Legislative Assembly for the ACT: 2008 Week 08 Hansard (Wednesday, 6 August 2008) . . Page.. 2908 ..
support if I could, in the absence of a more coherent and overarching approach that is consistent with the Greens’ priorities of social equity and environmental protection, I cannot support the simple withdrawal of the tax.
MR STANHOPE (Ginninderra—Chief Minister, Treasurer, Minister for Business and Economic Development, Minister for Indigenous Affairs, Minister for the Environment, Water and Climate Change, Minister for the Arts) (10.57): The Rates (Fire and Emergency Services Levy Repeal) Amendment Bill 2008 seeks to repeal the Rates Amendment Act 2006. In effect, the bill seeks to abolish the fire and emergency services levy.
The government will not be supporting the proposal. The levy was introduced in the 2006-07 budget to offset just some of the costs of fire and emergency services. The levy is a broad-based and efficient tax that has been well bedded with a relatively low administrative burden for both the government and the taxpayers. The levy provides a significant level of revenue—around $23.2 million forecast in 2008-09. Abolishing this tax would require a corresponding reduction in expenditure, a corresponding increase in a different tax, or a reduction in the territory’s operating result. No proposal accompanies this bill that would restore the revenue position or the budget position.
The revenue from this levy is used to fund the provision of emergency services within the ACT. The government has undertaken significant investment in enhancing the response capability of emergency services. Since 2001, the government has increased expenditure on fire and emergency services by around 120 per cent.
It is important to note that all other jurisdictions, with the exception of the Northern Territory, impose a form of fire and/or emergency services levy. In general, the levies recover approximately 75 per cent of the cost of fire brigade services. For the ACT, the revenue of around $23.2 million should be put in the perspective of the total cost of emergency services in the ACT, forecast at $86.7 million in 2008-09. New South Wales and Victoria raise their levies through insurance companies, while all other states raise their levies from property owners. The ACT has adopted a property-based levy as it is more equitable when compared with an insurance-based levy. An insurance-based levy can also create a disincentive against insuring.
Contrary to claims by some sections of the property industry, the fire and emergency services levy is an efficient and equitable source of revenue. As a property-based levy, it does not create the disincentives against insuring that are inherent under the New South Wales and Victorian approaches of raising levies through insurance companies.
The government has also been mindful of the impact of the levy on low-income households and has provided a concession on the levy for such households. Property owners who receive a Centrelink or Department of Veterans’ Affairs pension are eligible for a rebate of 50 per cent of the levy. The levy is distributed equally between the commercial and residential sectors. It is levied at a flat rate for residential properties and is based on the unimproved land value for commercial properties.
Charging residential and rural properties a fixed levy reflects the fact that a certain level of capability to respond needs to be maintained irrespective of the size of the