Page 2119 - Week 07 - Thursday, 16 June 1994
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One of the things we often hear, particularly from the Liberals, is that we should reduce payroll taxes, we should reduce taxes on business, and there is some very good sense in that. Income tax is also a tax on productivity. Our community would probably be far better served if we changed our taxation system to ensure that we had a far greater proportion of our taxation on land. It is very difficult for us to do that while we have a Federal government levying income tax, with a set of other taxes available to us.
One thing that has been drawn to my attention again and again, particularly by elderly people, is that they have a problem with the fact that their houses grow in value. The report in the Canberra Times this morning indicated the rate of increase, and in the areas around where I live and where the Chief Minister lives the increases are greatest. It is also important to remember that with that increase in taxation has gone an incredible increase in the value of their properties. For elderly people that presents quite a dilemma, and we provide a solution to that dilemma by allowing them to defer that payment into their estate. Some elderly people find problems with that, but all of us find problems in making ends meet. While I understand and sympathise with their view that they do not want to have any form of borrowing on their property after they have paid out their mortgage, the relief valve is there for them. Of course, that deferred rate is in no way commensurate with the increase in the value of those properties and has not been over the past few years.
I do have some concerns, and one of them came through in a briefing we had from revenue officials on this. Once again, I thank the Chief Minister for those briefings; they are always useful. There were adjustments made in the Kingston area some years ago - I think it was probably when Tom Uren was Minister - so that where development occurred and the value of properties skyrocketed around people, even though they had no intention of selling, compensation was made in terms of the value of their properties. They were given a nominal rating. We have in North Canberra in particular a situation where development is occurring that is having an impact on the value of the unimproved land, provided that it is going to be used in some development sense. I think this is influencing the rates and twisting the value of the land.
I worked out the solution in this case: The unimproved value of the lease is still at such a level that, when we tax across the board, those who have gained most in speculation on the value of the land, as indeed I have, are required to pay more rates. I must say that I think this is an equitable system, although there is the associated problem when development has an impact on those around it. It happens particularly at a time when amenity is being reduced by such development, so the local residents feel that there is a double whammy. First of all, they are losing amenity and, secondly, they are being charged more because the value of their land is going up, even though they do not want to sell their houses because they happen to like living where they are. That is a problem associated with this system that is yet to be resolved. Madam Speaker, I support the Bill, as is my commitment, and I will continue with that.
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