Legislative Assembly for the ACT: 1999 Week 7 Hansard (1 July) . . Page.. 2058 ..
MS TUCKER (continuing):
What I a saying is that there are some concerns which are very legitimate. Mr Humphries needs to pick himself up off the floor. The Labor Party has raised some very legitimate concerns. I have already stated the same concerns in the estimates process. The increases in rating factors that are incorporated in this Bill have been established to ensure that overall rates revenue increases by 2.5 per cent. I think it is reasonable that rates revenue rise over time to match increases in the consumer price index.
However, like Labor, I am concerned about the impacts of these rates increases on individual householders and about ensuring that the rates increases are equitable. In particular, I am concerned that the fixed charge component of the rates is increasing faster than the overall rates amount. While overall rates revenue has increased by 2.5 per cent, the fixed charge has been increased by over 8 per cent from $240 to $260. There was a similar increase in the previous financial year. This means that the progressive nature of the rates charge and the differential between the bottom and top rates are being steadily eroded, and that is a concern. I think it is a retrograde step.
The Government says that this is about applying the user-pays principle and distributing costs more evenly across property owners. That is okay to a point, but the Government seems to forget that the user-pays principle has to be balanced against the principles of social justice. The Government is not taking into account people's ability to pay and the principle that those who have a greater ability to pay should pay more to make up for those who cannot. It has been a longstanding principle with rates that those property owners who can afford to live on highly valued land should pay proportionately more than those people in low-value properties.
Because the Government is eroding this principle through increasing the fixed rates charge, so that over time rates charges will be reduced to a narrow band which will proportionately increase the rates for lower income earners and favour the wealthy, I have expressed concerns. I am asking government to take those concerns on board. I will not be opposing this legislation.
MS CARNELL (Chief Minister and Treasurer) (4.52), in reply: I have some amendments to move in the detail stage. I will start by addressing Ms Tucker's concerns and going back to the 1994 scenario, when the Labor Party was in power last. The Labor Party did conduct a review of rates in 1994 and then proceeded to do nothing. Why did they conduct a review? They conducted a review because of an inequity that I cannot believe that Ms Tucker would support.
Rates were not based on people's ability to pay but on where they lived. Consequently, people who had lived for a long period in an ex-government house in, say, Curtin, usually older Canberrans, had rate increases of 60 per cent, absolutely amazing increases, over quite short periods of time.
When we came to government, we changed the increases to straight CPI increases on last year's rates. The Assembly as a whole did not like that much, although it did give people the sort of surety that they needed. We then did a review of rates and spent quite a lot of time looking at a way to produce a rating system that, as Mr Whitecross said, was fair and equitable. It had three components - the $19,000 threshold, the flat fee and the