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Legislative Assembly for the ACT: 2001 Week 5 Hansard (3 May) . . Page.. 1405 ..

MR SMYTH (continuing):

The second change imposes a requirement on applications for a lease variation to provide a valuation report when their application is lodged. Both changes will add certainty to the change of use charge system which, as we all know, has long been plagued by confusion and controversy.

For several years the act and regulations have allowed a ministerial discretion to approve or not approve a remission or increase in a change of use charge. There has been, over those years, general agreement that there should be no such discretion. Just as any prescribed increase should be mandatory, so should there be certainty that any remission will apply. Accordingly, the act and relevant regulations have been amended to make it clear that if a remission or increase is provided for, then that is what must be done.

The amendment of sections 184C and 187C completes the government's undertaking, given some time ago, to make remissions and increases of the charge clearer. Clearly, there will be circumstances in which any government would wish to relieve a person of a legal obligation to pay an amount of money. There will be hardship cases, or there may be policy reasons for encouraging an activity through providing financial incentives. In those circumstances it will still be possible for the Treasurer to waive the charge.

There is an opportunity to remove another of the main sources of uncertainty in the change of use charge. When the land act commenced in April 1992 the system for determining and enforcing change of use charges, or betterment, which was a judicial process under the old legislation, became an administrative process. Determinations of the charge became the responsibility of the minister, and decisions as to how much is to be paid became subject to review in the Administrative Appeals Tribunal.

While there is nothing fundamentally wrong with that process, the practice has been that proponents generally seek to have any significant charge reviewed. The evidence relied on in the AAT is often only that prepared by the Australian Valuation Office.

In May 1999, when Professor Des Nicholls presented his report entitled A study of betterment and the change of use charge in the Australian Capital Territory, he noted that relevant evidence can be difficult to access and that, because property valuation is an inexact science, valuers often struggle to agree on the appropriate level of change of use charge. The government's valuers often have to determine a charge without any obligation on the proponent to divulge any relevant information. Professor Nicholls recommended, at recommendation 6, that lease variation applications must be accompanied by detailed valuations of the before and after values, together with a calculation of added value and the resultant amount of change of use charge.

This bill therefore introduces a requirement, at the point of lodging a lease variation application, that the application be accompanied by an assessment that sets out the before and after values required to assess the change of use charge should the application be approved.

In respect of that change, I note the following points. The assessment must be prepared by an accredited valuer. It will be possible for the territory to require, as a condition of any lease variation approval, a new assessment. This might be necessary if the approval differs in any way from the original application, or if the original assessment is not satisfactory. The territory will not be bound by the assessment provided by the

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