Page 1431 - Week 06 - Tuesday, 11 August 1992
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Harking back to Mr Humphries's vote, at the time, with the way the numbers would have fallen, the budget of the minority Labor Government of only five members would have been invalid. You would not have had a budget had it not been that the Liberals weighed up two principles, I guess: Whether they wanted to vote for that particular Bill or whether a minority government was entitled to its budget. It was for that reason that Mr Humphries voted one way while the rest of the Liberals voted the other way, noting their objection to the tax but also providing the support for the higher principle that a minority government should have its budget. That is the same commitment I made during the election campaign. I have taken a little time to provide some support for Mr Humphries. I feel that the way he was dealt with was rather churlish, when he had done very much the right thing.
With the land tax system as it stands at the moment, some of the modifications the Chief Minister has announced have been important and effective. The issue the Chief Minister raises about quarterly payments is one that I think needs to be addressed. The Chief Minister quite rightly raises the point that quarterly payments for David Jones - I think that was the example she gave - and other big commercial enterprises are not necessary. Those commercial enterprises project their costs and expenditure over a long period and they ought not to have any great difficulty in meeting the payments at the time set. However, that is very different from the vast majority of residential landlords, who have invariably used the residential investment as their superannuation. I have been lobbied heavily on this since I got back from leave only a day ago. I think it is appropriate that ordinary people have the opportunity to make quarterly payments. The arguments put a couple of months ago, I think by Mr Connolly, on ACTEW going to quarterly payments - the social justice arguments - apply to those residential landlords. I urge the Government to give consideration to quarterly payments for residential landlords only.
It is possible to put a threshold in there as well, but probably once you have quarterly payments it is better simply to say, "It is on residential properties and that is the way it is". The threshold system that is used in New South Wales has been raised in the debate here. I urge the Labor Government and the Chief Minister not to introduce a threshold system in the ACT but to leave the land tax the way it is. People who are investing in the ACT understand that there will be a land tax on residential investments, and that is how it should remain. I remind members that in New South Wales, when they talk about a threshold, they say that there are very few properties over, as I recall, $170,000. One should remember that, if a landlord owns three or four properties in New South Wales, their values are combined. Even though the three properties might be worth $60,000 each, the landlord is still liable for the land tax because he has over $170,000 of investment. That is another issue. Let me clarify my position by urging the Government not to consider a threshold as an option but to continue the way we are.
When this tax was introduced there were incredible forecasts made about the very small number of rental properties - that there would be a starvation in the rental property market, and so on. Exactly the opposite has come to pass. The other point to recall is that we have a situation where landlords are making considerable savings, thanks to the drop in interest rates. That drop at least compensates them for the taxation that has been levied in this area.
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