Page 3199 - Week 10 - Wednesday, 18 October 2006
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Will we see more rental properties put on the market because they are no longer giving a good return? There is a balance to be made here between governments and the market. Frankly, I think the major mandate for a government is to deliver the services that make it easier for Canberra people to survive here economically, to use its powers to increase the social amenity of our city and, of course, to make sure that any development is as sustainable as it can be.
In 2005-06 the ACT expected to reap $366 million from the four major ACT property taxes: rates, land tax, stamp duty and the change of use charge. Of this, land tax was going to generate $58 million. But this charge, as with other charges, does not go back into housing in any way; it becomes one of those ways that the government raises revenue. It gets lost in revenue and we do not know how it is returned. It is really important that we have a lot more transparency in what happens to the taxes that people pay. It is much harder to justify a tax if people cannot see where the benefit is to them. I am quite sure that that is part of the reaction against the charges raised in the latest budget. Are we seeing utilities improved? Are we seeing infrastructure improved? Are emergency services going to be better? Is the water abstraction charge going to increase water efficiency? We cannot see that.
We could have a tax-free threshold to alter the relative attractiveness of low-cost properties. We could follow the practice in other jurisdictions and extend land taxes to high-cost properties, regardless of their ownership, or include second houses—I am not sure the Liberals will like this one—even though they are not formally tenanted. The additional revenue could offset cuts to lower-priced properties or other exemptions or concessions for affordable housing. We need to ensure that if we apply taxes such as land tax we do not make them an iron fist. Make them a subtle tax that helps us achieve the outcomes we want.
MR STEFANIAK (Ginninderra—Leader of the Opposition) (11.30): I want to pick up a couple of things the Chief Minister said. The government has got itself to blame for any economic problem it has got itself into. It was left a surplus, it was left a strong economy—in fact a growing economy—and it managed to squander it in four years, as Mrs Dunne said, “spending like a drunken sailor”. And that was when it was getting record GST, record land sales and stamp duty—some $900 million over estimates over a four-year period. So it is a bit rich for the Chief Minister to say what he did.
I also remind the Chief Minister of his surprise at the exponential growth of the public service under his administration, some 2½ thousand extra public servants having been added to the books. All he has to do is read the motion. It does not call for an abolition of land tax. It says: “calls on the government to initiate an urgent and open review of the land tax system in the ACT in order to create a simpler and more equitable land tax regime.” That is common English; it is quite plain.
There can be no doubt that land tax rates in the ACT are significantly higher than elsewhere in Australia. Indeed, the only real mystery is why the ACT government does not seem to care about this fact. Higher land tax is passed on in higher rents, so everyone pays—not just the people paying the land tax. Rents here are higher than elsewhere in Australia because the land tax regime in the ACT is significantly higher. So, again, it is rather ingenious of the Chief Minister to say that my party want to put a tax effectively
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