Legislative Assembly for the ACT: 2002 Week 7 Hansard (4 June) . . Page.. 1811 ..
MS TUCKER (continuing):
Unfortunately, the ALP has not addressed this issue of inequity, but has actually reinforced this inequity by increasing all rates by the same amount. This approach favours those people living in suburbs of increasing land value because their rates have not gone up to match, but disadvantages people in areas where land values have stayed steady or fallen. The Greens would prefer a much more progressive rate system whereby those people who live in luxury homes are required to pay a proportionately higher level of rates.
The land in the ACT is our major asset and we should not be giving away opportunities to raise revenue from this source in an inequitable way when there are so many demands on the public purse. I accept, of course, that there are difficulties in making our rate system a progressive form of taxation because the value of a property may not be directly related to the income of the people owning the property. One example is where a property was bought some years ago while the owner was in paid employment but is now retired or on a reduced income. The Labor Party, in its election policies, referred to other measures to address this complication, such as a rates deferment scheme and the provision of a rates rebate for long-term residents. I understand that these measures are still being investigated.
I note that the government's amendments are labelled as an interim rating scheme for 2002-03 and will need to be redone before the next financial year. I will give the Labor Party the benefit of the doubt and say that it has not had sufficient time to develop a new comprehensive and progressive rating scheme, but I give notice that I will be expecting to see something better next year.
MS DUNDAS (11.18): As we know, the collection of rates is an important source of revenue for the ACT government, making up over 5 per cent of general government revenue. It is the largest source of territory-imposed taxes after payroll tax. Thus, it is important that we get the formula right to ensure that the taxes we impose on the people of Canberra are equitable and fair and that the taxes fall most upon those who have the ability to pay.
The government has made much of its intention to cap rates at the actual movement in the CPI. It is true that, due to rising land prices in Canberra, leaving the land value percentages as they are currently enacted would lead to a large rise in the general rates imposed on the community. However, because land values are averaged over a three-year period, not all of the rise in land value would be immediately passed on. Secondly, it is usual for the percentage attributed to general rates to be altered regularly to accurately reflect the total appropriation for a particular year, so that an above-CPI increase in land values would be accompanied by a corresponding decrease in the percentage charged for general rates. Both of those factors mean that, despite large increases in land values, the level of rates would not increase as fast as land values have increased.
Furthermore, the government has gone beyond simply capping the increase in rates. It has dictated that all rates will increase by 2.9 per cent, regardless of a rise or fall in land values. Whilst I understand that the actual effect might be small, it is still the case that this bill will mean that some Canberrans will be charged more in rates than they would otherwise. The bill also means that the territory will continue to use last year's average