Page 2501 - Week 06 - Thursday, 23 June 2011
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Ms Hunter made this extraordinary argument about V1 and V2 that yes, there will be a windfall if you support the Liberals’ amendments but also the V1 and V2 will both go up and therefore it will distort it and it will not be a windfall. It was an extraordinary argument and I can understand fully why they are looking to just arguing it in the broad rather than in the particular.
Likewise, Katy Gallagher made the argument that we have been working for some time, that there will be a number of impacts of this tax. And one of the arguments she made in her speech—she did not quite realise she was making it—was that it will affect some people’s property values negatively. She said the reason we need to do this is that some people are selling their properties for too much. If that is true and then you are now fixing that with this legislation, then presumably those people will be getting less for their properties. Presumably those properties will now be worth less in some areas.
Ms Gallagher has recognised one of the key arguments against the tax and acknowledged it. In fact, she acknowledged it as a key reason for having the legislation in the first place. Of course, that means less redevelopment in those areas which apparently are the areas where the government have said they would like to see more rebuilding. So she has acknowledged another aspect.
I think it has been left to Mr Barr in a roundabout sort of way to acknowledge the other element, and that is that taxes have implications, that markets adjust, as he says. How will those markets adjust? We will see a little in terms of some existing property values. We might see a little in terms of margins. We will see higher costs to buyers and renters. That is how the market is likely to adjust.
What does that mean? It means that they will pay more. And the only way that they will not pay more is if all of it is borne by existing homeowners or the developer. And if Mr Barr’s argument is that the developer is going to wear it all, then again it would be an argument for going much higher. If the developer was able to absorb it all, then you could just up the tax. So we have had all three of the arguments, the three key arguments, validated.
The other one that has come about in terms of the process, which is that the legislation will provide less certainty, has been affirmed by these very amendments. By these very amendments, they have affirmed that this will provide less certainty and that this is a dud piece of legislation. They have had years to work on it and, hours before it goes through, they have to add another half again to the size of this bill. It was so robust, it was done so well and was so defensible, that apparently even the Greens were able to pick holes in it. The Greens were able to pick holes in it, with 16 amendments.
So the last part of our argument, that it will provide less certainty, that the legislation will be unworkable, is clear. All it will mean is that it is going to be harder for the ordinary part of the industry, particularly the small or medium end of the industry who do not often have the ear of government, to make the case. It is going to be harder for
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