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Legislative Assembly for the ACT: 2000 Week 5 Hansard (9 May) . . Page.. 1320 ..

MS TUCKER (continuing):

of betterment and change of use by Professor Nicholls, which recommended that the change of use charge be reduced even further to 50 per cent.

Not surprisingly, the government supported the 50 per cent rate and introduced the necessary legislation which is the subject of this debate now, but, fortunately, the Nicholls report was referred to the urban services committee for inquiry, and the change of use charge has stayed at 75 per cent, with a sunset clause of 30 September when it will go back to 100 per cent.

The committee split on the issue of the appropriate level of change of use charge, with Mr Corbell dissenting from the majority report. On examining the report I found Mr Corbell's dissenting report, which recommended that the change of use charge revert to 100 per cent, more compelling and consistent with our views than the majority report which just echoes the Nicholls report call for a 50 per cent change of use charge.

It has to be remembered that land is the key asset in the ACT. We are a small territory and we do not have mineral resources or significant agricultural resources. It is imperative that governments do not squander the value of this land. An original objective of the ACT's leasehold system was that increases in land value that accrue as the city develops should be returned to the community as a whole and not to individual leaseholders through speculative gain. The change of use charge does this by returning to the government that increase in land value on particular blocks where the lease purpose clause is changed from a lower to a higher value use.

It is quite clear to me that anything less than a 100 per cent change of use charge represents a subsidy to those developers who are able to secure a change of lease purpose. For example, if a developer bought a vacant block, say in Gungahlin, that was already identified for multi-unit development, they would have to pay the full market value for that block for that purpose. However, if a developer bought some adjacent blocks in, say, North Canberra, which currently have single dwellings on them; they would pay the market value for single houses in that area. However, if the developer then gets a change of lease purpose to allow multi-unit development on the amalgamated block, the value of the land would be increased, but he only paid the lower value to buy the blocks.

If the change of use charge is 100 per cent, then that increase in value is returned to the government and the community, and the developer would be on the same footing as the developer in Gungahlin. However, if the change of use charge is 50 per cent, the developer in North Canberra is getting a windfall gain on the land value relative to the Gungahlin developer.

The development lobby keeps pushing the line that this subsidy is necessary to facilitate redevelopment and that a 100 per cent change of use charge has discouraged particular development proposals in the past.

At 5 pm the debate was interrupted in accordance with standing order 34. The motion for the adjournment of the Assembly having been put and negatived, the debate was resumed.

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