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Legislative Assembly for the ACT: 2003 Week 4 Hansard (1 April) . . Page.. 1184 ..

Residential property rating system

Discussion of matter of public importance

MR DEPUTY SPEAKER: Mr Speaker has received a letter from Ms Dundas proposing that a matter of public importance be submitted to the Assembly, namely:

That the ACT's residential property rating system should be equitable, and should ensure revenue growth to match the rising cost of government services.

MS DUNDAS (5.32): I hope that everyone who speaks on this matter of public importance will agree that our rating system should be extended, but there will be some divergent views about what system can best ensure equity. We know there are households that entered home ownership when Canberra's house prices were substantially lower. Some of these people are now struggling to pay their rates following rapid rises in the value of their property. I agree that it would be undesirable for people on moderate incomes to be forced to sell their houses and move because their rates have risen beyond their capacity to pay.

The government has claimed that their decision to cap rates increases to CPI increases during their first term was intended to prevent people from being forced out of their homes. But a blanket measure like this is a clumsy and ineffective way of achieving this policy goal.

The existing rating system is fairly complex. It takes the actual unimproved value of the property, subtracts $19,000, then multiplies that amount by 0.782 per cent for residential properties, or by 0.3910 per cent for rural properties. A fixed charge of $300 is then added for residential properties to obtain the final rates bill.

There is a 50 per cent concession scheme, but it applies only to pensioners, and concessions are limited to $250 per property, which does not go far in reducing a rates bill in the inner south or inner north.

There is currently no concession scheme that applies to the working poor, and unfortunately I have seen no evidence that the government is proposing to introduce one. The only relief available for the working poor is a rates deferment scheme, but deferred rates bills accumulate interest, and only 76 applications for deferment have been approved. This suggests that the deferment scheme either is too difficult to access or is currently unattractive to lower income ratepayers.

The government's CPI rates cap must have reduced rates revenue to well below what would have been received if the original system of unimproved values had been retained. Whilst this may give some immediate relief to people in their hip pocket, it will probably have an impact on our social services.

While we have forgone so much revenue, the CPI cap has probably not taken much strain off low-income households. Canberra's highest income households have been given an unwarranted bonus when they could have easily afforded a rates bill based on their unimproved land value.

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