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Legislative Assembly for the ACT: 2001 Week 1 Hansard (14 February) . . Page.. 103 ..

MR KAINE (continuing):

However, in my mind that is a second best alternative, because I believe that a 100 per cent rate is a punitive rate. It seems to rest on the assumption that the betterment tax rate is the only way in which the community receives a return for investment in assets in the territory. Of course that is not true. Once a block of land is redeveloped and a higher use is applied to it, then the government reaps a higher rate of tax return, from business taxes of all kinds that apply to a highly developed block as opposed to one, for example, that has only a single residential unit on it. So it is not true to say that the only way the community can be compensated for the increased value of a property is through the betterment tax.

On the other hand, I think there is some validity to the argument that 100 per cent betterment tax works contrary to the redevelopment of sites which otherwise can fall into disrepair and disuse, with no reasonable return to the community at all. There has been some dispute about the extent to which that is true, but I think there is an element of truth to it, and I would much prefer to have a rate which could not be seen to be discouraging redevelopment than to have one which led to those people who want to spend their money to improve the city to argue that it is not in their interests to redevelop, because of the rate of betterment tax. That is a specious argument. We should clarify the situation and remove that basis for argument and disputation.

Mr Smyth is bringing forward an amendment which reintroduces the 75 per cent rate, which I think is a fair and equitable rate for everybody. As I say, I think it is something that the government should have done rather than allowing the sunset clause to pass and the 100 per cent rate to apply. They are now doing it. I prefer that approach to the one proposed by Mr Corbell, because it is not a matter for discretion by the minister.

Although Mr Corbell's proposal is a non-preferred alternative, it is at least an alternative to the 100 per cent, but it still leaves it in the hands of the minister make a determination in particular circumstances. I much prefer the clarity of a specified rate. There is a certainty about it. Everybody knows what rate is going to apply if a development is proposed, it is in the interests of the community. It is in the interests of those people who are going to spend their money on redevelopment proposals, and it makes for more certainty in the long term for the redevelopment of those parts of Canberra which in some cases at the moment need redeveloping. There will always be some parts of Canberra that need redeveloping as there is a decline in the condition of buildings, as land use changes and as the focus of business activity moves from one place within Canberra to another. We see this, for example, in some of the old shopping centres which are now struggling to survive. Money should be spent on them to revitalise them, but in some cases it is not forthcoming. A 100 per cent betterment tax discourages redevelopment of areas like that.

On balance, although it is a belated action by the government and by the minister, I prefer the approach now being taken by the minister over the non-preferred alternative that Mr Corbell is putting to us, and I will support the government's amendments.

MR QUINLAN (11.22): Because of what has been said, it is necessary to defend 100 per cent change of use charge. First, I would like to observe the obvious. A prime determinant of value land is its approved use, and that approval process belongs to the community. It is not a gift that should necessarily befall particular individuals by some sort of random action.

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