Page 4419 - Week 10 - Thursday, 22 September 2011

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Taxation—property rates
(Question No 1700)

Mr Seselja asked the Treasurer, upon notice, on 16 August 2011:

(1) In relation to property rates, is the Wage Price Index (WPI) applied in whole to the fixed charge and then again in whole to the Average Unimproved Value; if not, how is the WPI applied to the two components.

(2) Does the 2011-12 Budget Paper Three state that general rates will increase in 2011-12 from 2010-11 levels by 3.38 percent, consistent with WPI; if so, why does the fixed charge of (a) residential properties increase by 4.3 percent from the figure quoted in the 2009-10 Budget Papers, (b) rural properties increase by 8.6 percent from the figure quoted in the 2009-10 Budget Papers and (c) commercial properties increase by 9.7 percent from the figure quoted in the 2009-10 Budget Paper.

(3) What is the number of (a) residential, (b) rural and (c) commercial properties assumed to estimate the revenue collected from general rates and can the Treasurer provide these figures for (i) 2010-11, (ii) 2011-12, (iii) 2012-13, (iv) 2013-14 and (e) 2014-15.

(4) Over the forward estimates has the fixed component of general rates been indexed to the WPI forecast in Budget Paper Three on pages 6 and 246; if not, how has the fixed component been indexed.

(5) What is the assumed fixed component of rates for the years 2012-13 to 2014-15 for (a) residential, (b) rural and (c) commercial properties.

Mr Barr: The answer to the member’s question is as follows:

(1) For budget estimate purposes, the annual movement in the Wage Price Index (WPI), as at the most recent December quarter, is applied to the total full year equivalent rates revenue estimate from existing properties for each sector (residential, rural and commercial). The increase is then distributed equally between fixed charge and valuation based charge.

(2) The 2011-12 Budget Paper Three (page 51) states that general rates revenue from existing properties will increase from 2010-11 levels by the WPI of 3.68 per cent. The fixed charge is less than 50 per cent of the total rates revenue. Equal distribution of WPI increase can lead to disproportionate increase in percentage terms for the different sectors.

(3)

Beyond the budget year, revenue estimates are not based on specific predictions of stock in the individual sub sector, but incorporate an overall growth in stock.

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