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Legislative Assembly for the ACT: 2000 Week 6 Hansard (25 May) . . Page.. 1929 ..

MR QUINLAN: I would be very pleased to see it. The formula we have has been manipulated to defeat the effects of the formula itself. It is going to dissolve to an absurdity in the long term. We do not support the increase in rates. We do not support the regressive change to the formula, and we expect to get rolled on the issue.

MS TUCKER (12.34 am): I note that this bill adjusts the rating factors to increase overall rates revenue by 2.5 per cent, and I think it is reasonable that rates revenue should rise over time to match increases in the consumer price index. However, I am concerned about the impacts of these rates increases on individual householders and about ensuring that rates increases are equitable. In particular, I am concerned, as Mr Quinlan is, that the fixed charge component of the rates is increasing faster than the overall rates amount. While overall rates revenue has increased by 2.5 per cent, the fixed charge has been increased by nearly 8 per cent. There was a similar increase in the previous financial year.

I note the government's intention to increase the fixed charge to 40 per cent of the total annual rates revenue. What this means is that the progressive nature of the rates charge and the differential between the bottom and the top rates are being eroded, and this is a retrograde step. The government just says that this is about applying the user-pays principle and distributing costs more evenly across property owners. This is okay up to a point, but the government seems to forget that the user-pays principle has to be balanced against the principles of social justice. The government is not taking into account people's ability to pay and the principle that those who have a greater ability to pay should pay more to make up for those who cannot pay.

There has been a longstanding principle with rates that those property owners who can afford to live on highly valued land should pay more than those people in low-valued properties. The government is steadily eroding this principle through increasing the fixed rates charge so that over time rates charges will be reduced to a narrower band which will proportionately increase the rates for lower income earners and save the wealthy landowners. This is an inequitable approach to raising rates revenue, but it seems to be consistent with this government's position on their version of social capital.

MR HUMPHRIES (Treasurer, Attorney-General and Minister for Justice and Community Safety) (12.36 am), in reply: Mr Speaker, I thank members for their support for this legislation. The legislation will give us a projected outcome for rates revenue for the next financial year, which is measured to be the amount of rates collected this year plus the inflation rate projected for next year. That is approximately right.

I note Mr Quinlan's aspiration to reform the system. I wish him great luck in that endeavour, but I make a prediction. If we ever get a Labor government and Mr Quinlan is part of it and is looking after the rates system, I predict that he will announce only minor changes, if any, to the rates system. I predict that he will reduce the fixed charge very marginally, if at all, because at the end of the day there are too many volatile factors involved in allowing the fixed charge to be lower than it is at approximately the present level. No government wants to be in a position of having huge fluctuations in rates because of fluctuations in land prices. That is the modest prediction I make as I gaze into my crystal ball. I thank members for their support for the bill.

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