Page 232 - Week 01 - Wednesday, 15 February 2012
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It is difficult to envisage any reasonable basis on which the motion could be opposed. The charge is economically sound and fair; its administration is efficient; it will be applied toward investment in infrastructure that supports important public policy objectives. But it perhaps comes as no surprise that the mini-Abbott who currently occupies the position of Leader of the Opposition would choose to oppose it.
Ms Porter referred to the ACIL Tasman report on the 2010-11 budget in her speech. It is worth quoting it a little more extensively just to make the point more fully so that the economic illiterates on the other side of the chamber can get a better sense of the economic reality. ACIL Tasman said:
The CUC—
change of use charge—
has a very strong basis in economic theory. Economic rent is defined as an excess distribution to any factor in a production process above the amount required to draw the factor into the process or to sustain the current use of the factor. True economic rent can be collected by governments for the purpose of public finance without the adverse effect caused by taxes on production or consumption.
In this circumstance, the economic rent is the uplift in value through no effort of the leaseholder but, rather, simply through a change in legal status. ACIL Tasman went on to say:
The CUC appears to be an attempt to isolate and tax economic rents. To the extent that it is successful in isolating and then taxing those rents, it should have no impact on production and consumption decisions.
This is, I think, very sound advice and goes entirely contrary to the populist nonsense of the Leader of the Opposition. We will examine whether his claims have been borne out in fact. We will have that opportunity, Mr Speaker. The ACIL Tasman report goes on to say:
... from the standpoint of trying to isolate and then subsequently trying to tax the economic rents, its rationale is on the strongest economic policy grounds.
Those who do not agree with this statement have no understanding of basic economics.
Let me be clear: the government remains committed to the developers charge and to ensuring that the benefits of the additional development rights are returned to where they should be returned, the Canberra community—and then reinvested for the community’s benefit.
Ms Porter reminds us that the government has put in place a very generous remissions program to allow industry to transition. We did this when we introduced codification on 1 July last year. These transition arrangements provide for an automatic remission of 75 per cent in the 2011-12 fiscal year, decreasing by 10 per cent in each of the next
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