Page 4911 - Week 15 - Thursday, 15 December 2005
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
Ultimately, of course, the only price that matters and can be confirmed is the actual sale price. The only true market price is the price at which a transaction takes place; that is, it is the sale price. In the case of a house, for example, estimates of value may be based on actual sales for a month. So a prospective buyer may start by looking at sale prices for a particular area and use that to set a so-called market price. But that does not mean that that market price necessarily applies to a particular house at a specified time. That is why the tax, the conveyancing duty, on the sale of a house is based on the actual sale price.
It follows, therefore, that the government, in trying to establish a valuation for imposing its registration tax on cars, should drop completely the notion of market value, because it is so imprecise. How do you know if you are comparing identical vehicles, and how do you know if the basis of the estimate of the valuation in a particular case is valid? In order to remove the scope for confusion, the words “market value” should be deleted and replaced with “actual sale price”. That is the only price that matters. Since duty on sales of ACT registered used vehicles will continue to be based on the current system, I would suggest to the Treasurer that the current system would be greatly simplified and improved by using sale price as the basis for levying all of these duties. Any other reference price is fictitious.
Mr Quinlan: You’d have to trust people then.
MR MULCAHY: The Treasurer says that we need to trust people. I think that there are adequate mechanisms to deal with fraudulent reporting of transactions under a range of tax administration laws that exist in the territory, and I do not think that, in effect, to fleece people with a high rate of tax is justification for coming up with a fictitious base on which tax is applied; that is certainly the sentiment I am hearing widely from those with whom I have discussed it this week. To assist the Treasurer, I will move an amendment at the detail stage of this bill to define dutiable value as the consideration given for the acquisition of the vehicle; that is legal speak for purchase price.
The problem with the government’s move to use the list price for new vehicles is that the list price can best be described as a hope. Again, using the example of a house, you may list it at, say, $400,000, knowing that you will never get that price, and might finish accepting something more like $320,000. If you can take it back to the example of cars, the present list price for a base-model Commodore, I understand, is about $32,000 to $34,000, but dealers will sell them for as little as $28,000, especially with the year end approaching, in an attempt to drive volume at this time of year.
The list price is defined in the bill as the price posted as the retail selling price in the ACT by the manufacturer, importer or distributor. The Treasurer says that his reasons for using the list price are to avoid inequities created from the broad range of prices declared for new vehicles and the problems in determining a universally accepted market value. My comment on that is that the Treasurer is being unrealistic if he thinks there can ever be a universally accepted market value. Prices are always changing to reflect hundreds of factors, and they result consequently from variations in supply and demand. The disparity is in duty paid because one buyer has greater negotiating power than the other. Again, I would say: why should one person be unfairly targeted because they are able to negotiate a lower price than the next person? This approach of uniformity is grossly unfair. It is almost an attitude of: don’t let anybody get ahead; keep everybody at the
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .