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Legislative Assembly for the ACT: 2001 Week 1 Hansard (14 February) . . Page.. 149 ..

MR OSBORNE (continuing):

many times in this place, they are not issues that I actively pursue. I like to think that I do give them a lot of thought.

Unlike most members, when I became an MLA I had no preconceived position or ideological framework in regard to betterment. I have been able to look at the issues uncluttered and, from a number of sources, I cobbled together the framework for my decision for 75 per cent. The general principle with leasehold is that it is a lesser title than freehold. The person owning the underlying title, the government, wants to exercise some ongoing control over the use to which the land can be put. In other jurisdictions a continuous source is also available in the form of ground rent.

The ACT is unusual for two reasons. Firstly, the city has grown rapidly, so that uses, particularly in the centre, are no longer an efficient use of land. Secondly, the city has a lot of land held by charitable and sporting bodies and national associations. It is in the public interest that from time to time some of these holdings are redeveloped. Obviously, land is a public asset and the community has an interest when a parcel of land becomes more profitable when zoned for other uses. The public has a right to protect its interest and to ensure the community gets a fair return.

The question for us is to consider how much. The opposition's theory is that as the community owns the land it should receive the whole of the increase in its value when the land is put to a more valuable use. However, this thinking is flawed. There is no philosophical argument that ownership of land entitles the owner to all increases in its value. The ACT government, even though it is the owner of all the land in the territory, receives none of the increases in land sales resulting from such factors as population growth, location, changing demand, provision of schools, et cetera. The whole of that goes to the lessees, and always has.

The true value of land lies not in its ownership but in the right of occupancy, and it is the right of occupancy, owned by the lessees in perpetuity, not by the government, which is in demand for redevelopment. It is unrealistic to expect that lessees are going to release their right of occupancy of the land for redevelopment unless they receive some incentive to do so. In other words, both lessees and the government have rights and responsibilities in relation to land that is needed for redevelopment, and action is required by both parties before that can happen. If both parties do so there can be shared benefit. As most Canberra home owners have paid, and the government has received, the equivalent of freehold prices for a large proportion of the territory land, those home owners have a strong moral right to at least a portion of any added value as a result of the lease variation.

In the states where the freehold system prevails there is no equivalent to the change of use charge that home owners have to pay if the land is rezoned. It is a basic economic reality that the higher the tax the greater disincentive to continue an activity. There is no evidence to suggest that an exorbitant windfall is needed to encourage development.

Mr Speaker, the 75 per cent compromise has been in operation for some time with, I think, good overall results.

Mr Hird's amendment No 1, to Mr Smyth's amendment No 1, agreed to.

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