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Legislative Assembly for the ACT: 2004 Week 09 Hansard (Thursday, 19 August 2004) . . Page.. 3963 ..

importantly, it will enable the authority to consider the history of lease transfers and other relevant information in relation to both the lessee and proposed lessee.

The amendments to section 178 of the act address an existing deficiency in the provision, which restricted its application to original leases. This section of the act has rarely been used for surrenders because the deficiencies in section 180 mean that consent to transfer is rarely refused. With the proposed amendments to section 180, it is an appropriate opportunity to modify the operation of section 178 and its disallowable instrument. The amendments to section 178 will allow for the payment on surrender or termination of the lease to be determined by regulation and it is extended to include subsequent lessees. The regulations would maintain the current payment for an original lessee of an existing residential lease.

The payment on surrender or termination of a residential lease where the lessee is not the original lessee, will be the lessee’s purchase price or the current market price, whichever is the lesser. Without the provision for paying the lesser of the two amounts, a significant drop in land prices may encourage the lessee who bought, say, at a very high price to surrender the lease to the territory in order to minimise financial loss. Likewise, if a lessee bought in a low market and the legislation required the payment of market value on surrender, there would be an incentive to surrender a lease in a high market. Both of these scenarios would make the territory the provider of a guaranteed speculative gain. Clearly, this would be an unacceptable arrangement.

The disallowable instrument for section 178 restricts the payment on surrender to residential leases that allow for three or fewer dwellings. Again, this aligns with the reality that speculative sales occur primarily on single residential dwellings. This is important legislation. As Ms Dundas has pointed out, we have seen a level of land speculation in a very heated market that we have not previously seen. It is important that we protect that unearned increment and, more importantly, protect the orderly development of the city and our residential areas.

In conclusion, I simply say two things. The first is that you simply need to look at the figures publicly available on the types of profits that were being made through land speculation to consider that these were not legitimate transfers of land. For example, land in Amaroo purchased on 15 December 2000 for $137,000, sold less than a week later for $328,000, or a profit $190,000. In Nicholls, a property purchased on 11 October 1999 for $134,000 sold at approximately the end of that month—about two weeks later—for $299,000 or an unearned increment of $165,800.

These are the sorts of speculative, unproductive exchanges of land that do nothing to enhance the value of the suburb in which the land exists, nothing to enhance the residential amenity of the area and nothing to improve the land, but only to make a profit for the person who has held that land. Whilst we accept absolutely that people will make a capital gain on properties that they own or have a mortgage over and which they invest in and improve, they should not be allowed to make these sorts of unearned improvements in value without investing anything in the property itself or improving its value.

So, I thank members for their support. The government has indicated that, given the time in which the opposition’s amendments were presented, it is appropriate to consider them

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