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Ms Follett: Even if your rates went down?

MRS CARNELL: Because the policy has changed. To meet Ms Follett's budgetary requirement, if some people's rates went down others were going to have to go up. What Ms Follett has overlooked is that the land valuation system on its own was not the way rates were levied under her Government. There was this wonderful thing called a rating factor, and therefore, even if your property value went down, your rates could go up. In fact, in certain circumstances they would have to go up to meet the budget requirement. So, even if the land valuation went down, your rates could still go up if the rating factor produced that result.

What we are saying here is that, instead of people's rates going up by 30 and 40 per cent this year, everybody's rates will go up by the increase in the CPI. Over the last three years, it is interesting to note that only three suburbs had rate reductions, and they were Kingston, Pialligo and Tharwa. Certainly, there is no doubt that the property market has slowed down.

Mr Connolly: As a result of the Liberal Government.

MRS CARNELL: No, this is before we took over, Terry; I am sorry. What we have is a situation where the rates part of this Bill is budget neutral. We are going to collect exactly the same dollar figure as Ms Follett was planning to do. The land tax part of this Bill is budget negative. We collect less money than Ms Follett would have collected under her regime, simply because we are allowing people who do not derive income from their property to not pay land tax. It is an unusual situation to actually levy tax when there is no income.

It is important to look back at the increases in rates in previous years with regard to CPI. In 1992-93, the increase in the CPI was 3 per cent, and what did rates go up by? They went up by 5.7 per cent, of which 5 per cent was the average increase in existing properties. So, Ms Follett put rates up, on a macro basis, by more than the increase in the CPI. In 1993-94, the increase in the CPI again was 3 per cent and the increase was 5 per cent again. In 1994-95, it was forecast that the increase in the CPI would be 3 per cent; it ended up being 2.5 per cent, and rates went up by 5 per cent again. We have a situation where every year Ms Follett put up the amount of revenue the ACT got from rates by more than the increase in the CPI. This year, in the interests of fairness and equity and also because this is what we promised at the election, which has something to do with it as well, this Government will put rates revenue up by only the increase in the CPI, which is 4 per cent. So, there are no extra little bits for the Government in this at all. I think that is an important issue.

Members of the previous Government are having a large amount of trouble understanding that our policy is to use 1994 valuations plus the increase in the CPI. It is not a mix of their policy and our policy; it is 1994 valuations plus the increase in the CPI. There is no doubt that under their policy there were enormous variations in the rates levied.

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