Page 3802 - Week 12 - Tuesday, 18 October 2005
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being in line or contemporary with market prices; valuations being done on the cheap by the Australian Valuation Office, which is starved of resources, and insufficient checking of the accuracy of valuations to ensure that they relate more closely to the market.
My concerns of potential flaws in the ACT’s valuation system were heightened by the investigation of the New South Wales ombudsman in recent weeks into the effectiveness of quality controls employed by the New South Wales valuer-general to try and achieve accuracy of land valuations. The ombudsman found that there was an unacceptable rate of error in a considerable number of valuations. The Australian standard for a margin of error in mass valuations is plus or minus 15 per cent, but 35 per cent of properties in New South Wales were found to be outside that range. Indeed, the ombudsman’s investigation revealed that insufficient time and resources were allocated to checking the accuracy of valuations. The results reflect poorly on the standards being achieved through the mass valuation system.
Of the objections to last year’s valuations in that work, approximately one in four had been allowed and the valuations changed. That inquiry recommended that the accuracy of valuations be checked more frequently, and said that international best practice calls for an assessment of accuracy every six years. New South Wales, in particular, has gone 16 years without a systematic review and correction of baseline valuation data.
The ombudsman’s report drew my attention because it confirmed what a number of people in the ACT are telling me, that is, that, because of the time lag for notification of sales, valuers for the government often do not have the most up-to-date value movements at the time they submit their values. The market may change when valuers take too long to catch up. The problem of incorrect valuations encountered by landholders was exacerbated in that particular review, with the valuer-general not providing the most relevant sales data used to value their property unless they specifically requested this information from a senior officer.
I raise these matters because, anecdotally, the report of the New South Wales ombudsman reflects the experience and concerns of ACT landholders. It will potentially be argued that it is different in New South Wales and that there is nothing to be concerned about here. But it has been my experience both here and working in politics that, if a moderate number of people contact you on an issue, there is probably a reasonably large number of people out there with that concern who have not taken the step of going to an elected representative.
I think there is an issue, particularly in relation to the 2004 valuations. There are those within the property industry in Canberra—in the valuation business—who share my concern. Examples have been cited to me of people they have acted for in areas such as Red Hill, who have seen reductions when they have challenged their rates. But if you are not in the group that is objecting, you are obviously not going to see any benefit. It troubles me that that situation may exist and I would certainly be urging the government to review the way in which revenue is raised from property, starting with the principles of efficiency, equity and simplicity.
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