Page 2189 - Week 06 - Tuesday, 21 June 2011
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arguments put forward by the Property Council or indeed the fact that the opposition has adopted the Property Council’s position in its entirety.
The charge has a sound economic base. It has been a part of the territory’s revenue system since 1971. It is all about payment for granting additional development rights to a lease. In essence, it is no different from the payments for a greenfield land site. It is correct and it is important to charge the market value for the additional development rights. If this is not something the Liberal Party supports, then they should be clear on how they would impose a lease variation charge. If it is not going to be based on the market value, what is it going to be based on or don’t you think it is a fair and reasonable charge to impose at all?
As an analogy, a soft drink company should in principle be expected to pay properly for the water it uses. That is an input to its product. It if is not charged the full price of water, it will have an unfair benefit and an unfair advantage over a company that pays the proper price of water. And of course there is no guarantee that the company will pass on the benefit to the consumer, especially if there is strong demand for the product. Likewise, there is no evidence that the benefits of low, fixed fees were passed on to home buyers—no evidence at all.
This leads to the next point, the apparent increase in charges. Indeed, there are significant increases compared to what was being paid before rectification. In one sense, that highlights the extent to which the community did not receive its due share of the additional development rights. But as I have previously drawn to members’ attention, the increase should not be attributed to codification.
Mr Coe: Bring up the communist manifesto while you are there.
MR SPEAKER: Mr Coe, really!
MS GALLAGHER: The charges in the schedules are based on market value. In fact, the three-year averaging will have smoothed the effect of increasing land values in the most recent year. The schedules have been developed by the Australian Valuation Office. They have been reviewed by an independently chaired panel. The panel had experts from AVO and the Australian Property Institute, the body accrediting professional valuers. This process will be repeated every year.
The government has recognised that the industry needs time to transition to market land values, as envisaged under the current legislation. The government has provided generous remissions for the transition period. The subsidy to industry, based on past activity, is estimated at around $45 million over four years, compared to implementing the charge at the 100 per cent rate. Last week, I also announced—
Mr Smyth: It is not a subsidy.
MS GALLAGHER: That was just for you, Mr Smyth. Last week I also announced that the government had decided to implement the schedules contained in the Macroeconomics-Nicholls report when codification commences on 1 July 2001. These figures were released in November 2010 and have provided industry with sufficient time to consider these values and make decisions regarding future
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