Legislative Assembly for the ACT: 2017 Week 09 Hansard (Tuesday, 22 August 2017) . . Page.. 3120 ..
MS LAWDER (Brindabella) (3.58): The big directorate is something that we could talk on for hours, so you will be pleased to know I will be trying to keep my comments relatively brief. We have spoken in this place many times about the fact that good governance requires good consultation with the community, and I have pointed out that the government has been lacking in this regard. The budget seems to have materialised through very little consultation. I will put a few specific examples of that.
Firstly, that the government came out and announced an increase of 300 per cent to the lease variation charge on units without consulting with the property industry and the building industry is an example of the contempt in which the government holds major stakeholders and the ratepayer in general. To blindside the Master Builders Association, the Property Council and the real estate sector, as well as the general population, shows that these changes as just an exorbitant tax grab, one that would not have been supported by industry.
The big new tax increase of the LVC proves that this ACT Labor government is all talk and no action. There is silence from them about how this will affect the property industry. Young people will be worse off because of the big new tax on new units. It will be a big new tax on first homebuyers, on downsizers and on those who want to age in their own home and perhaps have a dual occupancy on their block. We have the situation where many Canberrans are being locked out of the housing market as it is, and now the government has acted in this budget to increase the lease variation charge for each new unit by 300 per cent.
This change encourages people to build and retain. It does not encourage people to build and sell or build and move. It does not encourage more land being put to market. Instead it encourages the building of McMansions, to quote my Assembly colleague Ms Le Couteur.
The government did not consult with the community. This was quite clear on the community day in the estimates committee hearing. They did not bother speaking with those on the ground, those in the know, those who will see and understand how these changes will impact on the sector.
To illustrate the point, prior to this budget a dual occupancy built on schedule 1 land would have incurred a lease variation charge of $7,500. In the last six years, this has seen 1,368 dwellings being developed. Meanwhile a dual occupancy built on schedule 2 land incurs a lease variation charge of around $35,000, give or take. In the past five years, 244 dwellings have been built on schedule 2 land.
It is clear to see from this that increasing the LVC will make development far less viable. Despite this, the government decided to create a dual occupancy LVC of $60,000 in this example. We have already seen the number of rushed development applications that were put in since the budget announcement from developers trying to beat the increase, because they knew that if they did not beat the increase their developments would no longer be financially viable.