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Legislative Assembly for the ACT: 2002 Week 7 Hansard (4 June) . . Page.. 1812 ..

MS DUNDAS (continuing):

unimproved land values to determine the level of rates. It will also uses CPI figures from last year.

The government has lauded the benefits of using actual CPI figures rather than projected CPI figures. The benefits of that are debatable, especially as, according to the budget consultation papers the government released earlier this year, the CPI increase for the coming financial year is estimated to be 2.5 per cent. Also, the current estimate of $111 million in general rates given by the Treasurer in his presentation speech is 13 per cent higher than last year's revenue. Inflation is running at 1.7 per cent for the year to March. So, after already paying for a massive increase above inflation this financial year, the government wishes the people of Canberra to pay more than their own treasury estimates of the CPI next financial year.

I note that this bill is, once again, an interim measure that will expire at the end of the next financial year, so that we can, as in every year past, change this part of the act again. It is of concern that a number of pieces of legislation are being introduced in this Assembly as transient measures. Whilst in this case I understand the reasoning, having been informed that the Rates and Land Tax Act is currently under review by the Department of the Treasury, I am increasingly disturbed about the reliance of this government on interim legislation to fix up immediate problems while drawing out long-term decisions on future legislation. That is not a good way to make law.

It does not help people and organisations in Canberra to plan for their long-term future if the state of territory legislation is perceived to be in a constant state of flux, but the Australian Democrats do welcome the review of general rates and land tax. A number of issues need to be examined in any such review and I hope that the government will give serious consideration to all of them.

General rates are made up of two parts-a fixed payment on the first $19,000 of the land value and a percentage payment on the land value above $19,000. Over the past few years, the fixed payment has been steadily increasing while the variable rate has been decreasing. This has occurred to a point where general rates have become regressive; that is, Canberrans are now paying a higher rate on the first $19,000 than on the land value above $19,000. Moreover, both rates and land tax are currently levied on the unimproved value of land. This continues to place an unfair burden on those who, despite having very modest homes, are charged higher taxes because they live in central Canberra than those who live in far more luxurious homes further afield. I strongly urge the government to consider levying rates and land tax on the improved value of homes and businesses, which both would allow a much lower rate to be charged and better reflects the ability of our citizens to pay.

Other areas that I suggest need examination include the effects on social equity that taxes produce. I have already mentioned the fact that general rates are currently regressive. In addition, I note that, despite massive rises in land prices over many years, the taxation bracket has remained at $19,000. The government should seriously consider looking at creating a rates-free threshold and lift it way beyond the $19,000 mark.

In particular, the effects on our older citizens need to be closely inspected, as many retired Canberrans are being squeezed by ever higher rates and are often forced to move from family homes where they have lived for many years because ever-increasing costs

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