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Legislative Assembly for the ACT: 1996 Week 13 Hansard (5 December) . . Page.. 4474 ..

MRS CARNELL (continuing):

Jointly, we have put together a motion which brings together the initial motion put forward on 20 April 1994 and the words suggested by Mr Patrick Dodson. I hope that all members of the Assembly will be able to support this motion. I believe strongly that it is essential that these sorts of issues are dealt with in an apolitical manner. I think this Assembly can be very proud of the approach we have taken in this area up to date, and I am confident that that will continue in the future.

Debate (on motion by Mr Whitecross) adjourned.

MRS CARNELL (Chief Minister and Treasurer) (3.44): For the information of members, I present the exposure draft of the rates and land tax amendment legislation, together with the key points of a new ACT rating system. I move:

That the Assembly takes note of the papers.

Mr Speaker, I am pleased to announce to the Assembly a proposal for a new rating system for the ACT. It is the result of the most comprehensive overhaul of our rating system ever conducted. It draws upon the results of two major rates reviews and it follows the Assembly's direction earlier this year that the Government's preferred option of simply increasing rates by the forecast CPI in 1997-98 was unacceptable.

Mr Speaker, the issue of volatility in the rating system that existed under the previous Government caused considerable concern in the community. This Government gave a commitment to do something about the large fluctuations that many ratepayers had experienced, as well as making sure that the system provided predictability and fairness. The rating system that I am presenting today meets those objectives. Its introduction will achieve better equity, with the rates burden distributed more evenly to reflect both the capacity to pay of property owners and the level of services received; more certainty for ratepayers, with fluctuations in the rates bills from year to year minimised; and administrative efficiency and cost effectiveness. This system does not in itself increase the total amount of revenue derived from rates. That is a revenue target set annually by the Government. In line with our commitment, we will restrict the overall increase in rates revenue to the forecast CPI increase of 3 per cent used in the 1996-97 forward estimates.

Members will recall that in 1994 the previous Government conducted a rates review. One of the key recommendations of that review was that, in order to reduce the volatility of the rates system, a three-year average of unimproved capital values should be considered. On coming to government last year we commissioned a further rates review with a brief to consider more radical changes to the system. The recommendations from that review included the introduction of a fixed charge payable by all ratepayers, to raise up to 50 per cent of rates revenue, to reflect the cost of providing services. The consultant's recommendation was rejected on the basis that it would lead to big increases in rates liability for ratepayers with property values at the lower end of the scale.

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