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Legislative Assembly for the ACT: 2000 Week 8 Hansard (29 August) . . Page.. 2522 ..

MR SMYTH (continuing):

Mr Speaker, the Land (Planning and Environment) Amendment Bill 2000 (No 4) repeals sections 184B and 187B of the land act. The effect of these repeals is that the current rate of change of use charge will continue at 75 per cent of added value. Sections 184B and 187B are sunset clauses that affect the formula prescribed to calculate the change of use charge. The sections were inserted into the act during the Assembly's 1996 debate of the major amendments that followed the Stein inquiry.

The change of use charge formula in the act currently provides for the change to be calculated at 75 per cent of any added value that results from the variation of a lease or the consolidation or subdivision of land. That rate was decided on as the appropriate rate in accordance with the recommendation of the Stein report. The sunset clauses provide for the change to be calculated at 100 per cent of added value from 30 September 2000.

Mr Speaker, as members of the Assembly would be aware, the government introduced into the Assembly in mid-1999 a bill to reduce the rate of change of use charge from 75 per cent to 50 per cent. That bill followed recommendations of the Nicholls report, which was referred to the Planning and Urban Services Committee on 1 July 1999. That bill was defeated in the Assembly on 9 May 2000. As a result, the rate of change of use charge will become 100 per cent on 30 September 2000 unless the act is amended.

Mr Speaker, I wish to point out to the members of the Assembly-and I know that I am not the first to do so-that the methodology for assessing betterment, or the change of use charge, remained the same from the 1971 to 1990. It has changed seven times since then. The Nicholls report made several significant recommendations about reviewing the current system. I should point out that this Assembly wholeheartedly endorsed the appointment of Professor Nicholls to review betterment. The majority of the Planning and Urban Services Committee endorsed the report's recommendations. Indeed, Mr Corbell, in his dissenting report, also recommended that possible changes be examined.

The amendments will give the government adequate time to undertake a comprehensive and lasting review of this system. It must involve a detailed examination of the rationale for the system, its connection with other elements of the leasehold and land use planning policy, and its economic and administrative sustainability.

The process of examination has already begun. I intend to prepare within the next few months a paper outlining a range of options for the review of the current system. The objective of the review will be to eliminate, as far as possible, the complexity and cost involved in securing what we must all acknowledge to be a relatively small amount of income for the territory. In fact, change of use receipts from 1992-93 to 1997-98 represent only 3.1 per cent of the total revenue over that period from change of use charge, land tax, land rents and rates. You can find that information at table 1 in the Nicholls report.

In his report, Professor Nicholls espoused the benefits of a system that would give certainty for all. In that respect, he found the New South Wales section 94 contributions scheme to provide the benefits of known contributions in advance, which proponents could factor into their whole-of-development calculations. In contrast, the current change of use charge calculations are undertaken by the AVO after an approval is given, when a thorough determination of any increase in value can be made. The assessment is then

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