Page 3198 - Week 10 - Wednesday, 18 October 2006
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estate agents they rather scarily tell me that they do not believe that Canberra rents are as high as they need to be and that there will be some major adjustments in the coming years, starting next year, which, if they are accurate about this, will see rents go up even more. The problem next year, if this is the case, will be far more terrible than it is now.
There is no doubt that the level of land tax that ACT property owners pay is high. Mr Mulcahy made that very clear and we did not hear Mr Stanhope address that issue. Considering that we have a budget that is downward in the delivery of services related to benchmarks from other states, it is interesting that it does not apply when it comes to land tax. I know from my own experience as a private market renter that land tax has quite a significant impact on housing affordability in the ACT. Indeed, I often wondered why my daughter who rents an inner urban house in Melbourne—it is certainly at least equivalent to the one that I am renting here—pays a good $120 less a week than I do, and I would say that land tax and other charges may have something to do with that. I am not an expert but I have often wondered why the rent for highly desirable properties in Melbourne is lower than for highly desirable properties in the ACT.
I also believe that we need an urgent and open review of the land tax system. That could happen in the context of the government’s affordable housing task force. Mr Stanhope implied that it is happening. However, we have no reason to believe that it is and we will not know until we see that first report in four weeks. I am looking forward to that report and hoping that it will be tabled in the Assembly and made public; otherwise, that affordable housing task force is doing the proverbial in the wind.
I was interested to note that neither Mr Stanhope nor Mr Mulcahy referred to The wealth of home report that was put together by ACT Shelter and ACTCOSS, because it gives quite a bit of attention to this issue, and it is nuanced attention too. It does not just say, “Get rid of land tax.” It posits it as an issue and suggests more than the three alternatives that Mr Stanhope insinuated were the only ways of dealing with this issue. I have said publicly that if we want to increase the supply of affordable private rental housing we do need to look at things like concessions on land tax for low rental housing. That is what I would like to see.
Taxes are a legitimate economic tool. I know that it is not fashionable to talk this way in a sort of so-called market-led economy, but governments, if they are going to implement taxes, should be aware of their impact on the sector that they are applying them to. Taxes can be a way of steering investment a certain way. I have been told a number of times that the taxes on housing in the ACT do steer property investors away from investing in housing in the ACT.
We should also realise that there have been times when a prudent person saving for their old age—and here I am not talking about wealthy capitalists—saw it as a good idea to buy an extra property and have it as a rental property. I have been told that a very large number of the private rental housing in the ACT is housing of that type, so it is not always fair to talk about greedy capitalists who are milking the ACT economy. We need also to realise that recent federal changes to superannuation will make it less attractive for those kinds of investors to invest in housing. So let us be very, very careful how we progress.
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