Page 2290 - Week 09 - Tuesday, 15 September 1992
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The Bill avoids dealing with that issue and substitutes an extension of exemption from tax only to life tenants. As I have already explained, there are many other people who have been hit by this tax and who should not pay it either - not only life tenants. This is merely tinkering with the machinery and not coming to grips with the main problem. Until that issue is recognised and rectified, the Act will remain flawed and the Government's avowed intent will not be met. On the other hand, the wording of my Bill specifically addresses this issue, and I urge the Government to adopt it. It matches the simple, clear application of tax to all rateable land in the ACT in section 22A of the Act with an equally simple exemption that says that if a property is used as a residence and is not used to produce rental income it is exempt from tax. That is a very simple, straightforward proposition. The corollary meets the Government's intention; that is, if it is a residence used for commercial purpose, if it is income rental producing property, it is liable for tax, right and proper.
If that simple philosophical step is taken, the solution to requests for exemption and the need to make provision for company holdings, mortgagees in possession, life tenants and all the other possible combinations, all fall simply into place. The simple test is whether the property is used to produce an income. If yes, tax is applicable. If no, tax is not applicable. That is a very simple basic rule, a very simple basic premise. Adopting this change would eliminate the need for an amnesty on stamp duty payments for transfers from company to individual titles, which the Government recently approved. Subsection (3) of section 22B of the Act would not be necessary; nor would the amendments now proposed in the Government's Bill, because they would be done away with.
The absence provisions in subsection 22B(1A) of the Act can be clarified without recourse to the more limited and niggardly provisions of the Government's Bill. An additional discretion to enable the commissioner to deal with periods longer than the three years' absence already provided for would eliminate reasonable complaints about this particular section of the Act. Many people will be taxed even on their principal residence, under the Government's provision, I might add, and that would include, for example, Defence Force members who cannot comply necessarily with the two years' prior residence before they rent their property and then come back to it. What these people are saying is that a Defence Force employee who meets all the other criteria imposed by the Act is excluded from exemption on his premises because by virtue of his duty he is posted somewhere else. I think the Government really needs to look at these things.
Again, Madam Speaker, there is a simpler, more effective and more general provision than that which the Act contains or which the Government's Bill proposes. My proposal in respect of exemptions for absent residents provides for both a common fact of life in the ACT - that is, our mobile, career-oriented population of public officials, business people, Service people, academics and the like - and our current recessionary economy forcing people to seek work outside of the ACT. The provisions of the Government's Bill do nothing to assist people who fall into this category. For exemption on the basis of employment-related absence, Territory residents, according to the Government's Bill, must have been resident for two years and must be currently employed by an employer resident or carrying on business in the ACT. This will not assist business people, academics or public officials taking up posts for valid reasons relating to their employment with interstate or international institutions. As I have already said, it certainly will not take account of Defence Force personnel, who do not move voluntarily; they move when they are told.
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