Page 4579 - Week 12 - Wednesday, 31 October 2018
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another $5,000 or another $10,000 and it turns that net return into $45,000 or $40,000, that significantly affects the value of that property because at that same ratio of 10:1 that property is now worth only $450,000 or perhaps $400,000. So you are worse off on two counts. You are worse off because you are paying more annually and you are also worse off because your capital asset has gone down in value as well. This has a real impact on the property owners and business owners of Canberra.
There are many long-term tenants in the ACT who have signed up to pay all the outgoings associated with a property. If you signed up to a 10-year lease and you said, “I’ll wear all the rates for the next 10 years,” and you did so five years ago, you had no idea that rates were going to double and are well on the way to tripling, especially for commercial properties in the ACT. This is not just something for rich landlords, as I am sure the Labor Party would like to pretend. This has a real impact on tenants as well, on commercial tenants, on struggling businesses in Canberra.
If this government is serious about diversifying the economy, they should be trying to support small business. They should be trying to support the property sector but instead they are doing the absolute opposite. They are strangling the small business sector and they are driving businesses interstate. It should not be this way. This government has done this as a simple cash grab. They have done it simply because they want more recurrent revenue for their own grandiose schemes.
I think it is about time that the government actually paid some consideration to the impact of their decision, and that is why the motion that I moved today simply calls on the government to tell us what modelling they have done, tell us what factors they have considered, tell us what impact their policies are having on Canberra businesses.
In 3(a) we call on the government to table by the last sitting day in November all modelling undertaken by the ACT government in the past two years regarding the impact of rises in commercial rates. That is not unreasonable, and they should very easily be able to present that information.
Secondly, we call on the government to table by the last sitting day in November this year the revenue office’s methodology and schedule for revaluing commercial land. At the moment the revenue office is moving around Canberra, according to a schedule that nobody knows about, revaluing commercial properties and in some instances commercial properties are being revalued to double their previous value. We are seeing values go from $1 million to $2 million, in some instances even more. Whilst we have a three-year rolling average, this means that there are significant impacts not only in that first year but also in the second and third years as well.
How is it that the revenue office determines where and how they revalue certain properties? It seems to be a bit of a dark art, this valuation process, this unimproved land valuation process, and only the valuation office seems to know all the tools, seems to know all the factors. It puts property owners and business owners at a distinct disadvantage when it comes to arguing or objecting to what the valuation office puts up. We simply want to know: what is the revenue office’s methodology and what is their schedule for revaluing commercial land around Canberra?
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