Page 1716 - Week 05 - Wednesday, 15 May 2019
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you are talking about a huge amount of money that buyers will need to gather before they can purchase a property.
Then we have the concoction which is purely of this government’s creation—the cost of land in the ACT. They have artificially constrained the supply of land in the territory such that it has driven up the cost of land to $1,000 a square metre. How can it be that a 400-square metre block of land in Canberra 15 kilometres away from the city centre and adjacent to the bush, is $400,000? How can it be that 400 square metres costs $400,000?
To optimise that land you then have to spend at least $400,000 to get a block that will live up to a bank valuation. All sorts of problems with the property sector in Canberra have been influenced by or are the sole creation of this ACT Labor government. That is before you even get into the planning system—the planning system that puts unreasonable delays, unreasonable complexity and unreasonable issues with building quality into the mix.
When all these issues are combined—the rates, the land taxes, the revenue office valuations, bank valuations, bank lending criteria, the cost of land and the planning system—it is no wonder we are in a situation in the ACT where investing in property, buying your first home or renting a house has become so unachievable and so out of reach for so many people.
We have competitive federalism in the ACT; we have competitive federalism in Australia. Fifteen minutes way we have another jurisdiction; we have New South Wales, and they do not have all these issues. They have a much better planning system. They have cheaper land. They do not have the rates and land taxes we have. In fact, many, many properties in New South Wales—perhaps even most—do not have any land tax because of the very high threshold before land tax is payable.
Here in the ACT, land tax is payable on the first and cheapest property and, of course, all subsequent ones as well. When you have that mix in the ACT it is no wonder that there are growing doubts about the property sector in the ACT. That is a shame, because it is a good sector. It has been one of our strongest sectors for a long time. But Andrew Barr wants to take advantage of that—he wants to squeeze it. Of course, home owners and renters are paying the price.
The real risk is what happens on Saturday. What happens if Bill Shorten is elected? What happens if negative gearing is added to the mix here? What happens if there is a further disincentive to providing rental properties in the ACT? We will see a reduction in the supply of rental properties and rents will increase. It is pretty simply economics. It is a real risk to the ACT. This is a pretty potent cocktail of challenges facing the property sector that are almost all of Labor’s creation.
We in the ACT will continue to do all we can to make sure we get some balance and common sense back in all these issues I have raised. But it is up to the country and to territorians to make sure we do not have Bill Shorten in the Lodge come Monday morning, because that is a very real risk to all property owners and renters in the ACT.
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