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Legislative Assembly for the ACT: 1997 Week 2 Hansard (25 February) . . Page.. 413 ..

MR WHITECROSS (continuing):

But, Mr Speaker, she was not smart enough just to adopt Labor's policy and keep herself out of trouble. The fact is that the three-year rolling averages are a good idea. It was a positive proposal when it was brought forward in 1994. It is a positive proposal now, and the Labor Party is happy to support it. We announced it. We would have done it two years ago without the prevarication. We would not have wasted time with the 1994 rates caps that Mrs Carnell has been using for the last three years. We certainly would not have defied the Assembly and broken the law in relation to automatic revaluations. But we are happy that they have finally adopted our proposal.

Mr Speaker, two other related features of the proposed new rates system are a flat fee component, which has been set in the exposure draft at $220, and a $19,000 threshold. That is where the first $19,000 of someone's land value will not attract rates. Mr Speaker, we are not intrinsically opposed to these components of the rates system. However, I should flag a couple of concerns. The first is that the Government has not linked the flat fee to any service or benefit to the householder. It would appear that the figure has been plucked out of the air, unrelated to any explicit policy objective. Mr Speaker, I do not think that that is a good enough position. I would feel much more comfortable if Mrs Carnell could identify some rationale for the fee. Similarly, the threshold appears to be arbitrary.

Let me say this about these two things: Officials privately and Mrs Carnell in the chamber last week have suggested to me that these figures will be manipulated to get what Mrs Carnell regards as a fair rates outcome. Mr Speaker, it should be noted that the fee and the threshold basically cancel each other out. In that sense, we do not have a major concern. But we would have a major concern if, when the 1997 valuations are done, we see some radical manipulation of the threshold and the fee to achieve what Mrs Carnell defines as fairness. We believe that they have to have some objective basis and not just be used as tools of the Government to achieve some unstated objective.

Mr Speaker, the other new feature of the system which is canvassed in the exposure draft is the idea of an 85 : 15 split between residential and commercial rates. We were initially rather concerned about this, because the McCann report on rates, which had been done previously, suggested that the split was 80 : 20, not 85 : 15. This appeared, on the face of it, to be a shift in the rates burden towards residential customers. Mr Speaker, on discussion with officials, it would appear that perhaps there are two sets of figures, and this set of figures suggested that 85 : 15 is the current split and therefore is an appropriate one.

However, Mr Speaker, the figures that were initially supplied to us in order to make that point subsequently turned out to have been incorrect, and we were issued with a revised set of figures, which affect how the trends go. Mr Speaker, 85 : 15 still appears, on the face of it, to be a reasonable split. However, before Labor gives a final commitment to this particular division between the two sets of rates, we will be interested to look at what the split looks like in the light of the 1997 valuations, and when the Government brings forward that information we will make a final decision on whether the exact split is correct. But, Mr Speaker, I can say at this stage that the principle of doing

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