Page 2288 - Week 09 - Tuesday, 15 September 1992
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There were a number of problems with the original Act, Madam Speaker, not just one or two. They include the fact that people are now afraid to leave their homes in the ACT, even if their families remain in those homes, to take up work outside the ACT, because if they do they are going to be taxed. Secondly, people are taxed because they organise their affairs through a trust or a corporate body, even when those arrangements are entered into for legitimate reasons that have nothing to do with tax avoidance. Thirdly, life tenants, that is, people who have occupation of a house under, perhaps, a will, are taxed because they are not owners under the current law. Fourthly, people in possession of more than one property on 1 July each year, that is, the date on which the assessment is made, are taxed regardless of the use to which the properties are put or the circumstances under which they are held.
Fifthly, people are penalised because they cannot meet the demand for a lump sum land tax payment that happens to coincide with their rates payment. Finally, bona fide residents who happen to be absent from Canberra and the ACT by virtue of employment for longer than three years are taxed as if they were commercial landlords, as though the circumstances of the rental had nothing to do with the case. If they just happen to be away for more than three years they are taxed. Those are very significant matters, and the total result of them is that a lot of people are being levied this tax when they should not be. I submit, Madam Speaker, that the Government did not even have it in mind to levy the tax on most of those people when they put their Act into place in the first place.
The Liberal Party Bill, the private members Bill, addresses all of these problems directly, with amendments that are simple, effective and applicable across a broad range of circumstances. It increases the ability of appellants to have their cases determined by the commissioner rather than requiring expensive recourse to the Administrative Appeals Tribunal. People say that it is not expensive, but for those who have to put up the money in the first place it is expensive when they are up against payment of the land tax and rates and other things all at once.
The Government's Bill, Madam Speaker, on the other hand, does not respond to the people's needs as outlined in all of those problems. Indeed, it makes the imposition of land tax even more punitive in some cases. It is clearly a reflex reaction to the Liberal Party Bill, but it misses the central point. That issue is missed because there is the ideological blindness to the reality that people often own property for reasons other than extracting rental from them. The Government is so convinced that property must mean extractive wealth that, even if an owner leaves a house empty, it is assumed to have a taxable rental potential. Those are the words of the Chief Minister. She made that statement in August - "Even if the house is not being rented, because it has a rental potential we will tax you".
The Government's concern with the greed of landlords - their words, not mine; and I use that word in the context of land ownership as a direct quote from Mrs Grassby - has made them blind to the reality of the circumstances. Nowhere in the Act is there a reference to the rental potential of, say, rateable land in the ACT, because people know that there is no potential. Either it has a rateable value or it does not. I am quite sure that the law officers of the Territory cringe at the thought of the Government taxing citizens on the basis of the inherent potentiality of either their property or their person. Why not a tax on the income potential of people, or increasing rates because property in, say, Isaacs or Forrest or Aranda is potentially worth more than the current unimproved value as determined by the Taxation Office?
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