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Legislative Assembly for the ACT: 1996 Week 8 Hansard (25 June) . . Page.. 2034 ..

MR WHITECROSS (continuing):

Mr Speaker, we expect Mrs Carnell to return to the Assembly next year with a new rating system, with a proper rating system. In the detail stage, I will be moving an amendment to force Mrs Carnell to come back next year with a better system, because what Mrs Carnell has done here is unacceptable to the community and it should not be tolerated.

MR MOORE (10.40): Mr Speaker, this piece of legislation is a time bomb. Capping the rates increase at 3 per cent saw the Government through last year and may well see it through this year without running into major problems, but what will happen 10 years into the future if the Government continues with this process? I know they are not intending to continue it but I am raising this to illustrate the point. If the Government caps rates at 1994 valuations and continues to increase them by 3 per cent, then in 10 years' time the Government will be forced to say, "This is ridiculous". We would no longer have a rating system based on land values. After all, that is how our rating system works. It is based on land values as of 1994. Someone at some time in the future, perhaps in the year 2006, is going to have to say, "Sorry, people. We have to get back to our valuation system". Some individuals will have a 5,000 per cent increase in their rates; some individuals will have a 5,000 per cent decrease in their rates. The people who have the decrease will wonder why they had been spending so much money on rates over the years, and those who have the 5,000 per cent increase in their rates will be saying, "Why is it that we have suddenly got this ridiculous increase and how are we going to budget for a huge increase along those lines?". Mr Speaker, if that is the extreme of the scale, as we go along year by year the situation will worsen until it gets to the point I have described.

Why are we in this situation? It is because of the Carnell solution to a problem of preselection. Her party preselected a member of the Canberra Ratepayers Association, and that member of the Canberra Ratepayers Association ran not only a very strong campaign within the party on rates but also a campaign against her own party leader during the last election. Indeed, she was supported by the real estate lobby. Mr Speaker, this presented a problem for Mrs Carnell, and her solution was to say, "It is all right. We will guarantee to cap rate increases at 3 per cent in the first year while we do a wide-ranging review to find out the solution to this form of taxation". The report of the review has come down. In the Chief Minister's presentation speech for this legislation she suggested that the Government is not prepared to accept a number of the recommendations of the review because they could lead to big rate increases for ratepayers with property values at the lower end of the scale. Mr Speaker, I think most of us would find that comment by the Government to be socially just and equitable, but at the same time, in rejecting the findings of the review, the Government is now left with the choice of making decisions. They have had a rate review done. They chose the people to do it, and it was quite clear that the solution they were going to get would be a dry economic solution. Indeed, that is the one that they got.

The choice the Government has is to say, "How are we going to solve this problem?". The solution is not to keep putting it off by saying, "We will stick with the 1994 valuations and we will just add 3 per cent a year". That is a time bomb. It is fraught with disaster. It is another example of what Mr Berry referred to the other day as "back to the future". It is a system that, effectively, was rejected by Canberra some years ago when rating valuations were done every 10 years and at the end of the 10-year period

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