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Legislative Assembly for the ACT: 2000 Week 5 Hansard (9 May) . . Page.. 1316 ..

MR CORBELL (continuing):

A lease does not confer property rights on the lessee. It is no more than a contract to use the property for an agreed time at an agreed price for an agreed purpose. The property right remains vested in the owner.

Mr Speaker, these are sentiments with which I completely agree and they come from the Property Council of Australia in a document they prepared on the consequences of automatic right of lease renewal for-surprise, surprise-retail tenants. So, Mr Speaker, what is good for the goose is good for the gander. We need to be consistent in how we treat leases, lessees and the rights they have, and how they acquire additional rights and how they pay for them.

Under a leasehold system, the territory seeks a payment of change of use charge for the use of extra property rights not already granted under the lease. If the territory did not levy such a charge and instead levied some form of development contribution, there would be no payment for the granting of these additional property rights. This would amount to abandonment of the leasehold system and the community's interest in the improved value of the land. Yet, Mr Speaker, the government's move today in proposing a reduction in the change of use charge to 50 per cent has been confirmed by the minister as simply the first step in moving towards a complete removal of CUC.

Mr Speaker, how important is the change of use charge? First of all, let us recognise that the ACT's most valuable fixed asset is its land; not ACTEW, not any other asset held by the territory, its land. Revenue from land, therefore, is an important stream of money for services in the ACT, and the change of use charge, whilst small compared to other land taxes and charges, is nevertheless a not insignificant amount. In the period from 1992-93 to 1997-98 the change of use charge raised $24.1 million in revenue. That is not an insignificant amount of money.

What we have to address in this debate is whether or not it is appropriate to reduce the level of CUC. The government again argues that the introduction of a development contribution is the ultimate end and resolution of this problem, but the application of a development contribution in place of a change of use charge has been acknowledged by people in the development industry as a more attractive charge as they can see that the payment that they are making is being spent in ways that contribute to the overall amenity of the area in which their development takes place. Mr Speaker, this view again highlights the problems with removing a change of use charge.

Instead of having a charge which provides the entire community with the return on the improved value of the land, only a particular geographical area will benefit. This is inequitable and it would result in a loss of general revenue available to the territory overall. Mr Speaker, the key purpose of the leasehold system is to ensure that the community receives the full return on the improved value of the land it leases. Removal of CUC or a continued reduction in the level of CUC would remove the ability of the territory, that is, the community, to achieve this.

The appropriateness of a 50 per cent charge, Mr Speaker, has been advocated by Professor Nicholls in his report. It has been advocated by a majority report of the Standing Committee on Planning and Urban Services. Neither of those reports,

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