Page 3624 - Week 12 - Tuesday, 22 October 2013
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Housing affordability is a real issue. For a first homebuyer saving to get a house deposit together, it is made more difficult in many cases because of the high rents they pay. So while they are in rental accommodation it is very difficult to try to save money because of the high rents. In fact, since Labor has come to power in Canberra, rents have increased by more than 77 per cent.
Let us have a look at what Labor and the Greens have done to make this situation worse: pushing up unit prices, pushing up house prices, pushing up rates and, as a consequence, pushing up rent. The tax reforms that have been pushed by Mr Barr with the support of the Greens will triple the rates of Canberrans. Stamp duty is set to increase to 7.25 per cent for some homebuyers, despite claims that it will be abolished. There will be increased stamp duty for more than 50 per cent of first homebuyers through narrowing the eligibility for concessional rates and increasing payments on the least expensive houses from a nominal $20 to over $10,000.
ACT fees and services will cost an average household over $9,000 a year. The tax on units, the lease variation charge, can add up to $50,000 onto the price of every unit in an apartment development, which will inevitably be passed on to buyers. First home owners are now facing a situation where 50 per cent of the first homebuyers’ charges in stamp duty are increased because concessions have been removed.
Let me go through in some detail how the Labor-Greens government is trashing housing affordability in Canberra. I will go to the lease variation charge. It is a tax on units and it increases the price of units. I make the point that for many first home owners, the entry point to housing ownership is through a unit. The remission rate in 2013-14 has dropped to 55 per cent, and the tax is failing to collect what it is supposed to. This is a bizarre tax in that it is not even collecting what it was meant to. This is really a tax on business and a tax on development. It is actually stifling development and having a reverse effect.
The 2012-13 budget estimated that $23.4 million was going to be collected. However, as at the release of the June quarter, only $15.5 million had been collected. The question is: how much economic activity has been slowed to drag in that $15.5 million and how much would that economic activity be worth? It would be exponentially higher than that $15.5 million. Subsequently, the estimated revenue across the forward estimates has been revised down.
I will refer to various suburbs and look at the change of use charge for units in a block of five to 10 units. In Braddon, a unit is going to see a charge in 2013-14 of $31,500; Turner, $31,500; and Phillip, $24,000. For dual occupancies in the financial year 2013-14: Kambah, a $20,000 slug; Mawson, a $31,000 hit; and Aranda, a $27,000 hit. Two things will happen out of that. Either a developer will say, “Right, well, the margins aren’t going to be there. There’s too much risk, and I’m going to do my development elsewhere,” as many of them are doing—Mr Barr knows many of them are simply going to Queanbeyan or elsewhere in New South Wales, some as far as Victoria, to do their developments because it is just too costly to do them in Canberra because of the LVC—or they will do their developments and the LVC will be passed
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