Legislative Assembly for the ACT: 1998 Week 11 Hansard (8 December) . . Page.. 3282 ..
MS TUCKER (8.50): On the surface, this Bill seems straightforward, extending the sunset clause for the 75 per cent rate for the change of use charge on lease variation to allow time for further study of its effects. But knowing a bit about the chequered history of betterment charges in the ACT, there is a slightly uncomfortable feeling around this Bill.
The history of betterment in the ACT has seen a succession of policy changes in how betterment should be calculated, reflecting an ongoing conflict between those who believe that the windfall financial gains that can arise to landowners whose land is rezoned from one land use to another should be returned to the community and those who believe that these speculative gains are a necessary encouragement and reward to developers.
The Stein report into the administration of the ACT leasehold system which was released at the end of 1995 recommended that the betterment, or change of use charge, be the same across Canberra and that a rate of 100 per cent without remissions should be phased in. The Stein report noted that a general remission system provides a subsidy for development to existing lessees irrespective of its merit and also at the expense of new lessees in the ACT who cannot access such capital gains. It also promotes development in established areas at the expense of locations where unleased land is available, such as around town centres.
The Government in its response to Stein in early 1996 agreed that the change of use charge should be 100 per cent but wanted to allow for remissions in particular cases where it was thought necessary to provide an incentive for redevelopment. However, very soon after the Government's 1996-97 budget, in September 1996, it announced that the change of use charge would be reduced from 100 to 75 per cent as a general encouragement to the building industry. The industry must have done some hard lobbying to get such a quick change in government policy, Mr Speaker. The Planning Minister at the time, Mr Humphries, also announced in a budget press release that the Government had commissioned Professor Des Nicholls, a senior ANU academic, to study the impact of the change of use charge on investment. Note the past tense, implying the study was under way.
The 75 per cent change of use charge was included in the Government's amendments to the Land Act that were tabled in the Assembly in late 1996. When the Bill was debated in detail in December 1996, Mr Humphries let slip that the study had not yet commenced. He referred to the study that Professor Nicholls at the ANU was to undertake. It was at that time that the sunset clause was inserted in the Land Act by Mr Moore. This provided for the 75 per cent change of use charge to apply only for 18 months from the commencement of these amendments because Labor MLAs were not prepared to support a return to the 100 per cent change of use charge, even though former MLA Roberta McRae told the Assembly that it was ALP policy. However, we are now told in the explanatory memorandum to this Bill that the change of use charge impact study was commissioned by the Government, and I quote, "in late 1998". This is about two years after the Government said it had commissioned the study.