Page 1603 - Week 05 - Tuesday, 8 May 2018
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For example, in the case of a development requiring a lease variation from a commercial building to a residential building, units can be sold, generating revenue to fund the project, including the lease variation charge. In effect, this bill will mean that developers can begin investment in demolition and construction works and securing jobs as soon as a project is ready to go and pay their lease variation charge when they complete it. The bill also simplifies the administration process of the lease variation charge, which will help all those involved.
The government has been very clear that we support the principle of the lease variation charge, that the community should share in the windfall gains associated with rezoning and redevelopment. I know that view is not shared by the Liberals opposite who take a no-tax, let-the-market-rip approach to development and whose party continues to pocket the donations of developers when Labor banned them long ago. But it is equitable to demand a fair contribution from developers, especially given that the additional residents result in further demand on government services and resources.
The principle of a community return from the lease variation charge remains clear, but there are always ways that we can make it easier to pay the contribution to the community and maximise the economic outcomes. That is what this bill aims to achieve. In order to ensure that the Canberra community is not subsidising developers who choose to defer the LVC, the government will also charge a small interest rate on deferred amounts.
I am confident that this bill will be welcomed by my constituents in the Woden Valley area who want to see more investment and urban regeneration take place in Woden town centre. It achieves the right outcome for the government and the ACT community while also encouraging economic activity and redevelopment across the territory. I am very pleased that we have been able to deliver this as an outcome from the Woden round table. I thank the Chief Minister and commend the bill to the Assembly.
MS LE COUTEUR (Murrumbidgee) (4.30): I will speak fairly briefly on this bill. The Greens will be supporting it. It has a worthy objective. Developers do take on a large amount of financial risk because they have very large costs that are incurred months before they get their revenue—usually, in fact, years before. Up-front costs include the purchase of land, preparation costs like getting plans drawn up, DA fees, soil testing and, on more complex sites, things like decontamination, asbestos removal, utility relocation and, of course, the construction costs. But there is little revenue until construction is done.
While deposits may be taken for pre-sales, these are usually very small relative to costs. It is common for over 90 per cent of the revenue to come in after the development is finished. One of the costs that developers have in many cases, but not all, is the ACT government’s lease variation charge. Currently, this gets paid early in the development process around the time of the DA approval. This bill would allow the payment to be deferred until later in the development process with protections for
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