Page 3193 - Week 10 - Wednesday, 18 October 2006
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
Referring again to our friend who wrote to the Canberra Times and who has properties in Braddon and Yarralumla: he has been forced into looking at capital gain on his investments, simply because renting them out is proving untenable. This means that yet another residential investor leaves the rental market, further reducing supply. In the face of ever-increasing demand, this makes the problem worse. I have had correspondence from defence families, who have had assignments and were sent to places like Townsville, in which they have lamented that they simply cannot afford to maintain their Canberra property when they take into account all the rates, taxes, charges and the land tax applicable.
In Mr Stanhope’s defence, he referred to the Commonwealth Grants Commission and its assessment of ACT taxation levels. He should carefully consider the $1.2 billion in commonwealth grants that his government is receiving, over $65 million more than the 2005-06 estimates, before crying poor over inadequate payroll tax receipts and the territory’s narrow tax base. The simple economics of our situation suggest that over the years ACT government revenues have been more than sufficient after taking into account its single-tier structure.
A fact that it has never acknowledged here is that, whilst we have a municipal and, effectively, an almost equivalent state-government role, we also have a single-tier structure, and there are inevitably economies that ought to be reflected in the economic management of this territory as a consequence. We rarely get any acknowledgment of the generous commonwealth grants that are provided. That is obviously the subject of another debate that I have raised before and certainly will raise in the future.
The reality is that this government refuses to recognise this acute problem with affordable rental accommodation in the territory and, instead, fobs it off as a cyclical residential rental squeeze. The low vacancy rates that Canberra is experiencing due to the number of people that have been entering the city is combining with the increased property costs through high land tax and other property-related charges to make life more difficult for those who rent. In other words, it is a simple demand and supply problem.
Fewer residential properties are available to an ever-increasing pool of rental tenants because the incentive for investors to create a greater supply of rental houses is simply not there. Such cheap and mean revenue-raising measures only hurt those who do not have the surplus income to meet the increased costs. The super-rich property moguls simply find another place to invest. Unfortunately, the more prevalent mum and dad investors do not have such a luxury, so they have to increase rents to make ends meet. And we are not talking about tycoons. I know a number of people in the public service who have got rental properties. I do not consider them people who have got massive empires or are monumentally wealthy, but they are finding that the economics are no longer adding up. While high land tax rates keep new investors away, the existing supply of rental accommodation over demand puts further upward pressure on rental rates and absorbs more discretionary income from our local residents.
It is unfair that people who own or rent property in Canberra should suffer increased financial pain just so this government can make up for economic failures. The financial stress that families, pensioners and those on fixed incomes are now experiencing is
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .