Legislative Assembly for the ACT: 2010 Week 09 Hansard (Tuesday, 24 August 2010) . . Page.. 3778 ..
MR SESELJA: Thank you, Mr Speaker. Treasurer, how will the change of use tax be dealt with by your mini-Henry review being undertaken by Ted Quinlan? Will it be included? If so, when will the situation be clarified? If not, when will the situation be made clear to builders and homebuyers in the ACT?
MS GALLAGHER: We are moving forward with codification of the change of use charge. This is something that we indicated. Indeed, it was something that industry called for in the budget before last. We are definitely committed to codification. We expect that it will commence in this financial year; we have been certainly indicating that to industry. However, there are a number of pieces of work still underway.
It will be also something that we expect the tax review to consider and look at as part of its overall review of the taxation system. A number of pieces of work will feed into that and be able to be provided to the tax review in its consideration of change of use, but I do not see why that should stop us moving forward with codification. Indeed, the numbers that we have included in the budget—the majority of the increase in the change of use charge as outlined in the budget is to do with rectification, not codification. We are already seeing more money come through change of use after the system was rectified in May.
MR SMYTH: A supplementary, Mr Speaker.
MR SPEAKER: Yes, Mr Smyth.
MR SMYTH: Thank you, Mr Speaker. Treasurer, what charge is ACTPLA currently applying in relation to the change of use charge and on what basis is it being calculated?
MS GALLAGHER: I understand that the chief planning executive wrote to the Australian Valuation Office in May around ensuring that the change of use charge was applied on a site-by-site basis according to the independent market valuation, and that has been in place since early May.
MR SMYTH: Treasurer, doesn’t this continued uncertainty call into question again the budget bottom line, as well as create significant doubts for investment and housing affordability in the ACT?
MS GALLAGHER: No. The change of use charge is not a new charge; it is a charge that has been in a varied form since the 1970s in this place. It is a tax that I think all members have supported through legislation. We are merely applying the law as it was always intended to apply, and that has been that individual applications are considered with an independent market valuation, and then they pay 75 per cent of the added value as part of the change of use charge. That is what the law requires, and that is indeed what occurs. The codified schedules—I think you are mixing up the two issues.
MR SMYTH: No, no, no.
MS GALLAGHER: Well, you are.