Page 4813 - Week 11 - Wednesday, 20 October 2010
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Either that will make some developments uneconomic, in which case they do not go ahead, and so we see a stifling of supply, or they will go ahead and they will seek to pass that on. People do not develop land so that they cannot make money out of it. There is a profit motive, and they will make those decisions. But if they make decisions not to go ahead with that development then there is less supply, and that will create further pressures. Quite apart from the issues around seeking to have more urban infill, we will see a situation where that will be discouraged and prices will be pushed up—prices for rents and prices for buying. So there is a whole range of things where the government has contributed to this situation.
The Greens actually—and it is mentioned in my amendment—support this tax. So the question for them is: do they actually buy the government’s analysis, which no-one else does, that apparently you can put a massive tax on and it will have no impact? We have seen this in the submission to Treasury from the Independent Property Group:
The logic to determine these numbers—
in terms of the codification—
appears to fail simple mathematics, and appears not to have taken into consideration the significant costs and lengthy delays a developer does ordinarily experience as they negotiate the planning system, public consultation and a possible ACAT appeals process.
The HIA says:
The fees are generally too high, and in many instances excessive, and will prevent development and redevelopment from occurring …
All of these industry groups have made compelling cases as to how this will play out, yet this government wants to push ahead with it. This government, and this alliance between the Labor Party and the Greens, wants to push ahead with a tax which is sure to create a greater burden on Canberra families. It is sure to create a burden on purchasers and a burden on renters. Anyone who tries to argue that putting a $50,000 tax on a unit will have no impact simply does not understand how the market works. Even the Treasury acknowledged that it would likely be borne across the board, which means that developers might take a bit of a hit on their profits, sellers of land might take a bit of a hit, and buyers and renters might take a bit of a hit. You would argue that the chances are that it will be all three. It is very unlikely that the developer is going to take the whole hit, and that is what the government appears to be arguing.
In conclusion, the government’s record on this is demonstrated in the figures. They can talk about all the schemes that they have, but they have a significant amount of control and under them they have made things far worse. The Greens’ motion does not seek to address that, and in fact simply seeks to reclassify words, and I do not believe it will have that kind of impact. I think these policies, and some of the policy changes that are set out in the amendment, would be a far greater contribution. They would make a far more significant contribution to making housing more affordable.
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