Page 3580 - Week 12 - Thursday, 19 September 1991
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reduced. The introduction of a threshold solely for residential properties would be unfair to small commercial property owners. However, extending such a threshold to cover all land taxable properties would result in refunds being paid to commercial property owners under the threshold and would significantly reduce the land tax revenue.
A threshold would also not target involuntary landlords, who are covered specifically in the Bill. The absence of a threshold will not, as has been suggested by the Real Estate Institute, lead to an exodus of investors to Queanbeyan. Queanbeyan property prices have always been lower than those in the ACT; but this, to date, has not diminished investment in ACT housing. While ACT properties are generally dearer, they have advantages for both investors and prospective tenants which Queanbeyan does not offer - such as a firmer market for ACT houses, closer proximity to major work centres, recreation facilities, universities and schools, and a better public transport system.
The introduction of a tax which, on average, should cost around $10 a week and which is tax deductible should have little impact on investment decisions. Studies of private rental housing have shown that the most important factors affecting investment in rental housing are capital gains and taxation benefits, including negative gearing.
The continued high demand for rental accommodation in the ACT and the ability of the ACT's population, on the whole, to afford to pay the economic rent are also important factors which investors would take into account when making their investment decisions. So, it is really a market driven rent and, of course, the market will be stretched to the limit at all times.
This is a socially just decision, contrary to what Mr Jensen has said. It is clearly about collecting a tax to service the socially just revenue needs of the Labor Government. It is one that should be supported by all of the members of the house, as it is by the Australian Labor Party.
MR HUMPHRIES (5.08): Madam Temporary Deputy Speaker, I cannot agree that this is a socially just tax. I would have thought that the debate so far, both inside and outside the chamber, has indicated quite clearly that this tax will be passed on to tenants and will affect poor tenants, tenants from low socioeconomic groups, at least as badly, and probably much worse, than it affects those on higher incomes.
It is worth reflecting that originally this Government denied that there would be any flow-on of the tax to tenants. Originally, the view was that there would be no flow-on; that it would be absorbed by landlords who had reaped the benefit of lower interest rates in recent
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