recently the following:
I suspect the vagueness has been intentionally supported by the platforms such as Airbnb as making blanket collection of taxes is easier for them as there is currently no way to easily monitor or define which properties are not potentially able to return to long term housing supply or could be considered 'responsible for the part of the problem' in Tasmania.

Proportionality, it is a major question in my assessment of this bill. A first question of proportionality is: is the bill proportionally reacting to the impact of short-stay accommodation on long-term accommodation in Tasmania? I suggest that by blindly levying the entire short-stay accommodation market, including farmstays and other accommodation not appropriate for long-term living, the bill will have a disproportionate impact relative to its stated intention of increasing long-term accommodation.

Another question of proportionality: is the risk to our economy proportionate to the benefit we'll have to our society? Given my prior analysis, I suspect that the risk to our tourism revenues is disproportionate to the revenue it will raise or long-term accommodation it supposedly may free up, although I remain unsure as to how it will promote long-term accommodation by pricing out farmstays and cabins in rural Tasmania.

A final question of the proportionality of the bill is whether such a levy will appropriately benefit those urban areas that need more long-term accommodation proportionate to its impact on rural communities. It's been said to me that in Devonport, for example, which has 1 per cent of the total accommodation, meanwhile, it is the gateway for tourism to our state. Should we punish Devonport tourism operators because Hobart needs more houses? I cannot see the logic in that.

Of course, the bill will also inevitably place a burden on operators through red tape. We've all heard the talking points of why red tape reduction is a necessity, or at least desirable, why Tasmania has too much red tape and how it burdens Tasmanian innovation, growth and economic activity. Why is it then that the government continues to increase red tape? This bill will put a burden on smaller operators, not just financially. Are we now trying to reduce the number of short-term accommodation operators by inconveniencing the smaller operators out of the market? Or is it another layer of useless bureaucratic paperwork?

As one Tasmanian short-stay operator wrote to me,

The administrative implications of the proposed merit careful attention. Registration requirements, reporting thresholds and remittance obligations introduce new compliance processes for accommodation providers. For operators over the $75,000 turnover threshold, quarterly reporting may apply; for smaller operators, annual reporting still introduces additional administrative steps. While each obligation may be manageable in isolation, cumulative administrative burden can influence operational decisions,

particularly for small regional businesses without dedicated administrative support.

The implications of direct bookings form part of this broader assessment. Direct bookings allow operators to retain full margin and, in some cases, provide modest price flexibility. Where additional compliance obligations attached to those transactions, it is reasonable to consider how this may influence pricing behaviour and local economic circulation.
Of course, this will not impact the multinationals such as Airbnb, benefiting from the demanding work of Tasmanians. Even if it was imposed on them, they have the resources to deal with extra bureaucracy. On a similar note, corporate interests will not care. The red tape once again just damages small-scale operators.

On that note, it is interesting that the government is unwilling to approach the major companies in this space to wrangle some money from them. Rather than costing out small businesses and damaging our tourism industry, would a better approach not be to license or charge fees to those companies such as Airbnb? These listing companies syphon Tasmanian incomes for little reason but consumer convenience. This would have negligible risk, while providing revenue which we could surely put into public housing.

The monopolisation of the market also results in extensive fees charged by these major companies offering platforms for short-stay accommodation providers. We could address those and replace them with some taxes. That would not change the price-demand relationship and better Tasmania.

Another question I have with the bill is about the cohesiveness with other government policy. Looking at the Hobart City Council's proposed 2026-2027 fee schedule, they've increased their fee for short-stay accommodation by well over 1000 per cent. Add together the proposed levy and the Hobart City Council's fee of $5000 and we'll be looking at
$6000 to $10,000 a year in fees per property.

Ms Rattray - That might change, through you, Mr President, after the next council elections.

Mr GAFFNEY - I'm sure the plan of the government in isolation was to support the reintegration of current short-term accommodation into the long-term market, hence their number of 5 per cent. Unfortunately, they seem not to have consulted with local councils to create a cohesive cross-government vision for the short-term accommodation market. Rather than subtly nudging demand, the result will be to price half the accommodation market out of Hobart.

Of course, proponents of the bill might say that this imposition of excessive fees is good, that accommodation should be long-term housing. However, the fees might not even result in more long-term housing supply. There is every likelihood they will stay empty as investment properties or get sold to corporations that can afford the fees while offering the same short-term accommodation for a higher price. Following this, we will see a higher average price of short-term accommodation in Hobart, which will, once again, result in shifting tourism, thereby reducing the economic activity in the state.

The way I view it is that these attempts to aggressively tax our key industries to stop integral parts of them from going ahead is shooting ourselves in the foot. We will damage our industry, damage Tasmanian sole operators as well as tourism businesses, and it is unlikely it will free up much housing.

Some will have heard the sayings that there are no silver bullets or magic bullets, and this levy demonstrates exactly that. It is a closed, insular way of approaching a cohesive policy issue. While it does give the government and those who support it an easy win to talk about, it does not solve the actual issue at hand. Not just that, but the 'silver bullet' levy risks causing more problems than it solves.
These concerns underpin one key problem with the bill: it does not seem to be well thought out. To list but a few of the myriad concerns I have about its operation: I've yet to see publicly available financial modelling to show that it will actually do as the government claims. It does not make clear its object or the policy objective it is aiming to support. It does not act cohesively with other policies. It does not offer a proper and effective solution to the housing crisis. It does not give any mind to the very real and very possible economic ramifications of the levy. It seems to overlook more appropriate approaches.

While I can appreciate what the government is trying to do, it should come forward with a vision of how to solve issues, not just headlines that will satisfy those who will not read beyond them. It should not impose regressive taxes under the pretext that it has failed to implement progressive policies and continues in this failure to this day. I do not think this legislation is appropriate to remedy the issues Tasmanians face, and I fear that it will create more issues than it will solve.

It also suggests to me that this legislation is just another example of the government foisting public pressure on the legislature to pass its ill-conceived ideas. A constituent felt that it is framing the bill as the solution to the housing crisis without presenting evidence to offset the apparent marginal impact it will have. He also felt that the government is inherently presenting concerned and responsible legislators to the public as naysayers undermining a solution that is itself problematic.

It's been suggested in the other place that this is a forward-facing 'statement of parliamentary intention', as it were. I would argue that the statement of parliamentary intention should come by way of practical and realistic policy. What parliamentary intention will be conveyed by putting through a poorly thought-out bill that results in harming Tasmania more than helps? Given the lack of clarity on what the government wants to achieve with the bill, I would suggest that the only thing parliament will convey to the public by supporting this bill is the government's confusion as to how to approach the housing crisis.

Mr President, I do not enjoy coming out so adamantly critical of legislation which is by all intents and purposes attempting to solve a very real problem. Frankly, the bill is not a proper solution, it does not hold up to the level of review for me to vote in favour of it. It does not represent a whole solution, nor an effective standalone remedy to the housing market.

More importantly, I'm not convinced that a levy implemented in the way that the government is currently proposing will come with positives that outweigh its potential risks. I do welcome other perspectives on this matter, but as it currently stands, I'm unconvinced.

Indeed, we have heard in briefings and also answers to questions in the other place that the only response, reason and information surrounding the 5 per cent figure was that it was the percentage used for the 2024 election policy promise - no modelling, no debate - and that 5 per cent seemed like a good idea as it was less than the 7.5 per cent used in Victoria. It was also a way to support our first-home owner initiative, which was a consistent Liberal party election platform and policy promise around the same time. As we, the state of Tasmania, and currently financially spiralling out of control, and as we are broke as a state because of mismanagement of funds, poor project processes and ever-changing and baffling priorities, this seems like a good way of operating and convincing the person on the street that this will cover the cost of the homeowner initiative. We're not certain if that's the case, as we have not completed any modelling, but we are hoping that it might work. Fingers crossed.

It has been suggested in some correspondence to me that a lower tax would be more suitable. Of course, as I've discussed, amendments to better targeting the bill towards the singular purpose of increasing long-term rentals where they're needed may be appropriate to ensure it's a better solution.

Mr President, it's hard for me to suggest these things without access to modelling and forecasting such as that which I'm sure, or at least I hope, the government has available. There might be a tax which frees up housing without risking as much harm to rural communities and the tourism industry, or a more appropriate definition of that short-stay accommodation which should be covered. Of course, we are not privy to the reasoning of the government nor the likely outcomes of the bill. All we can do is look at the issues of the Victorian attempt and hope that a slightly smaller tax will not damage a far more tourism-reliant economy.

With these concerns in mind, I should note that I am open to hearing further suggestions in this space. I'd like to see a bill that is better targeted, fully considered, and more likely to give benefit than harm. It has been put forward to me that maybe a 2 to 3 per cent levy would be more palatable than the current proposal. I have not had time to discuss that percentage with the operators, nor have I access to any modelling reflecting the differences between 2, 3 or 5 per cent.

I was also quite pleased to read the amendments proposed by the honourable member Huon. I would be supportive of a review process, as well as clarity on the definition of terms. It was only very recently that the government was chastising and bemoaning the primary opposition for trying, successfully, to make a Sunday into a public holiday. Terms such as 'death by a thousand cuts' were thrown around. Business owners and local Tasmanian operators were cited as being very strongly against such a proposal.

Indeed, we heard from the honourable member for Prosser in this place a very touching and genuine input as to the impact and hurt, and real community hurt, that comes from reforms that impact small businesses, notwithstanding their merits. Tourism, hospitality - these industries that are so crucial in our small business environment - suffer for these decisions. It is a very important space that needs to be well managed, as demonstrated by the member for Prosser. It needs to work for the livelihood and lives of very real Tasmanians.

I wonder what has a higher impact on these tourism operators. A public holiday that ups the rate paid for selection of workers on one day or a 5 per cent blanket tax on most of our tourism accommodation offerings across the state? Staffing costs? This proposal will have

labour costs on operators. Operational costs? It's 5 per cent on every offering. Lost customers? A very real risk.

Yes, maybe non-accommodation hospitality and tourism operators will not feel the immediate hurt, but there's a real risk of reduced customers and reduced revenues. How many hospitality businesses, I wonder, would go under if a 5 per cent levy was suddenly imposed on them over the slow period. Too many is the answer. This isn't one day of the year. We are putting significant strain on our operators through all of the year, our summers, our winters, as if they aren't already hard enough; 5 per cent is significant number. It is not a few hundred dollars for one day of the year.
If you want to consider the public holiday bill the thousandth cut, this levy would be the thousand-and-first. To stretch the metaphor, this cut will be much deeper and much more damaging. Of course, that isn't a clear reason not to implement this levy. In all policymaking, some people win, some people lose. In good policymaking, more people win. What is a clear reason to oppose it, Mr President, is the outright lack of evidence, investigation or rational, conscious decision-making that backs it.

It is very inappropriate to create a hostile, hurtful business environment, staunchly oppose a minor change to holidays based on supporting businesses, and then proceed to run poorly thought-out legislation such as this to the risk and detriment of businesses and operators. And for what: $8 million to $11 million a year in revenue that can be wasted on the next infrastructure expenditure, the next government reshuffle? Frankly, it is reactionary politics that risks a lot for very little gain. It is an unconsidered and problematic proposal double dipping for little reason other than to say we did it.

Due to the significant risk imposed by the current proposal to the visitor economy, I will not be voting in favour of it. However, I look forward to hearing the views of other members and from the government and am very open to working constructively in this space.