Page 1792 - Week 07 - Tuesday, 21 August 2007
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would justify this kind of departure from the current arrangement. There have been many comments from industry on this, but I refer the Assembly to the Law Society, which appeared before the planning and environment committee on this issue, and whose representative said:
The law society is faced with a very unusual position. It relates to the issue of “use” as development … The society's position is that it is unable to support the bill if the concept of “use” as development remains.
That is a significant problem. That is why we are seeking to amend this and many other clauses that use the terminology or are associated with use as development. That is the problem with the initial bill. In our opinion it is a fundamental undermining of the leasehold system, of the certainty that goes with the bundle of rights that are purchased by leaseholders in those circumstances.
Since this bill was introduced the government has taken seriously some of the concerns expressed from industry in relation to this issue and a number of proposed government amendments will deal with this issue. But the reason that I will be proceeding with this amendment and with further amendments to remove use as development is that we do not think the government’s solution solves the problem. It is quite a complex drafting exercise. However, my understanding is that, in the circumstances where a person has a number of use rights and seeks to take up a different use and where that would not in the ordinary course involve a development application or development approval, use does not come into it. So in that first instance, part of that problem has been solved. So the government has gone some way in its amendments to fixing this issue, which is good.
But where there is the alteration of a structure or a new building, the development application comes in, as it ordinarily would. That still brings in this concept of use as development, which then applies in those circumstances. So in some circumstances it will not apply—where, in the ordinary course, you would not need a development application—but where it does, not only is the development assessed on its merits, but also the use. So persons who paid for certain uses and want to take up those uses that they feel they have a right to not only have to go through the rigmarole of the development application, which is reasonable, because they are building a structure or altering a structure significantly, but they also have to be subjected to the uncertainty of not knowing whether they are going to be able to take up that use, which is not a change of use in the way we understand it now. It is simply taking up the use which is available to them under the lease. That is why, whilst the government amendments have improved the situation, they have not improved it enough.
It is my contention, and it is the opposition's contention, that this failure to fix this will lead to uncertainty and undermine the leasehold system as we know it. The leasehold system has served the territory fairly well. It is well understood in Canberra, even though it is perhaps a bit of a mystery to outsiders and investors, but that is another debate. The reality is that it works fairly well, and industry and Canberrans are broadly comfortable with it. This bill muddies the waters around certainty in the purchase of certain rights. There are valuation issues and the like that go with that. Will we see discounted valuations to take account of the risk of these new provisions which may see a person not getting all of the rights that they thought they were
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