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Legislative Assembly for the ACT: 2000 Week 5 Hansard (9 May) . . Page.. 1327 ..

MR QUINLAN (continuing):

or later, we cannot say we will build the economy on developments because something has to happen in those developments to complete the process.

If we are going to subsidise economic activity and we are going to throw money around, we should be throwing it around at the things that we want to happen. We do support the payroll tax initiative that the government has taken. We do it because that applies to business generally. It does not just apply to building places where business will happen or places where people will live. It actually goes to economic activity generally.

I have a fear that the phenomenon that we have already witnessed in the ACT could recur when times are not so good. We have seen Commonwealth departments moving out of old buildings because somebody, with a subsidy from the community, has built a new purpose-built building with all the gee whiz accoutrements and the capacity to carry the new electronic and digital accoutrements that buildings want. So we have new activity, we have new buildings going up and being occupied, and we have Hobart Place, or something like that, turning into commercial wasteland. That seems to me to be dumb planning. That is because, as I started out with these particular points that I wanted to make, there is a dumb logic in being indiscriminate in subsidising economic activity because you need some.

If we are going to be smart at all, we will continue to collect betterment tax on all developments. If there are some developments that swing on that particular element and we consciously at the time want that development to go ahead, whether it be for job creation or whether it just be a particular development that is desirable within the city, then we make a conscious decision to provide a subsidy for it. Equally, we take those funds that we might accrue by applying a betterment tax and we apply them to other economic activity beyond building the commercial blocks or housing.

It just seems to me that this is an over simplistic argument that the government has put forward. As has been pointed out and admitted, it is totally based on anecdotal evidence. Like virtually everybody in this place, I am sure, I have been lobbied by particular interests on the particular topic and I did ask for some examples I could specifically look at and say, "That might have happened and that might not have happened had there been a betterment tax or a different level of betterment tax." Again, it still does devolve down to anecdotal evidence and it is quite clear that there are not many cases that can be put forward and people can say, "There is a particular development that did not take place simply because of betterment tax." Even if that is the case, why would we then say, "Oh well, there are one or two developments we did not get because the betterment tax was too high. Therefore every development should enjoy this particular subsidy," as Mr Humphries has called it.

As I close, I would like to repeat my request of Mr Smyth. If there are economic forces in operation, and market forces is in operation, then why doesn't this bill just increase the value that accrues to the original owner of the block and effectively have no real impact on the final cost of the development.

MR SMYTH (Minister for Urban Services) (5.33), in reply: Mr Speaker, we have heard from all sides various arguments for and against this drop of change of use charge from 75 per cent to 50 per cent, and I think it is quite clear that the lines are fairly well drawn.

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