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Legislative Assembly for the ACT: 2000 Week 5 Hansard (9 May) . . Page.. 1324 ..

MR HUMPHRIES (continuing):

So the question here is not whether the private benefits that accrue from a change of use should be retained by the private landowner in whose hands the benefit accrues, but whether or not that private benefit creates a degree of public benefit in turn to warrant the subsidy of that activity from the public purse.

This is another point of contention in this debate: To what extent does a low rate of betterment or change of use charge produce economic activity which would otherwise not occur? Mr Speaker, I have had many representations on that subject over the years.

Mr Berry: All anecdotal.

MR HUMPHRIES: All anecdotal. That is absolutely true, Mr Berry, because no-one can prove absolutely that a particular level of taxation at a particular rate produces or discourages economic activity. That is quite true. But governments of all persuasions have clearly believed over the years that some things can be taxed so heavily as to discourage their occurrence, to dissuade people from doing those things, and others have believed that the provision of public subsidies can be sufficiently significant to ensure that those things are encouraged to occur.

Does this characterise betterment in the ACT at this time? I do not know, Mr Speaker, from my own experience, but I am prepared to rely upon the clear evidence in a detailed study conducted by Professor Des Nicholls of the Australian National University. I am prepared to accept the view of the independent arbiter on the subject. I understand he is an economist.

Mr Corbell: He is a statistician.

MR HUMPHRIES: A statistician; I beg your pardon. He has said that his analysis suggests a level of economic activity generated by the level of public subsidy less than a 100 per cent change of use charge represents. That is the evidence we have in front of us. If that is to be supported, if that view is to be sustained, then clearly we need to consider reducing the level of betterment in this town to have a level of economic activity which we consider desirable.

Perhaps some members do not consider that we need to further push down the disincentives to job creation and employment growth because the levels of employment are quite satisfactory. Mr Speaker, I do not think any member of this place believes that even the relatively low levels of unemployment in the ACT at the present time are satisfactory. There are still several thousand people in this territory who do not have employment and, of course, economic conditions can change very quickly. It is incumbent upon us to continue to push downwards on unemployment and to bring it as near as we can to a level of zero unemployment. It may not be zero per cent, but it should certainly be as low as we can make it happen.

Mr Speaker, I think the evidence is clear that you reduce taxation levels on business and you produce a level of economic activity. What is more, I think members in this place believe, for the most part, that that is so. Why do I say that? I say that because of what occurred back in 1996 or 1997 when the Assembly agreed that betterment taxes should be lowered to 75 per cent from 100 per cent while the inquiry by Professor Nicholls was going on.

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