Page 3878 - Week 10 - Thursday, 20 September 2018
As I have spoken about before, there is a better correlation between someone’s wealth and the market value of their home than there is between their wealth and the value of the land on which their home is located. This has been shown in academic studies overseas at some length.
Other reasons include technical issues in working out land values and market values. One of the things the Mr Fluffy buyback showed was that our current system of evaluating land is broken. Mr Fluffy blocks in the inner north and inner south generally sold for significantly more than their rateable value, whereas Mr Fluffy blocks in the outer suburbs sold for their rateable value or in some cases less than that.
In other words, our land value system for rates appears to underestimate the value of land in the inner older suburbs and overestimate it for our outer suburbs. This is another inequity. Because in general we do not sell blocks of land in established suburbs, we have no easy way of ensuring that our land values as used by rates are accurate. However, if you use market value, on average I believe houses are sold every seven years in Australia, so you have a way of validating what value you use. Also, with the advent of Google Earth and other systems for taking photos of residences, you can easily obtain a quick idea of the approximate market value of a house.
I also point out that the market value, rather than the land value, is used in other jurisdictions—South Australia, Victoria and New Zealand. In New South Wales, IPART conducted an investigation into this and their draft report recommended moving to market value. Unfortunately, the New South Wales government, for whatever reason, has not released the final report. We tried to get this through FOI but failed. I also point out that we tried with FOI and failed to get the work the ACT government has done on this; we were given a heavily redacted document.
The clear result of the PAC committee’s useful report is that our current rates system has significant problems which are only going to get worse as we continue down the path of reducing stamp duty and making up the slack through rates. It is time for this Assembly, with the government, to establish a full-on inquiry into our rates system before it becomes totally unsustainable.
The Greens have contributed an idea to this. We think our idea would be superior to the current system. As the PAC inquiry has demonstrated, the current system has major problems. I very much thank the PAC committee for their work and look forward to having the time to read all 173 pages.
Question resolved in the affirmative.
Ministerial delegation to New Zealand
MS FITZHARRIS (Yerrabi—Minister for Health and Wellbeing, Minister for Higher Education, Minister for Medical and Health Research, Minister for Transport and Minister for Vocational Education and Skills) (10.37): Today I would like to