Page 3874 - Week 10 - Thursday, 20 September 2018
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Investors told the committee that it was no longer viable to own or acquire unit titled properties in the ACT. As a result, some contributors told the committee that they were actively considering getting out of the ACT property market in favour of property markets in other jurisdictions.
A consistent message that came through from contributors was the sense that the ACTÂ government had not kept faith with property owners. People had bought property on one set of assumptions and in 2017 had been abruptly confronted by quite another scenario. There was a sense that consultation and communication by the government had broken down before, during and after the changes were put into effect.
In addition, a number of contributors felt that they were seeing no reciprocity in exchange. There was a perception that although property taxes in the shape of rates had increased, local services were minimal and had not improved. They also noted that in many cases unit titled complexes paid privately for services that would, for freestanding properties, be provided by government—for example, roadworks, internal roadworks and the collection of garbage.
Madam Speaker, these messages were consistent across the contributors to the inquiry. The high quality of contributions was striking. A number showed impressive levels of expertise in economic policy.
Turning to the six recommendations made by the committee in this report, I will start with what is considered the most important, which is recommendation 2. It states:
The Committee recommends that the ACT government devise a new method for determining rates and land tax for unit title properties.
Effectively, what the committee has said is that the government has got the system wrong and it needs to go back to the drawing board. The present system really is not working. It started in 2012 as tax reform, with progressive scales for rates and land taxes, and then in 2017 effectively denied access to the progressive scales for all unit titled properties.
Recommendation 5 responds to this, recommending that the system be changed to restore access for unit titled properties to a progressive scale for rates and land tax. In the process, some dramatic anomalies have emerged which to all appearances are simply unfair. This damages the relationship between government and its constituency and must be changed.
However, the committee also acknowledges that the value of land attributable to freestanding houses and unit titled properties presents a problem for working out rates and land taxes, and recommendation 4 acknowledges and responds to this problem.
Recommendations 1 and 3 respond to the fact that, despite the expertise and awareness displayed by contributors, a number did not understand important elements of the rates and land tax system. These recommendations seek to provide clarification of these elements.
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