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Legislative Assembly for the ACT: 2010 Week 14 Hansard (Thursday, 9 December 2010) . . Page.. 6122 ..

There is a good basis for a betterment charge as recognised by ACIL Tasman, the advisers to the 2010-11 Select Committee on Estimates, who noted:

The CUC has a very strong basis in economic theory.

… True economic rent can be collected by governments for the purpose of public finance without the adverse effect caused by taxes on production or consumption.

The CUC appears to be an attempt to isolate and tax economic rents.

The government undertook to codify the system in response to industry’s concerns and recommendations and I note the Property Council’s submission on the 2009-10 budget.

This task was led by Professor Nicholls and completed through an extensive process of consultation with the community and the stakeholders.

The first report, prepared by Professor Nicholls and Macroeconomics, provides an outline of the proposed approach for implementing codification in the territory. The report includes a cost-benefit analysis of the 2010-11 codified schedules. Professor Nicholls has also made a number of recommendations for government to consider around transition and administrative arrangements.

In preparing his report, Professor Nicholls undertook three rounds of consultation with the community and stakeholders, 14 weeks in total. All stakeholders were provided with the opportunity to provide a written submission and/or discuss their concerns with Professor Nicholls. The Macroeconomics/Nicholls report also includes a summary of the input received through consultation and how the various issues raised have been addressed.

The schedules of codified values have been reviewed by a panel with representation from the Australian Property Institute, the Australian Valuation Office, ACTPLA and Treasury. The panel was chaired by Professor Nicholls and it is important to note that professional valuers have signed off on the schedules.

The other two reports were commissioned to provide expert analysis and opinion on the economic impacts of introducing codification in the territory, including impacts on housing affordability, private property investment, cost of business and profit levels and revenues.

Treasury engaged Professor John Piggott from the University of New South Wales and Professor Dungey to undertake this analysis. The reports I tabled support the introduction of codification in the territory, with transitional arrangements.

Both the experts noted that quantitative and empirical analysis was unable to be undertaken because of the relatively short time the rectification has been in place and the lack of history on changes in the charge rate and suitable data on the market.

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