Page 3206 - Week 10 - Wednesday, 18 October 2006
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despite there being a crisis in rental accommodation, we should do nothing? Are we being told to just sit back and ignore it? We are being told: “I will have a committee look at it but I actually do not believe in doing anything. I do not want to reform it, I do not want to reduce it and I do not want to make it more competitive.” This is just an extraordinary view. We have heard yet another tirade, and they wear thin after a while. I have worked out my Christmas present for the Chief Minister. I am going to get him the video Anger Management because I reckon if he watches it he may find some relationship between the story line and his performances in this place.
But these are serious issues that affect people. This is not just a group of wealthy landlords. Dr Foskey obviously gets out and about in her electorate, and I give her credit for that too. She meets people around Hughes and other places, as I do. I have talked to people at the shops who have said, “Look, I am widowed and I have a second place. This is what I have got basically to keep myself going.” Then they say to me that they just cannot make it work. It is fine when you have inflation like they might have in Latin America where values are rapidly growing every day. We have had strong capital growth in the ACT in the past six years, thanks in large part to the national economy and the growth in employment generated by the 5,000 to 7,000 jobs the commonwealth is creating here.
Can anybody on the other side of the chamber with any understanding of economics—I know that the minister does have a very sound understanding of economics; unfortunately he cannot implement it with this government—seriously tell me that if you were thousands and thousands of dollars worse off investing in property in the ACT, you would not go somewhere else where it is cheaper? The other day the Chief Minister got up and said, “It is better here. It is better than Victoria. The opposition likes to quote Victoria. We do not aggregate like they do in Victoria. We tax each house separately.” So what happens? Let us look at the ACT. If you have a property worth around $350,000, you will get hit $4,900. If you have two such properties in the ACT that will add up to two lots of $4,900. So you are up to $9,800. Go down to Victoria and see what you would pay there. If we add those two properties together and if the next scale is $750,000, in Victoria you will be paying $1,930 tax. So where is the great concession in taxing collectively?
How could you convince anybody that they should pay $8,000 more tax on their investment exercise by buying in the ACT rather than going down to Melbourne and buying a couple of properties there? You would either have to be stuck in the ACT market or be given some very poor advice from your tax adviser. There are people who are, in effect, stuck here and want to make Canberra their ultimate home. There are people in the Department of Foreign Affairs and Trade who use Canberra as their base and buy a home here. Some people in the Australian defence forces who are overseas at the moment in some pretty tough environments are basically getting slugged when they rent out their home.
Mr Barr: It is leasehold land, Richard, so they do get a tax deduction, thank you.
MR MULCAHY: Mr Barr says they get some incentives here but I am putting it to you that there is no incentive to invest in rental property in Canberra under this current regime. It has to be put on a competitive basis.
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