Page 2164 - Week 06 - Tuesday, 21 June 2011
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There is a housing affordability crisis in Canberra and the government should be doing everything it can to address that problem. But what is this government’s response? A tax on houses. You have got a housing affordability crisis and the best the government can come up with is a massive increase in tax on housing. Blind Freddy could see what kind of impact that will have on affordability and on supply, particularly in the unit market, in the ACT.
This is not a small tax. This is a massive tax. Let us look at the numbers as they will be from 1 July and then as they will be just a couple of years later. And we only have to look at a snapshot. Of course we have now got the codification schedule of values, and I might go through some of the suburbs and how they are affected.
If you just look at a summary of suburbs and take a small snapshot, in Braddon, for five to 10 units, it is $17½ thousand from 1 July and $52½ thousand once the scheme is fully implemented. For 21 to 40 units, it goes from $15,000 to $45,000. In Bruce, it is $13,750 from 1 July for five to 10 units, going up to $41,250 per unit. In Mawson, likewise, it goes from $13,750 per unit from 1 July to $41,250. And even when we head out into the suburbs, in Belconnen, Hawker, it is $10,000 per unit for five to 10 units from 1 July, moving up to $30,000 per unit once the scheme is fully implemented.
Together with stamp duty, the ACT government will have its hand in new buyers’ pockets to the tune of over $80,000. To claim this does not have an effect on the final price is breathtaking denial. To state that the market will adjust is to take the responsibility from the government and place the burden on families. I cannot think of anyone who thinks the best way to make housing more affordable is to increase taxes by 10 or 20 or 30 times. There is no doubt that this tax will put up rents.
Renting is another area where Canberra holds a dubious national honour of being one of the hardest towns in which to rent in the country. We have some of the lowest rental vacancies in the nation and we have seen rents increase by around 70 per cent since this government came to office. If you speak to anyone who is seeking to rent in Canberra and they have seen that for one and two-bedroom units close to town or in and around Woden, they are paying upwards of $400 and $500 per week.
To suggest that putting another $17,000 or $30,000 or $50,000 in tax on each of those units will not lead to significant hardship for Canberra families, particularly young people looking to get ahead—let us remember that it is young people who are often renting apartments during their time at university, during their time early in the workforce, often saving their money in order to buy a home—is a double whammy, is it not? We have seen house prices get out of control. Unit prices will go up. Those people who are looking to get into the market to buy will be paying much more for their rent. That will of course make it more difficult for them to pay those very high prices because of the amount of money out of their weekly budget which is going to service their rent.
This is a piece of legislation, as framed, that will discourage infill developments. I believe that we need a really good mix of greenfields development and infill in order to see the city grow in the way we would like it to. That is both from the perspective
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