Page 5481 - Week 17 - Wednesday, 4 December 1991
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It has also been pointed out by other landlords that they do not fit the ideological category of the landlord class which the Labor Left is happy to tax from a zero valuation point. For instance, a superannuant investing a $50,000 lump sum in a suburban home and at the same time borrowing $70,000 at 15.75 per cent is required to pay approximately $203 interest per week. After addition of rates, outgoings and land tax, the investment margin, even on the current rental market, is significantly reduced.
I invite members to drive into some of the traditional investment suburbs of Canberra, that is, Campbell, Griffith and Narrabundah, particularly La Perouse Street, where they will see investment homes for sale up and down those suburbs. The effect of this tax has been to push a number of small investors into selling because they can gain more by parking their money in a non-productive investment account. Only a few days ago the Real Estate Institute stated that investors comprised 26 per cent of residential sales on the Canberra market.
It is doubly unfortunate for Canberra, where the rental market is so tight and current vacancy levels are less than one per cent, that landlord investment may be impeded in its effect of easing the rental market. That the Follett Government land tax should needlessly antagonise the market is unfortunate. Whilst we concede that there may be some overreaction by investors, we stress that this is not a bullish market. Canberra investors are traditionally cautious and easily put off by target politics.
The Rally believes that there is nothing innately wrong in a superannuated Territory resident acquiring a second residence as a hedge against inflation and lower indexation of superannuation payments. Generally speaking, Territory landlords are not exploitive, and measures to deal with those who may be were recently introduced in amendments pressed by the Rally and the Alliance in government by way of the creation of the Rental Bond Board and the referral of the landlord and tenancy legislation to the community law reform group. There is, therefore, a strong basis for setting a value limit for the imposition of such a tax. Suggestions are that it be matched to the limit set in New South Wales and/or at a ceiling of $160,000 value.
We leave this proposed repeal amendment on the floor and await moves by both the Government and the Liberal Party to come to terms on this issue. The Rally would be prepared to support reintroduction of a land tax based on a sensible value ceiling, an equitable collection system, and the maintenance of current discretionary rulings by the commissioner for those forced to pay rent by reason of employment outside the Territory, together with the statutory exemption moved by the Rally during passage of the Bill for those on three years and less service abroad.
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