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Legislative Assembly for the ACT: 1997 Week 2 Hansard (25 February) . . Page.. 419 ..

MRS CARNELL (continuing):

Mr Speaker, following presentation of the exposure draft in the Assembly in December 1996, I sought the community's views on the exposure draft. I would like to address some of the issues raised about the system. There is a perception held by some members of the community that the business sector is not paying enough in rates, while others think that they are paying far too much. That is not a big surprise, Mr Speaker. The introduction of separate revenue targets of 85 : 15 for the residential and non-residential sectors will provide more certainty for all ratepayers and will reduce the possibility of significant fluctuations in individual liabilities caused by shifts in each sector's property values from year to year, as happened under the previous Government's system, Mr Speaker.

The revenue targets of 85 per cent for the residential sector and 15 per cent for the non-residential sector are broadly based on recent years' contributions. They minimise the level of cross-subsidy between sectors which occurred in the past when there was a significant shift of valuation from one sector to the other. Given the small number of non-residential properties, any significant change in the ratio - say, as has already been spoken about today, to 80 : 20 - would cause an enormous increase in rates bills for businesses in what is a very difficult economic environment.

Views have also been expressed about the level of the fixed charge. The amount of $220 per property is much lower than the average cost of providing municipal-type services, and it recognises the varying services provided to sectors of the community. Mr Speaker, while the non-residential sector does not receive a waste management service, it does enjoy a wide range of other services, including streetlighting, landscaping, lawn-mowing, additional stormwater drainage, and street cleaning, including litter removal. Canberrans will not feel that they are paying for a service that they do not receive, Mr Speaker.

The amount of $220 approximates the lowest bills for residential properties last year. Any higher fixed charge would obviously increase the amount these ratepayers have to pay. This level is sufficient to assist in reducing annual fluctuations in rates bills and to introduce into our rating system, as a starting point, an element of fee for services. The fixed charge will apply to all except rural properties, in recognition of the significantly reduced level of services supplied to properties outside the city area. Individual units will each be separately charged, and the final Bill will incorporate provisions to achieve this. A fixed charge relies on a threshold to protect owners of lower valued properties. For example, the fixed charge on its own could see many residents of Tuggeranong facing increases of $125, which represents a 30 per cent increase, Mr Speaker. I am sure that nobody here would want that to happen. The introduction of a threshold balances this effect, while still acknowledging unimproved capital values. It also stabilises annual fluctuations.

Mr Speaker, the proposed rating system is an integrated package designed to provide a fair deal for all ratepayers. It is a system which has flexibility to allow adjustments over time to reflect more closely the cost of providing services and to review, as required, the distribution of the rates burden amongst ratepayers. The new system does have more components than the previous one, which was based solely on unimproved capital values. It was the simplicity of the old system that caused rates to increase by massive amounts in some suburbs.

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