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Legislative Assembly for the ACT: 1996 Week 14 Hansard (11 December) . . Page.. 4663 ..

MRS CARNELL (continuing):

We have a situation right at the moment where the building industry is doing it very tough, not just in Canberra but all around Australia, although the situation here is very difficult. Mr Speaker, we have some glimmers on the horizon. I understand that the Reserve Bank brought interest rates down by another half a per cent this morning, which is very good news for Canberrans and especially those who are in the market to buy a house. We know that affordability levels are at an all-time high, Mr Speaker. In Canberra we have a situation where homes are more affordable than they have been before. We see interest rates coming down. All of that is great. So, why would we, right now, turn around and increase costs in the industry, and increase costs above those in other States?

Mr Berry: It does not increase costs.

MRS CARNELL: Mr Berry, it is interesting that you say that. Certainly, our advice is that, as much as the reserves and the levy could handle the increased long service leave in the short term, in the longer term they simply could not do so.

We have to understand as well that our costs are already higher than costs in other States because our levy is higher than the levy in other States. Do we want a situation in the ACT where the costs of building both homes and commercial buildings are artificially inflated above those in other States? I would have thought - particularly at the moment, when the industry is doing it tough and also when we are trying to make it just that little bit easier for Canberrans who want to get into their own homes or, for that matter, people who want to invest and employ in the ACT - that we would be quite positive about ensuring that our costs in Canberra were at the same level as those in other States. I thought that, as an Assembly, we would be doing everything in our power to ensure that our capacity to compete with other States for investment dollars and for jobs was as good as it could be.

We also have a situation where the proposal put forward here, as I understand it, gives a long service leave entitlement significantly above that of most other States. Again, that is just another cost.

Mr Moore: But not all States.

MRS CARNELL: Most other States.

Mr De Domenico: But more than New South Wales, our main competitor.

MRS CARNELL: Significantly more than most other States, Mr Speaker, but not all other States. But, again, the levy is more than that of all other States, at its current level. The view of the Government has been that what we should be trying to do is reduce the long service leave levy in line with other States or to the level to which we can possibly reduce it while maintaining the capacity for that levy to fund the entitlements that already exist in the industry, which is basically why people paid it. An employer pays the levy to ensure that there is money in the fund to cover the entitlements that their employees have.

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