Page 2193 - Week 07 - Thursday, 6 June 1991
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amply demonstrated once again the folly of Liberal policy in those areas. But, Mr Speaker, the audacity shown by Chief Minister Kaine in leading this assault on Canberra's leasehold system is simply astounding.
Let us be clear about this; the proposal to renew commercial leases without payment of a premium, which we are led to believe was announced contrary to a Cabinet decision, would amount to a windfall profit for certain developers in this town. The practice in Canberra, at least since 1970, has been that short-term commercial leases - that is, leases for terms of less than 99 years - may be extended to 99-year leases upon payment of 10 per cent of the unimproved value of the lease and, of course, any betterment charge that may result should the lease purpose clause be changed at the time of the extension.
Mr Speaker, I am advised that at present about 85 per cent of Canberra's commercial leases are, in fact, 99-year leases, but that very important group of 15 per cent of short-term leases remains. It has been the practice, where a commercial lease site is redeveloped, for the proponent to extend the lease. The reasons are obvious. Lending institutions require security and a lease nearing the end of its term, or even with, say, 15 or 20 years remaining on the term, is less attractive as security for a mortgage than a 99-year lease. It makes commercial sense to so extend and pay the premium, and developers have had no difficulty paying the premiums over the years.
Mr Kaine's proposal would have represented a windfall to those developers or investors who currently hold short-term leases. They would obtain, for a nominal fee or for nothing - we were never quite clear about this - exactly what they have previously been prepared to pay for, namely, the extended security of a long lease. What was previously a standard development cost and source of Territory revenue becomes windfall profit; straight into the developers' pockets. A more naked attempt to rob the public purse and fill the pockets of Liberal Party mates is hard to imagine.
Now, we know, Mr Speaker, the duplicity that has been involved in this announcement. We know that Cabinet took an in-principle decision and that that decision was not to be announced until details were worked out. Yet Mr Kaine went ahead anyway and made the announcement at a business lunch. What we learned in question time only last week, and this was referred to by the Leader of the Opposition, was that this so-called decision was made without any background information. I asked the Chief Minister what projections had been done on the future income source or stream for the next decade from lease renewal premiums and how that would translate by way of an increase in land tax.
That was a logical question to ask, Mr Speaker, given that the Chief Minister has repeatedly defended this decision by saying that it is not really an important matter of principle whether or not you renew a lease by way of
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