Page 2955 - Week 07 - Wednesday, 30 June 2010
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MS GALLAGHER: That is what the amendment asks for.
Mr Smyth: No, it’s not. What the amendment says is that you have already agreed to that, and that is not what is in your response to the estimates report.
MS GALLAGHER: There are two sections of the amendment, Mr Smyth. The first section is around what we have already agreed to. We will provide a full evaluation of the codification of the change of use charge to the Assembly. There is absolutely no reason for us not to do that, Mr Smyth. We will provide that update to the Assembly, there will be legislation introduced to implement a codified system, and then we will debate that in full with members.
The ACIL Tasman independent review of the 2010-11 budget does have something to say on the change of use charge. I am sure Mr Smyth enjoyed reading this, but it says:
The CUC has a very strong basis in economic theory. Economic rent is defined as an excess distribution to any factor in a production process above the amount required to draw the factor into the process or to sustain the current use of the factor. True economic rent can be collected by governments for the purpose of public finance without the adverse effect caused by taxes on production or consumption.
Mr Smyth: Mr Barr said any test—
MS GALLAGHER: This is ACIL Tasman; this is not me:
The CUC appears to be an attempt to isolate and tax economic rents. To the extent that it is successful in isolating and then taxing those rents, it should have no impact on production and consumption decisions.
The report goes on to state:
… from the standpoint of trying to isolate and then subsequently trying to tax the economic rents, its rationale is on the strongest economic policy grounds. The rationale for the CUC would be in keeping with the recent Henry Tax Review …
There are views around the change of use charge, and I think the community has a view around the change of use charge. They want to see their government collect a reasonable return for the benefit of allowing developers to develop and make money out of what was a community asset. I think the community expects that. What we are seeking to do is take a reasonable revenue stream around those development decisions. If members of the opposition in this place thought about it long and hard and did not want to run a political campaign around it, they would not object to that.
I will watch closely for the Liberal Party’s first election commitment—maybe it is their second or third—that they are going to abolish the change of use charge. I do not think you will have too many supporters for an approach like that. I think it is a legitimate revenue stream. Obviously the Assembly wants some more information before we move to a different model. That is fair and reasonable, and the government are very happy to provide that. The opposition are saying we are not doing enough
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