Page 4298 - Week 12 - Wednesday, 25 October 2017
government would ensure that there are no disincentives for households and businesses to locate within territory borders, as opposed to the surrounding region.
If we look to the surrounding New South Wales councils, they are increasing their rates by 1.5 per cent in 2017-18. Meanwhile, the ACT government’s changes will see increases perhaps as much as 30 per cent for some units. This is over and above the foreshadowed average rate increase of almost 15 per cent between now and 2019. Of course, we have had compounding rates since 2012. The rises will continue to compound year after year, as they have already done. It is no wonder that so many people are choosing to live across the border. When you put this on top of the cheaper land that exists outside the ACT, unfortunately it makes the ACT quite unattractive compared to these other jurisdictions when it comes to the cost of living.
As I have already outlined, every residence in the ACT pays the same fixed charge, from modest homes through to the largest. What determines the difference in rates is the valuation-based charge, which is of course the sliding scale applied to the AUV. It is this scale that the government has now rigged in its favour and against residents. These changes run counter to recommendations the government endorsed in the ACT taxation review. These changes undermine the ACT’s planning strategies, foremost of which is to create a more compact, efficient city by focusing on urban intensification in town centres, around group centres and along major public transport routes.
When you look at government services provided to unit owners, I think there probably is a case for lower rates, not higher rates. It is unfair, I believe, that units, which occupy a fraction of the land of single dwellings, seem to be treated by this government as if they are exactly the same. The general rates of unit owners in one suburb have increased by $730 this year alone, which is on top of a surge in land tax of $1,375.
If you were renting out a property in this suburb you would have an increase of $2,100 that would simply have to be passed on to renters. That is why, in effect, the increases we are seeing to rates and the increases to land tax are in effect rent taxes. In this particular suburb where there has been an increase of $2,100 for unit owners we are going to see an increase of around $40 per week in rent simply to cover the additional money. The one-off rebate of $100 has done little to soften the blow for Canberrans when they receive and then pay their rates notices. I have been contacted by constituents who feel insulted that $100 is supposed to offset the doubling of the rates and land taxes that they have paid in recent years.
In recent years the government has channelled people into units. The government has entered into arrangements with developers, allowing them to build more units in return for selling part of their stock as affordable housing. Many vulnerable Canberrans who have taken advantage of those schemes are now being put under further financial pressures due to the rates and land tax increases that we are experiencing in the ACT. Many people have been struggling for years and now they are struggling even more.