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Company using bees to avoid paying more tax, says Council

Maha Sinnathamby's Springfield Land Corporation and the Ipswich City Council are locked in a land tax wrangle over almost $750,000.
Maha Sinnathamby's Springfield Land Corporation and the Ipswich City Council are locked in a land tax wrangle over almost $750,000. David Nielsen

IPSWICH City Council and Springfield Land Corporation are locked in a land tax wrangle over almost $750,000.

The council is seething, saying Maha Sinnathamby's company has artificially tried to avoid paying land rates by putting beehives on a block of land and then claiming primary producer status.

Council planning boss Paul Tully said from July last year, 666 hectares owned by SLC at Springfield Lakes and Brookwater Golf Club had been reclassified as primary production land by the Office of State Revenue.

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"This was achieved by bringing in over 1300 native beehives from northern New South Wales," Cr Tully said.

Stingless native bees are mainly used for pollinating crops rather than honey production.

"The primary production classification had the effect of lowering their land valuation from $88.3 million to $22 million," Cr Tully said.

"It reduced SLC's annual rates bill by last year by over $723,000.

"Over 10 years, SLC stands to save over $20 million from the public purse. This cost will be borne by the ratepayers of Ipswich and the taxpayers of Queensland.

"Brookwater Golf Club is the only golf club in Australia officially classed as farmland with native bees ready to pollinate non-existent crops.

"At a time when the Australian honey industry is in serious decline, Maha Sinnathamby has become the richest beekeeper in the nation."

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Last week, Mr Sinnathamby was revealed as Queensland seventh wealthiest man - worth $890 million.

For the 2015 financial year, Ipswich City Council introduced new rating categories in the Springfield region, which significantly increased the rate in the dollar in Ipswich's eastern suburbs.

"This restored SLC's general rates for this financial year to their pre-2014 figures," Cr Tully said.

"SLC has challenged the legality of Ipswich's new rating regime in the Supreme Court claiming it is unlawful and beyond council's powers under the Local Government Act.

"If successful, SLC will not legally have to pay any rates this financial year, which will cost Ipswich ratepayers an estimated $728,000 in 2014-15."

That has the potential to sink the council's next budget and risk forcing the council to dramatically increase its rates.

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In the past, other developers in Queensland have brought in cattle and goats to get primary production status on valuable residential land prior to subdivision to save thousands of dollars in land tax.

But deputy mayor Victor Attwood said what SLC was trying to do was "beyond the pale".

"I think it's absolutely outrageous and unconscionable for Springfield Land Corporation and Maha Sinnathamby to try and artificially lower their rates to their own benefit and to the detriment of ratepayers," Cr Attwood said.

"Generally speaking, over the years, we've had a good relationship with them. "But I think this time what they are doing is beyond the pale.

"It's one of the worst examples I've seen in my 14 years in council of a developer artificially trying to get out of paying rates.

"It's a real money-hungry thing to do in a community where they're trying to build up a good spirit. I don't understand the logic.

"They're going to ruin the relationship with the council the way they're going."

Cr Tully called on SLC to "withdraw their legal action to demonstrate they are good corporate citizens".

"While battling Ipswich ratepayers struggle to pay their rates, Queensland's seventh richest man has discovered a major legal loophole to reduce his annual rates bill in Ipswich by almost three-quarters of a million dollars," he said.

"He has also cut his annual state land tax bill by an estimated $1.3 million."

Springfield Land Corporation declined to comment.

Topics:  ipswich city council, maha sinnathamby, springfield land corporation, tax avoidance




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