Page 1683 - Week 05 - Thursday, 11 May 2017

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MR BARR (Kurrajong—Chief Minister, Treasurer, Minister for Economic Development and Minister for Tourism and Major Events) (12.13), in reply: I thank Ms Le Couteur for her comments. I note the objection of the opposition—not unexpected when it comes to fairness and equity in taxation policy. They would, of course, be opposed to fairness and equity in taxation policy. Why change the habit of a lifetime, Madam Speaker?

The changes in this bill are important to ensure greater equity in rates and land tax that are payable between residential units and houses. Using the new method, the rating factors will be applied to the higher value base on the whole value of land, whereas currently the rating factors are applied to the lower value base of the individual value of a unit. Under the current system a unit can have a substantially higher market value than a house and yet pay a significantly lower level of general rates because it is part of a large apartment block.

The average general rates bill for houses is almost double that for units in 2016-17, despite both types of property owners generally having access to the same level of ACT government services. So the new method improves equity in rates and land tax payable between houses and units. On average, there is currently a difference of about 40 per cent between the two. So it is currently the case that, on a penthouse apartment valued at over $1 million, significantly less in rates can be paid than on a very modestly priced house in an outer suburb.

As Ms Le Couteur indicated, this bill also deals with an important element of tax reform that began five years ago. The repeal of insurance duty provisions in this bill is the final step in the process of abolishing these duties altogether in the territory, making the ACT the first jurisdiction in Australia to have done away with this inefficient tax. This bill formally completes one of the government’s major tax reform initiatives that we began five years ago to make the territory’s taxation system fairer, simpler and more efficient.

For those who are interested in good public policy, in equitable taxation policy and in the abolition of bad taxes, today is a day for celebration, when one bad tax—insurance tax—is completely abolished from the statute books here in the territory. Mission accomplished on stage 1 of tax reform: abolishing insurance tax. This is a good outcome for the ACT. It means we have a fairer, simpler and more efficient tax system. The journey will continue, though.

Question resolved in the affirmative.

Bill agreed to in principle.

Detail stage

Clauses 1 to 9, by leave, taken together and agreed to.

Clauses 10 to 15, by leave, taken together.

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