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Legislative Assembly for the ACT: 2004 Week 09 Hansard (Wednesday, 18 August 2004) . . Page.. 3818 ..

The bill includes rezoning to enforce affordable housing as an infrastructure charge or a de facto betterment tax. This tax will impact heavily and unfairly upon a narrow segment of the ACT economy and developers may consider exiting the ACT property market due to the tax which would place further pressure on a residential housing market that may well be softening and slowing down. We have seen very significant developments across our border—developments that would obviously be encouraged by the existence of this particular requirement.

What’s more important as well, I think, is that this is bad legislation in as much as it is going to confuse a couple of objectives. Where, on the one hand, we have objectives and decent planning and built form of a high standard—and we have all in this place discussed sustainability—this bill would cross-fertilise that objective with objectives relating to affordable housing. And that just does not strike us as good management. In fact, that is a recipe for bad management. So we are concerned as to the confusion that this bill would create between the objective of decent planning and presentation versus the objective of providing affordable housing. Both are decent objectives in themselves but both of them would become suboptimal if they were interdependent, as this bill would require.

It is as well to remember that the ACT economy, the ACT’s capacity to provide a whole raft of community services, including affordable housing, public housing and the highest level of public housing in the nation, depends upon a thriving economy. That economy, whether we like it or not, at this stage depends on actual growth. We have a high level of dependence upon taxes associated with land use, land development and of course revenue derived directly from land sales. Should we place impositions and conditions upon development of land, we will quite obviously be providing an inhibition to that level of growth, that level of revenue generation and of course the level of revenue that can then be redistributed within the community. It is probably an economically inefficient way of achieving objectives. As I have said from the start, we have no argument, of course, with the objectives and their nobility; we just believe that this is somewhat naive confusion or an attempt to confuse a couple of basic objectives.

So there is a possibility that there will be distortion within the housing market, pushing developers across the border. Of course, at the end of the day, any developer is still going to want to protect the profit margin, if the market can actually sustain it. The cost of this provision is going to be factored into the rest of the housing prices anyway, which will either be a cost to the house buyer and therefore the community or to the community itself and could have, as I said, that negative impact upon the housing market itself.

Quite clearly, in any enlightened economy, government has to interpose itself in various processes to make sure that there is balance, equity and fairness. But, at the same time, governments ought still continue to work for the maximum amount of choice for people within that community. It is a balancing act that the government would always have to take. But I do believe there should be allowed the capacity for developments to be developments of choice and developments that satisfy a particular market.

That is not to say that the government is not interested in the concept of a portion of a development being dedicated to affordable housing. As far as we are concerned, that should be contained to those developments in which the government is involved. The

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