Page 2946 - Week 07 - Wednesday, 30 June 2010
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So that is the first point. How did this deal come about? It is, in our opinion, a serious allegation—a serious allegation that there was a deal entered into which must have involved, at some level, if the government is to be believed on this, the Australian Valuation Office and indeed the ACT government, because in the end developers do not choose how much tax they pay in change of use; it is levied on them. They might put a case as to how much they should pay. They might put a case as to what kind of offset should be included and what is the value of those offsets. But in the end they do not decide; the government decides, through the Australian Valuation Office making a valuation and the advice that it gets.
So there is a serious allegation from the Treasurer, and she has not answered: what is the evidence for this allegation and who are the people who apparently entered into this deal?
The government actually acknowledge that change of use can act as a disincentive, because they say that by waiving it or by halving it it acts as an incentive. So we have got a program to act as an incentive for redevelopment where they cut the tax. By the same logic, a massive increase in the tax will provide a disincentive. This is fundamental to this debate.
Mr Barr: What about the distributional effects within the city, though—
MR SESELJA: The Treasurer believes that this kind of massive increase in tax—
Mr Barr: from a flat rate to a variable rate, depending on where the dual occupancy is?
MR SESELJA: If that is the case, if it is not going to have any impact, you could make the argument—
Mr Smyth: Why have it at all?
MR SESELJA: that it could be as big as you want it. If it is not going to have any impact, as the Treasurer would have us believe, you could double it, you could triple it, you could get unlimited revenue, it seems, for the government. But it does not work that way.
There is significant industry uncertainty about this process, and it is not just about codification. There are two aspects to this. There is the apparent deal which is now being rectified, we are told, by the government, and then there is the issue of codification. We have heard from industry that they are concerned about what the process is. It is worth quoting from a letter from the HIA, from Stuart Collins, to Katy Gallagher:
While we understand that submissions are currently being considered and the implementation of the codified system is being deferred to allow for additional input, industry is expressing its frustration with the lack of communication by government in informing it of its time-frames, interim arrangements and the process for the finalization of codification.
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