Page 3684 - Week 10 - Wednesday, 13 September 2017
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In this context, it is important that Canberrans contribute equitably to our city’s overall revenue base, and that is why the switch from stamp duty to a broad-base land tax levied through general rates is a good example of that equitable collection of taxation. When stamp duty is a dominant source of government revenue it means, in effect, that our hospitals and schools are funded only by those who move house in any given year. Moving to a broad-base land tax means that services that are used by all of us are funded by all of us.
Similarly, when we announced in the 2016 budget, before the last election, that we would be revising the methodology used to calculate rates upon units, this was also an equity measure. Under the previous methodology someone with a unit worth half a million dollars in the city was paying $400 a year less in rates than someone with a freestanding home worth the same amount in a suburb like Charnwood. There were instances where very valuable apartments in suburbs like Kingston had much cheaper rates bills than much more modest homes in areas like Tuggeranong, and that is not fair and it is not equitable.
General rates calculations for multi-unit dwellings are now based on the total average unimproved value of the block a complex sits on rather than the average unimproved value of each individual unit. This change is being phased in over two years. As a result, general rates for units are increasing at a higher rate than for freestanding properties during the two-year period that the change takes effect. We appreciate that for some property owners this change in methodology has resulted in a change, and a noticeable change, in their rates liabilities. That is why the government has provided a $100 rebate this year to assist with the transition.
It should be acknowledged, however, that, even after this change is fully implemented, over 90 per cent of unit holders pay rates as if they were in the two lowest marginal rating categories. And, overall, across the city, average rates on units are currently $1,352 per year compared with $2,295 a year on average for freestanding homes.
The government is very conscious that rates make up a relatively higher share of income for Canberra pensioners and others on low or fixed incomes. And that is why we offer a wide range of concessions and deferral options to help people manage these costs. For pensioners a rebate of up to $700 a year is available on their rates, and this concession has knocked collectively $31 million off rates bills for older Canberrans in the past three years alone. There are, of course, payment plans and deferral arrangements that are available for those who are not on a pension.
But, in this context, I would like to reiterate a point I made during the budget estimates hearings earlier this year: being asset rich but income poor is undeniably a challenge and is something that particularly affects older Canberrans, and the government is very conscious of the need to have appropriate concessions and programs in place to support people who are in this situation. But I also made the point that there are many Canberrans who are both income and asset poor, that is, they do not even own a house and do not pay any rates at all. And we are not going to scale back or cut services and programs and supports like public housing and the many other programs that we provide for those most vulnerable Canberrans. We are not
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