Page 1434 - Week 06 - Tuesday, 11 August 1992
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support of people in the ACT. I would think, in fact, that the introduction of this land tax and its methodology probably owe more to administrative convenience than to what I would regard as social justice or equity.
The net effect of this tax and the way it has been introduced has, I believe, been to force up rents in this Territory. When it was introduced initially last year it was done without prior advice. It was mentioned in the newspapers at the time that the land tax would lead to a cost to a landlord of approximately $10 per week. I think that has probably been passed on to the tenants in most cases. However, I suggest that it is not just a matter of that $10 per week being passed on. Because it was unexpected, there is the possibility that, when rents were to be renegotiated for rental housing, the increase may not have been $10 per week; it may well have been $20, as the landlord attempted to cover the following year's land tax as well.
I do not think this is a desirable situation. The fact that interest rates have dropped just recently, as Mr Moore mentioned, is simply fortuitous. It really has nothing to do with the land tax situation. Furthermore, Mr Moore, I would suggest that, as landlords have been adding this on when they take account of this expense, they would have built that into the purchase of a house for investment purposes when they decided to let out the house. There is no real saving to anybody, least of all the tenants that this Government purports to be concerned about.
I believe, however, that it is not even equitable. Indeed, the evidence of that is the Chief Minister's own statements in reply to a question from Mr Kaine on 12 September 1991. Mr Kaine suggested that Housing Trust tenants who were non-rebated tenants were a new elite class of tenants who would be shielded from the net effect of the rent increase that flows from this one per cent increase in land tax. The Chief Minister responded that that was not the case because Housing Trust rents were set at market levels. Subsequently, Ms Follett attempted to explain to me that she did not actually mean that. This was in response to a question I asked on 17 June this year.
Mr Kaine: Is this a case of "read my lips"?
MR CORNWELL: That is right. Ms Follett said:
... Housing Trust rents are set at market levels for those properties, not for other properties. Mr Cornwell ... is not comparing Housing Trust properties with other replicated Housing Trust properties; he is comparing Housing Trust properties with a median of the whole market, I presume.
Of course I am. Indeed, back on 12 September the Chief Minister confirmed this when she said, and reference to page 3248 of Hansard will confirm this:
I say again that Housing Trust rents are set at market levels. I presume that that means they reflect the general market for rent in our community.
So we do not even have an equitable land tax, because this Government is not prepared to build it in so far as its own non-rebated Housing Trust tenants are concerned. So much for the potential revenue forgone that Ms Follett was speaking of earlier.
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