Page 3152 - Week 10 - Thursday, 17 September 2015
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best use” methodology to calculate its unimproved value for taxation purposes. Given the scale of land required for airports, the highest and best use methodology is not an appropriate measure of actual value. For over three years the Canberra Airport and the ACT Revenue Office have disagreed on the unimproved value of the airport site. Valuations of the unimproved value of an airport lease can range from a value of zero to tens of millions of dollars.
It is noted that the valuation system more generally is not an issue. In relation to the more standard residential and commercial properties, the application of the valuation system has generally worked appropriately. However, in this case it is important to note that for this unique piece of infrastructure there is no commonly agreed methodology to determine its value.
It is not in the interests of Canberrans to allow this dispute to continue. It may remain unresolved for many years and generate significant legal and professional costs both for the territory government and for the airport, and this would risk significant revenue used to provide health, education and municipal services to the people of Canberra.
The changes I introduce today with this legislation establish a rating methodology for the airport and its associated leases. The amendments specify a base value for rating purposes and apply a methodology to formulate the average unimproved value of airport land.
This methodology uses two factors. The development index will be calculated based on changes in the total lettable floor space of buildings on airport land. This will take account of current and future land development at Canberra Airport. The growth index is based on the average change in commercial unimproved values across the whole of the ACT, excluding airport land.
These two indexes will be applied to the previous year’s AUV to determine the AUV of airport land for the following relevant year. This methodology provides broad consistency with the general rates framework for other commercial properties. Other than the AUV, the rating structure applies to the Canberra Airport exactly as it does to any other ratepayer.
The Rates Amendment Bill gives the Canberra Airport certainty on how its rates will be calculated over the next 15 years, allowing it to plan for the future. It also provides certainty for everyday taxpayers, ensuring we will continue to receive a fair contribution from Canberra Airport. The bill also provides certainty to the government. The government needs to secure predictable revenue to be able to provide the best for Canberra residents.
So this bill shows the government acting in a responsible manner to achieve the right balance, and I commend it to the Assembly.
Debate (on motion by Mr Smyth) adjourned to the next sitting.
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