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Legislative Assembly for the ACT: 2003 Week 6 Hansard (19 June) . . Page.. 2113 ..

MR SMYTH (continuing):

Treasurer, irrespective of what rating policy you propose, there will be disparities in the impact of policies. You should be responding to these disparities separately from seeking to change the fundamental rating policy.

Mr Speaker, it would be remiss of me to not make some comment about the role of revenue raised from rates in funding the provision of services by the ACT government. Rates revenue is one of the most important and growing sources of revenue for the territory. It has been a stable source of revenue and is estimated to generate nearly $120 million in the year 2003-04, or around 5 per cent of the total ACT revenue.

The rating policy has been applied as fairly and equitably as possible over a number of years. Indeed, the policy was introduced unanimously, after amendment, by the Assembly, with many claiming it was as fair and equitable as could be achieved. It is a known taxing system and I believe the community understands that the revenue is used in providing a range of important services. The change to the system being proposed by the Treasurer takes this territory into uncharted waters.

We have no experience with applying a differential system of rates to adjoining properties. What will happen to aggregate revenue derived from residential and rural rates? What about the quantum of house and unit sales across Canberra? What will be the impact of any system of exemptions and deferrals that will inevitably have to be considered?

I find it extraordinary that, under the proposed system, two identical adjoining units could end up paying dramatically different rates for virtually identical services. That is not a good taxing policy. It is instructive to note some of the comments made in briefings prepared in the bureaucracy for the incoming government in October 2001 in relation to the proposed rating policy.

Treasury noted that further discussions, briefing and detailed modelling would have to be undertaken. I ask: how much of that work was done? None-or, at best, very little. The incoming government briefing said:

Differentiating between ratepayers based on occupation dates... Require a different approach to calculating rating factors...

That is not what the Treasurer has told us. The incoming brief also stated that extensive computer program changes would be required, conservatively estimated at $0.2m. The Treasurer has said the new system would not be complex or costly.

There are many questions of equity that will be raised by the property rating system proposed by the Treasurer. Based on the analysis we have undertaken and the information provided by the Treasurer to date, what we can say is that, in 10 years time-long after this Treasurer has left office-where property sales have taken place, there will typically be a disparity of over 100 per cent between neighbours in the rates they pay.

Inequity will be rife, and unfairness will be the watchword. The outcome will be that a party or government whose rhetoric would have you believe it is interested in equity will

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