Page 2185 - Week 06 - Tuesday, 21 June 2011
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At the end of the day we can talk about the poor drafting; we can talk about the legibility; we can talk about the need for the oracle to try and solve it. Call me silly, but perhaps this will end up in court, because it is unclear. We will be back, I suspect, to make rectification on this.
At the end of the day, what this government is proposing is simply a great big new tax. We can call it a charge—we hear the mirth from those opposite—but it is simply a great big new tax imposed on change of use or on lease variations. It is important to emphasise that it is a tax. You can have obfuscation—you can call it a change of use charge; you can call it a lease variation charge—but at the end of the day a tax is a tax. The current Treasurer knows that. She actually noted it in her presentation speech. She said, “The charge is being classified and treated as a tax in our accounts.”
Ms Gallagher: That is right.
MR SMYTH: It has been classified—
Ms Gallagher: Yes, for compliance purposes it has been.
MR SMYTH: So to comply, it is being treated and classified as a tax.
Ms Gallagher: For compliance.
MR SMYTH: If you are complying and you look at it as a tax, then clearly it is a tax. The Treasurer also said that the charge had been brought within the purview of the Taxation Administration Act. What we are dealing with is a new or expanded great big tax on the ACT community. It is disingenuous not to call it a tax.
The argument is that there is some sort of return to the community. The community deserves the return. There is a spurious argument in there that the community somehow misses out on reaping the benefits of properties which increase in value. The government never misses out. The government, through its rates, picks up the increases in those property values.
Consider how the rating system works. Rates are imposed on the value of the property. The value of a property reflects its position in the market. If a property has undergone a change of use or a lease variation and has increased its value, there will be an increased return for the community—and not as a one-off; there is an ongoing increase.
We have the case where we are being told by people in the industry and by people in the community that this will mean that fewer properties, fewer units, will go onto a given block. We all talk about increased density and we all talk about the high cost of increased infrastructure and avoiding urban sprawl, but we actually have here a tax that will contribute to that. Nobody has debunked that. This will lead to fewer units going onto blocks in the inner city, and that is not desirable.
This is a tax on young people trying to get into the market; this will ultimately be a tax and a disincentive for older people trying to move out of the market; and this will
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