Page 4595 - Week 16 - Tuesday, 27 November 1990
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they must have the ability to build a building and, having built that building, they must be able to sell it, taking an appropriate profit for the effort they have put in and for their organisational ability. That ability to profit from that sort of effort is recognised in the ACT and it is supported. It is a very important part of the contribution that developers make to the community.
In other parts of Australia developers also make a profit out of land speculation. The standard procedure for doing that is to buy a piece of land and then set about ensuring that the zoning of that land is changed so that the developer can make a profit from successfully speculating that the zoning of the land will change.
In the ACT the system is slightly different because there is usually a need not to change the zoning of the land but rather to change a specific clause within the lease and hence make a profit from a change in the lease purpose.
We have several ways of dealing with this. The most effective way we have of dealing with it is to levy a betterment tax. In the past it has been the practice to levy a betterment tax of 50 per cent. The Alliance Government, not too long after taking office, announced that it would eventually seek 100 per cent betterment tax but on a graded scale. But, in fact, the reality is that where developers seek to change purpose they also invariably are only able to pay much less than the 100 per cent. That is the first problem with the administration of the leasehold system under the Alliance Government.
There are only two valid reasons for seeking a change in the purpose of a lease in the ACT that are recognised at this stage. The first is if a mistake has been made in the lease, and I think that is self-evident. The second reason is if it happens to be in the public interest to do so - not in the interest of an individual, but in the public interest. That situation arises fairly regularly.
But in a number of cases, particularly leases in the Civic area, the proposed changes of lease not only are not in the public interest but are in fact against the public interest. The first example that I would like to give this afternoon is that of section 52, block 3 in Civic. In fact it is rather interesting to look at section 52. In going back through some of my old clippings I notice that on 19 December 1987 attention was drawn to it in a letter which stated:
Canberrans do not seem to be aware that the proposed development ... involves the cutting down of 60 casuarinas outside the Boulevard theatres.
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