Page 1594 - Week 05 - Tuesday, 31 March 2009
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Going briefly to Mr Doszpot’s point on the property sector and the argument that the property sector is taxed too highly—I think that was the argument that Mr Doszpot was putting—this is an argument that the property sector has put for some time. However, when you actually go to the details, it is not supported by the facts. The Property Council claims that 52 per cent of taxation revenue in the ACT is from property taxes, fees and charges.
A comparison with other state governments in this case is wrong. The council has included in those figures local government taxes such as general rates. And so it needs to be recognised that in the ACT both state and local levels are combined and a significant proportion of the ACT’s taxation is from general rates, which contribute to the cost of essential services across the community. Taxes make up only 30 per cent of the total ACT government revenue. Land tax, conveyance duty and the change-of-use charge comprise only nine per cent of the total ACT government revenue.
The Property Council’s own study shows that, in comparison with other states, ACT taxes and charges on property development are low. Of the 13 residential growth markets considered in the Property Council’s report, Canberra had the third lowest level of state and local government taxes, behind only Adelaide and Mandurah, 74 kilometres south of Perth. ABS data shows that the proportion of taxes on property in the ACT is in line with other states.
The Property Council also argued that property taxes increased significantly as a result of the 2006-07 budget. Rather, the tax rates for conveyance duty, land tax and change-of-use charges were all left unchanged, while the fire and emergency services levy was introduced. Its purpose was to contribute to the costs of protecting property.
The Property Council also failed to mention that property investment activity in the ACT is strong. The value of finance commitments to individuals for the purchase of investment properties in the ACT is averaging around $96 million per month for the year ending February 2008, 37 per cent higher than the average value of investor commitments for the year ending February 2007 of $70 million.
Are taxes too high in the ACT? The data available from the Commonwealth Grants Commission and the ABS indicate that the ACT is not a high-taxing jurisdiction. According to their work, our taxation effort is around the same level as it is in New South Wales, Victoria and Western Australia and is lower than in South Australia. The ABS data indicate that the total state and local government taxation in the ACT is lower than the national average. The ACT’s per capita share of state and local government taxation is lower than in New South Wales and Western Australia.
The increases in taxes in the 2006-07 budget served to put the ACT’s public finances back on a sustainable footing while ensuring that the government could continue to provide high-quality public services. Brendan shakes his head and just does not believe this. But the issues—and we had it in question time today—raised are about service delivery and more money for disability services.
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