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Legislative Assembly for the ACT: 1999 Week 7 Hansard (1 July) . . Page.. 2059 ..

MS CARNELL (continuing):

component that reflects the unimproved capital value of the property. The idea of having three components of the rates bill was to try to flatten the huge increases that were happening under Labor. For many people, their rates bills increased by 60% or more over three years.

The flat component was put in place to reflect the cost of providing the services everybody gets, as Mr Humphries was saying. The proposed increase in this bill from $240 to $260 in 1999-2000 is part of a gradual move to a more equitable user-pays system. As this rating formula has three separate components, it would be ridiculous to look at any one component of the package on its own. The formula results in minimal changes in rates from last year but reflects the cost of the services that everybody gets and the unimproved capital value. It is an integrated system, one that I believe gives ratepayers significantly more confidence than was the case under the previous system.

To answer Mr Quinlan's comments, yes, it is true that it is the Government's view that we should have a gradual move in the flat fee component to more adequately reflect the cost of providing municipal-type services and to enhance rather than undermine the equity and the fairness of the whole system. I think it is important to note that the actual cost of municipal-type services for each property in the ACT is, on average, about $780. It is significantly higher than the $260. Obviously, we would never be anywhere near that level, because that would undermine the whole system.

I think the new rating approach is working very well, when you compare it to the past systems, which caused huge social problems, usually to the people least able to pay. Fixed income retirees living in the inner north and inner south were being placed in positions where it was very hard for them to handle the increases. This particular approach, I believe, overcomes that problem. One of the architects of the amendment is in the house today. We call this the Marina-Dawson amendment. It has produced a system that is very appropriate.

Question resolved in the affirmative.

Bill agreed to in principle.

Bill, by leave, taken as a whole

MS CARNELL (Chief Minister and Treasurer) (4.58): I present a supplementary explanatory memorandum. I ask for leave to move two amendments circulated in my name together.

Leave granted.

MS CARNELL: I move the following two amendments: