Page 2657 - Week 08 - Thursday, 14 August 2014
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MR SMYTH (Brindabella) (8.26): This is another revenue initiative of the ACT government that, again, I do not believe has been well thought out. It is quite interesting that the number $10 million seems to appear in a number of these initiatives as though we have come up with a number and that is what we are doing.
According to the explanatory statement and from information we gathered during the estimates process it is estimated that although 55 per cent of properties subjected to residential land tax were units or townhouses in 2013-14, these classes of properties contributed only 22 per cent of the land tax collected during that financial year. This contrasts with your standard residential property, one building on one block, one dwelling or one home on one block, which made up 44 per cent of properties but contributed 78 per cent of land tax revenues.
When we asked the Treasurer he said, “Yes, this will bring it up to parity.” We initially thought that perhaps they were going to drop the rates on the single dwelling but no, this is just a tax grab. What they are doing instead of rebalancing it is taking a $10 million cut on the way and what you have is for almost all properties an increase in the charges that they will pay.
In effect these charges will bring units up to the same level as residential. Even though they do not have the land and have a different sort of amenity to the standard residential block, they will now pay the same. Units will pay more, and up to triple what they paid last year. Some residentials will pay less, but very few.
Let us remember that this is not a revenue-neutral initiative. The government hopes to raise $40 million over the next four financial years, some $10 million a year. But according to briefings from the government, these changes will disadvantage investors with one property when compared to the New South Wales regime. It only starts looking better than New South Wales when you have three properties or more. I am not sure how many owners there are with three properties or more in the ACT but I am not sure that is a large number. Again, this is a tax grab.
You have to ask: what are the implications? One of the implications is that, of course, this will be passed on and it will be passed on to those that rent. Often those who rent are already at a significant disadvantage in our community and if they pick up approximately another $20 a week it will hurt their income. The Treasurer said, “People can claim it back off the federal government.” But, of course, that will only come at the end of each period of the reporting.
The problem here is that again what you have is another grab for cash by a government that have had revenue increase after revenue increase and still have not been able to balance their books. What you have got is a government that have not done the work that is required to diversify the economy so that they will have more businesses to tax—and hopefully tax at a lower level but still make more revenue. But we know from earlier this evening from the Payroll Tax Amendment Bill they do not do that sort of work.
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