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Legislative Assembly for the ACT: 2000 Week 2 Hansard (2 March) . . Page.. 483 ..

MR CORBELL (continuing):

If we in this place are interested in encouraging high-quality, well-designed, sustainable development, we should at least be making sure that the subsidy inherent in a 50 per cent change in use charge, or indeed a 75 per cent change of use charge, is available only to those developers who are proposing high-quality development. But that is not the case under this proposal. Poor-quality development and good-quality development all get the same subsidy. That is an untenable position.

Further, evidence presented to the committee about the appropriateness of a 50 per cent change of use charge highlighted the fact that the reduction from 100 per cent to 75 per cent or 50 per cent was a way of encouraging development which was not transparent or well targeted. Evidence presented to the committee by ACTCOSS highlighted the fact that providing incentives in this way created major problems in determining exactly the amount of subsidy provided. ACTCOSS made the point that it would be much better for the Government to remove this type of subsidy through revenue forgone and replace it with a requirement that for all development proposals where change of use is required the developer pay 100 per cent. Then, if the Government thought it was appropriate to subsidise particular types of development, it should do that directly in a way which was transparent and open so that it was much easier to see the exact impact on the bottom line of the budget. Again, that is an issue completely ignored in the majority report.

I did a calculation before coming down for the sitting this morning. In 1998-99 the ACT Government received $4.3m in change of use charge. But the revenue forgone because betterment was not paid at 100 per cent was just over $1m. So last year we gave away just over $1m in revenue forgone. That is one of the weaknesses with the Government's approach.

The most concerning element of the majority report and the Nicholls report is the claim that change of use charge is a hindrance to development. There is no substantive data to back up this claim. Professor Nicholls acknowledges this. Yet Professor Nicholls, the Government and the majority report claim that we must reduce betterment because it is a disincentive to development. There is no data to back this up. ACTCOSS said succinctly in their evidence to the committee:

If a community organisation or other part of the community comes to the Government and says, "We want you to provide a subsidy for this", the Government says, "Back up why it is needed. Demonstrate why it is needed. Give us the data. Give us the facts that back it up". That is not happening in this case. As Professor Nicholls acknowledges, there is only anecdotal evidence. Yet we have this attempt to justify a reduction to 50 per cent betterment.

In the evidence presented to the committee by representatives of the development industry there was an acknowledgment that change of use charge was only one of the factors that affected whether or not a development proposal proceeded. That was acknowledged in the evidence. Yet change of use charge is being targeted as an evil that

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