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Legislative Assembly for the ACT: 2000 Week 5 Hansard (9 May) . . Page.. 1321 ..

MS TUCKER: However, this claim is assuming the proportions of an urban myth. Professor Nicholls admitted that such claims were only anecdotal and he could not find any correlation between the level of the change of use charge and the level of building activity in the ACT. In fact, he found that it was difficult if not impossible to isolate the effects of the change of use charge on investment from other factors affecting investment in the ACT, such as the demand for office space and rates of population growth.

Mr Corbell also noted that the committee was presented with evidence about some development not proceeding because of the change of use charge, but that it was conceded that it was not the change of use charge alone that resulted in the development proposals not proceeding.

In fact, I would be very worried if government subsidies were artificially stimulating particular types of building development which do not match demand. From a planning perspective, development activity should be led by demand from building users and not by whether there is a subsidy available for the development. If the government wishes to promote particular types of development, such as its actions to promote the reuse of vacant office blocks in Civic, then it should do so in a direct and transparent manner that can be reviewed by the Assembly rather than just rely on the blunt mechanism of a reduced change of use charge on all lease purpose changes.

It has also been claimed that the various amendments to the change of use charge over the last decade have created uncertainty for the development sector, but it should be noted that this uncertainty has been brought on by the developers themselves by their own efforts to undermine the change of use charge.

I therefore do not see why the government should be giving away a revenue stream by reducing the change of use charge when there is an uncertain public benefit from this move, apart from the benefit to developers' profits and unverified impacts on development activity from the higher charge. I therefore will not be supporting this bill and want to allow the change of use charge to revert to 100 per cent as currently provided for in the land act, although I notice that Mr Moore has tabled an amendment seeking to omit 50 per cent and substitute 100 per cent. Right now, in this debate, I would support that first.

MR CORBELL (5.05): Thank you, Mr Speaker, and I thank members. I will soldier on. The government's proposal to move to a 50 per cent change of use charge does not address a range of important issues. One of those which I am particularly concerned about, and which the Labor Party is concerned about, is the change of use charge which relates to concessional leases. Currently the government allows CUC to be calculated as 75 per cent if the remaining period of the lease is paid out. Otherwise the calculation is 100 per cent.

It has become increasingly apparent in a range of draft variations presented to the Assembly that the process of permitting a 75 per cent payment has the potential to result in a windfall gain to the lessee at the expense of the territory. Mr Speaker, the government's proposal to move to a 50 per cent change of use charge does not address this issue. Instead of proceeding down this line, the government should be acting on the recommendations of the Stein report to ensure that a 100 per cent change of use charge is charged on all variations to concessional leases to prevent windfall gain.

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