Page 3203 - Week 10 - Wednesday, 18 October 2006
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Whatever one thinks of the merits of that idea, it is symptomatic of an acute rental shortage.
The second part of the motion talks about the high levels of rent in the ACT. The ACT does have the highest levels of rent in the country. What are the impacts of high rents and low vacancies? Firstly, we know that the poor are the most disadvantaged by high rents and low vacancy rates, because they are simply squeezed out of the market, and more people are pushed into the public housing market. Secondly, it is more difficult for us to address our skills shortage, as it is pretty difficult to attract workers with the Live in Canberra campaign. The commonwealth is creating the jobs, but it is very difficult to attract people here if they cannot find a place to live. That clearly undermines our ability to address the skills shortage. Thirdly, it makes it more difficult for couples to save to buy a house when they have to fork out $350 or more a week for rent.
The next part of the motion talks about relatively high levels of land tax, and this has been spelled out by Mr Mulcahy and Mr Stefaniak. The figures speak for themselves. Land tax on a $350,000 house in the ACT is $4,900; in New South Wales, nothing; in Queensland, nothing; in Tasmania, $1,800; in South Australia, $720; in Victoria, $500; and in Western Australia, $825. That is a massive disparity in the rate of land tax in the territory compared to other jurisdictions. In an economy where people are very choosy about where they put their money, about where they choose to invest, they invest in the property market or in the stock market. If they choose to invest in the property market, do they go to the ACT, New South Wales or overseas? There are many options for investors these days. If our rates are so far out of whack, it has an impact on the number of people looking to invest in the ACT, and consequently on the level of rents in the ACT; thus the shortage of rental properties that we are now experiencing.
The last part of the motion talks about the impact that high levels of land tax have on housing affordability in the ACT. Housing affordability is something we need to be concerned about. Land release is a big part of that equation and we have been arguing for some time that the government at least needs to have land ready to come online for when there are spikes in demand. It has not done that. It is now playing catch-up and that is, of course, contributing to the problem of housing affordability in the ACT.
This motion calls for a review of the land tax regime in the ACT. We are not calling for it to be abolished. We are not even calling for it to be halved. We are talking about reviewing it. Despite what the Chief Minister thinks, you can sometimes cut taxes and not necessarily cut revenue by the same proportion. In fact, sometimes revenue even increases. It has been known to happen. It has happened federally. In that context we need a good, hard look at why our land tax needs to be so much higher than in the rest of the country, so out of whack with other jurisdictions. It is reasonable to look at how that impacts upon renters and upon investment in the ACT.
Why have we had a stagnant growth rate in the ACT over the past few years? This may well be part of the equation, so we need to look into it. The Chief Minister was, once again, cherry picking. He said yesterday that before land tax there were 20 per cent investment properties and after land tax now there are still 20 per cent. Of course, a lot has happened in the ensuing time. We have seen changes to things like capital gains tax, which have had an effect, of course. It is ridiculous to say that land tax has had no impact. It has had an impact; it is having an impact. It is part of the equation in why
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