Page 2080 - Week 07 - Tuesday, 21 June 2005
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MR MULCAHY: I have a supplementary question. I will look forward to that more detailed information for the projection—
MR SPEAKER: Just come to the question.
MR MULCAHY: Yes. In the event of the average unimproved value falling as a result—
MR SPEAKER: No preamble.
MR MULCAHY: It is a supplementary. My question to the Treasurer is: if there is a softening in the ACT land market, will the ACT government be applying reductions in rates based on that average unimproved value falling, or assuming it is falling under such circumstances, or is that beyond the capacity of the projected financial position?
MR QUINLAN: That is a bit of a stupid question, actually. I just explained to you how the rate system was applied. Therefore your question is a non sequitur. What we have done each year is increase the gross take by CPI. In some places people have seen their rates go down. In other places rates have increased by much more than CPI because there is a differential.
The previous system has protected the bulk of ratepayers against rapidly escalating prices. But part of the deal, part of the offset, is that if the bottom fell totally out of the market, rates would not decrease by a huge volume. Having dampened them all the way along, and we have seen property prices and values increase by much more than CPI over the last decade or more, we would not then say, “Because they are going the other way, land values actually decrease, but we will change the system.”
I think you should have a better look at exactly how the system is applied. Have a look at how the system is applied and I think you might conclude that the point you are trying to bring out just does not exist.
Mr Mulcahy: No, it is the assumptions you are working on.
MR SPEAKER: Order!
MR QUINLAN: We cannot have a chat, but I will just say—
MR SPEAKER: Order! Just direct your comments through the chair, please. Mr Mulcahy, you have had your question.
MR QUINLAN: What I want to make clear is that we have had for a considerable length of time a rating system that has capped the overall take to CPI in the gross pool that is collected. That is apportioned amongst properties on the basis of the unimproved value of land, which means that there are differential shifts as between various suburbs but, overall, the average take stays at CPI. Therefore the budget, our budget and previous budgets of previous governments have not benefited from galloping property prices and there will not be a disbenefit if there is a dampening of land values. If that is too complicated, we will try and write it out for you.
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