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Legislative Assembly for the ACT: 1997 Week 2 Hansard (25 February) . . Page.. 416 ..

MS TUCKER (continuing):

The 85 : 15 ratio will mean that there is a slight difference in the rate in the dollar between the commercial and residential sectors. However, setting a differential commercial rate may be a better solution to this problem than setting an arbitrary ratio. While the ACT's land tax regime differs from that of other jurisdictions, we are one of the few jurisdictions that do not have a differential rating structure. Mr Speaker, in conclusion, we appreciate that a lot of work has gone into preparing this model. However, as this is an exposure draft, we would like to see our ideas taken on board in coming up with the final rating system.

MR MOORE (4.05): Mr Speaker, I appreciate the opportunity to debate this exposure draft. I think it is a very appropriate method for the Government to deal with a particularly difficult and vexed issue. I congratulate it on using this method in this case. The system incorporates a fixed charge of $220, to apply to all properties other than rural properties; a charge based on unimproved valuations; rolling three-year averages; a threshold of $19,000; and, finally, separate revenue targets of 85 : 15 to apply to the residential and non-residential sectors respectively.

Mr Speaker, I would like to take that very last point about the separate revenue targets of 85 : 15. As I said publicly at the time this exposure draft was introduced into the Assembly, I believe that we should be aiming for a ratio of 80 : 20 to apply. The Chief Minister provided for me a briefing by her officers. I thank the Chief Minister again for such briefings, which are quite regular. The officers are always incredibly professional in the way they handle them. At the briefing, I asked, "How did we ever get to this ratio of 85 : 15?". The answer was, "Commercial properties have remained fairly stable, whereas residential properties have grown significantly over the last 15 or 20 years. So, there has been a change in the ratio, not necessarily because commercial properties individually are paying less but because there are simply more residential properties. Hence the change in the ratio".

It still seems to me that our long-term goal should be something like an 80 : 20 ratio, if we are going to use this ratio system, although I still have some difficulty in understanding why we actually establish a ratio and why we do not have entirely separate systems for the two. The risk of that process, Mr Speaker, is that the burden will fall more heavily on one sector than the other. I believe that we should try to correct this somewhat. I would be the first to say that what we cannot do is suddenly say, "We are going to have an 80 : 20 ratio to apply next year. Therefore, we will be expecting a small drop in the rates of the residential sector and a significant increase in the rates of the commercial sector". It would be a very significant increase in the rates of the commercial sector. I think that what we ought to be doing is projecting that change over the next five years. I would be open to suggestions that it should be even a little bit longer, considering the stress on small business and the commercial sector in the Territory at the moment. But, Mr Speaker, we should certainly set as a goal an 80 : 20 ratio, if we are going to use the ratio system at all.

Mr Speaker, the first point was the fixed charge of $220 to apply to all properties. When this was originally suggested and this exposure draft was tabled, there was a call from some sectors saying, "This is just a poll tax". That is a total misunderstanding of what a poll tax is, in the first place. A poll tax is a tax on the individual numbers of people within a property, not a tax that is levied across the board like this.

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