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Legislative Assembly for the ACT: 1998 Week 4 Hansard (23 June) . . Page.. 805 ..

MR QUINLAN (continuing):

We do support the Bill because it is part of your overall budget; but please be on notice that if the movement in land values changes, if we do not see a continued lowering of value at the bottom end of the market - which is, in fact, a very telling and very eloquent statement on the state of the overall economy in the ACT - then we will not necessarily support a continued application of this system in a regressive fashion.

MR KAINE (10.57): Mr Speaker, I support the Bill before the house. The basis on which rates and land tax are assessed in the ACT has been a matter of some debate and conjecture ever since self-government and I have no doubt was for many years before. No matter what system you introduce, there is always perceived to be some inequity. I think that is what the shadow spokesperson on treasury matters has alluded to today. If you break down the formula on which the Government now calculates its rates levels, I believe that this is as equitable a system as you could devise. We have looked at different bases for assessing rates; but I think that the concept of a fixed-rate charge reflects the fact that all landowners or land occupiers receive a certain level of service that costs the Government a certain amount regardless of the value of their property. I think that the fixed-rate component is a reasonable contribution for all land occupiers to make. Then, on top of that, there is an additional element based on a three-year moving average of unimproved property values. I believe that those two components taken together do distribute fairly the burden of the costs of running the city, and that is essentially what this revenue is collected to do.

Of course, there is a rates-free threshold in there at $19,000, which I think is fair. At the end of the day, of course, no matter how you do your assessment, no matter what rate in the dollar you set, no matter what unimproved capital value is determined, the bottom line is that the Government has to collect enough by way of rates revenue to cover the costs of running the city. In recent years, that has been running at around $100m a year, give or take a bit. It increases over time, as do all costs, certainly while there is even minimal inflation. The increase this year, the Treasurer tells us, is consistent with the inflation rate, which is about 21/2 per cent.

I believe that that is about as equitable a system as we will get. I must admit that, when I got my rates bill, I had no complaint about it. It seemed to reasonably reflect the movement in values and the amenity that I enjoy on the piece of land on which I reside. So, Mr Speaker, I do not support the reservations on this matter expressed by the Opposition. I think it is a reasonable system and I think there would be very few people who would have a legitimate cause for complaint as a result of the calculation of their rates for the next year. So, Mr Speaker, I support this Bill without reservation.

MS TUCKER (11.01): Mr Speaker, in the last Assembly we had major discussions about the rating system. While there was general agreement about the new system, there were some concerns expressed by different members. One of them was in relation to the fixed-charge component. The outcome this year highlights the potential problem that there will be a "creeping" increase in fixed charges. When the system was introduced, we argued that the fixed charge should be lower, to cover only garbage costs, which would be about $100 to $120. This would have sent a very strong message. Rather than paying for a bundle of services which are not very clearly defined, households would be made aware of the cost of garbage collection, which is currently about $12m a year in the ACT.

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