Page 1328 - Week 04 - Thursday, 4 April 2019
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ACT—that the government needs as a matter of urgency to establish a task force to review the commercial rating system in the ACT to improve transparency and certainty for property owners, and having overall regard to the economic impact of the rating system, and that this task force needs to be wide-ranging in its membership and liaise with the community about making sure that the commercial rating system is finally in the best interests of the whole ACT community.
I have touched on some other issues. There are a number of recommendations in relation to transparency. For instance, recommendations 1 through 4 in particular ask that there is more information published in relation to ratings both in the budget papers and on the ACT government website, possibly in the revenue office, possibly in the valuation office, which should become an independent statutory body.
There are a number of recommendations that ask for the government to be more transparent in its accountability, one in particular which asks for the government to do a reconciliation of revenues forgone and revenues raised since tax reform was implemented in 2012-13, because the experience amongst those people who contributed to the committee was that there was no sense of how much money had been actually raised under this. The government has made at various stages the commitment that the tax reform system will be revenue neutral, and at one stage it even went so far as to say that it would be cost neutral for individual businesses. That is in budget paper 3 of 2012-13. It clearly has not been the case that it is revenue neutral for individual businesses.
One of the things which I found most alarming was the impact that the changes in commercial ratings were having on property values. It was described as a perfect storm on at least one occasion during the hearings. It is the case that property values are declining when people try to sell their businesses, but at the same time the valuation office is increasing the notional valuation of their properties. This is having a huge impact on businesses owners and property owners.
The thing that is unique about the ACT property market is that there are not big institutional property investors in the ACT. Most of the property investors in the ACT are people who own possibly only one commercial property, maybe two or three or maybe a set of commercial units side by side. But, for the most part, they are small investors who have bought this to run their business out of, with the view of keeping it as part of providing an income stream in their retirement. The ratio of income to apparent property values appears to be falling in the ACT in a way that threatens people’s superannuation investment.
I draw all these very important matters to the attention of the government. These are very important matters to ensure that, as I said earlier, we do not kill the goose that laid the golden egg. Business is very important for the economic future of the ACT and if we are in the process of constantly devaluing business we will drive people out of business. We will drive people over the border, which is probably almost worse than driving people out of business because we will get no benefits from their business but the New South Wales government will.
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