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Legislative Assembly for the ACT: 2002 Week 8 Hansard (25 June) . . Page.. 2210 ..

The government aims to improve the fairness and progressiveness of the ACT tax system by minimising the additional tax burden on the less well-off sectors of the community.

From 1 July 2002, the rates of duty on conveyancing will increase to generally match the combined mortgage duty and conveyances duty imposed in New South Wales and other jurisdictions. The new rates will have minimal impacts on properties at or below average ACT house prices.

Payroll tax revenue will increase marginally for 2002-03, due to the changes applied to the value of fringe benefit tax and the inclusion of the definition of eligible termination payments in the payroll base. Again, the majority of ACT small and medium businesses will not be affected, as they remain tax free, or well below or well below the national average under the tax threshold of $1.25 million, which is the most generous in Australia. Contrary to public reports, the threshold will not be lowered.

Land tax exemption currently available to properties held by companies and trusts will also be reduced. This will provide greater equity in the land tax regime and lessen opportunities for tax avoidance. Exemptions will still be available for various trusts set up for compassionate purposes and for companies and trusts held by builders and developers for construction purposes.

In recent years, while residential land valuation has increased significantly, land valuation for the non-residential sector has remained stable, despite strong economic indicators and strong profitability experienced by most businesses. Non-residential properties will pay marginally increased land tax rates, partly to restore the contribution of the business sector to the land tax base.

It is to be remembered that, despite significant increases in land values, all general rate increases were pegged at CPI. This represents a considerable saving for all property owners this year.

Last year the territory government provided $30 million to the workers compensation supplementation fund as a result of the HIH collapse. The outstanding liability of the fund is around $61 million. The previous government had also proposed a levy on workers compensation premiums this year in order to fund the remaining burden, following similar action in other jurisdictions. The government has decided not to apply this levy this year. This should save the average business around $150 in premiums. Legislation will, however, be introduced later this year to allow for a levy, when a final decision is made and more is known about the appropriate size of the levy to be made.

The increase in motor vehicle registration fees and the introduction of paid parking in Belconnen and Tuggeranong are integral to the government's transport strategy, which is designed to provide incentives to encourage transport through modes other than private cars.

It is important to highlight, Mr Speaker, that the revenue measures contained in this budget are far outweighed by the very significant increases in services this government will provide to the people of Canberra. In short, the money is very well spent.

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