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ACT Ratepayers Bill Shock (Ratepayers Assn. Media Release)

By Canfan - 15 July 2014 62

One third of ACT ratepayers will receive their rates bills in the mail today and tomorrow, many will suffer bill shock with this year’s increases averaging 10% with the total increases of the past 3 years averaging 33%. Some ratepayers paying as much as 65% more since the general new rates system was introduced just over 2 years ago.

Similar increases are forecast to apply every year for the next 17 years under the Governments radical plan to replace stamp duties with higher rates.

Ratepayers will eventually have to pay on average three times more in real terms and 6 times more in actual dollar terms.

These increases are exactly in line with the Ratepayers’ Association original projections of 2012 which were ridiculed by the ACT Labor Government & the Greens. Openness & transparency in Government is advocated in the policies of both the ACT Labor Government and the ACT Greens. However, this has not been practised, especially when it comes to general rates. ACT Ratepayers will continue to suffer bill shock every year.

The new rates system means that stamp duties will eventually be replaced by massive increases in general rates. Those who have already paid stamp duty will effectively pay twice and more, ratepayers will eventually have to pay three times more in real terms and 6 times more in actual terms on average than they would have under the previous rates system.

The ACT Government including the ACT Greens should come clean & table their rates increases projections, openness & transparency should be more than just words”, Christopher Dorman said.

(Media Release Ratepayers Association ACT)

What’s Your opinion?


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62 Responses to
ACT Ratepayers Bill Shock (Ratepayers Assn. Media Release)
1
DeadlySchnauzer 11:22 am
15 Jul 14
#

Getting rid of Stamp Duty and replacing it with rate increases is an excellent move by the ACT government and they should be applauded for their forward thinking. You will not find a single economist or sociologist who thinks that Stamp Duty is a good idea. But you know… let’s all have a whinge about having to pay more.

Let’s see what Sir Henry has to say:

http://taxreview.treasury.gov.au/content/finalreport.aspx?doc=html/publications/papers/final_report_part_1/chapter_6.htm

“Conveyance stamp duty is highly inefficient and inequitable. It discourages transactions of commercial and residential property and, through this, its allocation to its most valuable use. Conveyance stamp duty can also discourage people from changing their place of residence as their personal circumstances change or discourage people from making lifestyle changes that involve a change in residence. It is also inequitable, as people who need to move more frequently bear more tax, irrespective of their income or wealth.”

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2
davo101 12:03 pm
15 Jul 14
#

Ratepayers will eventually have to pay on average three times more in real terms and 6 times more in actual dollar terms.

Err, maths is obviously not your strongest suit. If we accept that “real terms” means relative to wages then on average ratepayers will have to pay exactly what they do now. The swap over is revenue neutral so by definition the average will not go up relative to the indexation that they use (the WPI). Some people will pay more and some people will pay less (depending on how often they buy a property or how the relationship between land value and rates changes) but overall these will cancel each other out.

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3
dungfungus 1:33 pm
15 Jul 14
#

Gee, rates are going to triple?
Shame the Canberra Liberals didn’t get onto that at the time of the 2012 election as it sounds like an election winner.

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4
breda 2:10 pm
15 Jul 14
#

My rates went up $300 last year, and will rise about that much again this year. All I get for them is garbage collection and street sweeping, and since I live alone I only put the bins out every 2 or 3 weeks. I have discussed this with family members in NSW who live in comparable properties, and their rates are half of what mine are right now, let alone what mine will be in a few years time.

I paid stamp duty when I bought my property.

It’s a rip-off of major proportions. Adding in soaring energy costs, I have calculated that I have to sell my house, because like many people, I am on a fixed income which does not get indexed at anything like these percentage increases. I am going backwards financially every year, and for medical reasons I can’t do anything about it in terms of earning income.

My next home purchase will not be in the ACT. Knowing that this incompetent government is signing up for hundreds of millions of dollars of debt to pay for its vanity project (light rail) tells me that things are only going to get worse for beleaguered ratepayers.

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5
justsomeaussie 2:53 pm
15 Jul 14
#

Another reason to move over the border. Looks like its a good time to invest in Queanbeyan, Jerrabomerra and Googong.

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6
watto23 3:29 pm
15 Jul 14
#

Sorry, if you are complaining about rip offs, you do realise the government would have to get money by some other means, like increased car rego, increased car parking, increased rates anyway! I’ve paid stamp duty also, but applaud a government willing to look past their term of government for once. Yes on a personal level it isn’t great, yes some people are vulnerable to this change but in the long term, this is an excellent policy and finally a government doing whats best for everyone instead of pandering to a minority of whingers. The shambles the current and previous federal government are in because they do all these short term fixes, that give money to people to buy votes rather than doing what is needed.

I’m sorry the economists and scientists in Australia get ignored far too often by government. Stamp duty is like working for a commission. Some weeks you’ll get a lot and other weeks you’ll get little. Its not popular with workers, so I can understand why a government wants to get rid of it as well and replace it with a steady income stream.

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7
breda 3:53 pm
15 Jul 14
#

If the government increases car rego, at least it is tied to something that people actually use. Increasing rates is just a lazy way of making housing less affordable, irrespective of what people use or what they can afford to pay. It’s an inequitable tax which bears no relation to anything except the government’s insatiable need to extract more money from the populace.

Of course, if you can get into government housing, you don’t have to worry about any of this, because ratepayers are subsidising all those costs. So, not only does this policy punish those who pay their own way, it increases the incentives to get on the waiting list for even more subsidies.

This is the “vision” that currently informs the ACT government’s fiscal policy.

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8
DeadlySchnauzer 4:07 pm
15 Jul 14
#

The common whinge about this seems to be “I moved recently and paid stamp duty and now I also have to pay higher rates”. Well guess what… unless you are never going to move house again, you will benefit from this change the *next* time you move. And the time after that.

In fact statistically (http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features30Dec+2010) you are likely to benefit from this change a number of times over your remaining life time.

But yeah. Boo government and all that.

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9
DeadlySchnauzer 4:19 pm
15 Jul 14
#

breda said :

It’s an inequitable tax which bears no relation to anything except the government’s insatiable need to extract more money from the populace.

See my opening post, and I suggest you read up on what “equitable” means. Rates based on land value are far more equitable than most government revenue sources, especially when they use a progressive scale relative to land value (precisely how the ACT system works). To put it bluntly, people with higher incomes who can afford to live in more expensive residences on larger/inner blocks pay much higher rates.

Interestingly enough your example of car rego is one of the *least* equitable forms of government revenue. It doesn’t matter how much you earn or can afford, everyone has to pay the same rego rate.

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10
dungfungus 4:25 pm
15 Jul 14
#

watto23 said :

Sorry, if you are complaining about rip offs, you do realise the government would have to get money by some other means, like increased car rego, increased car parking, increased rates anyway! I’ve paid stamp duty also, but applaud a government willing to look past their term of government for once. Yes on a personal level it isn’t great, yes some people are vulnerable to this change but in the long term, this is an excellent policy and finally a government doing whats best for everyone instead of pandering to a minority of whingers. The shambles the current and previous federal government are in because they do all these short term fixes, that give money to people to buy votes rather than doing what is needed.

I’m sorry the economists and scientists in Australia get ignored far too often by government. Stamp duty is like working for a commission. Some weeks you’ll get a lot and other weeks you’ll get little. Its not popular with workers, so I can understand why a government wants to get rid of it as well and replace it with a steady income stream.

You appear to be the only apologist for the ACT Labor Minority Government on this issue.
Remember that the flaw in this new revenue system is that UCV valuations can be challenged and if enough people are compelled to do just that then the law/regulation is wrong.
Also, what happens if property values crash in the ACT? The rates pitched against valuations will fall commensurately and leave the Barr-blitz in tatters. It won’t be such and “excellent policy” then.

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11
rosscoact 4:50 pm
15 Jul 14
#

DeadlySchnauzer said :

Getting rid of Stamp Duty and replacing it with rate increases is an excellent move by the ACT government and they should be applauded for their forward thinking. You will not find a single economist or sociologist who thinks that Stamp Duty is a good idea. But you know… let’s all have a whinge about having to pay more.

Let’s see what Sir Henry has to say:

http://taxreview.treasury.gov.au/content/finalreport.aspx?doc=html/publications/papers/final_report_part_1/chapter_6.htm

“Conveyance stamp duty is highly inefficient and inequitable. It discourages transactions of commercial and residential property and, through this, its allocation to its most valuable use. Conveyance stamp duty can also discourage people from changing their place of residence as their personal circumstances change or discourage people from making lifestyle changes that involve a change in residence. It is also inequitable, as people who need to move more frequently bear more tax, irrespective of their income or wealth.”

Spot on and of course the government went to the last election with this as a policy and the people of the ACT thought that it was a good idea then and the nonsense spouted by the opposition was simply that, nonsense.

I’m wondering of the Libs will go to the next election with the policy of reducing the cost of rates and increasing the cost of stamp duty? They might of course say that to get elected, then do the opposite, but I guess that’s ok for the gullible half of the population.

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12
breda 5:13 pm
15 Jul 14
#

Ah, the politics of envy strike again.

When I bought my house, the UCV was low, because it was considered to be a less desirable suburb, and I didn’t have much money.

Due to things beyond my control, that has changed. Therefore, according to you, I am now rich, and should be punished.

Well, although I am within 100m of a shopping centre, the ACT government has deemed that my block is 30 sqm too small to put a couple of townhouses on – which would not only make sense in planning terms, but would also prevent me from being effectively evicted from my home.

I love this “kick people out for a Higher Purpose” stuff that is equally applied to villagers when a new dam is built in China and to low-income people who bought relatively cheap housing years ago because they were not well off, in Canberra.

Here’s a hint – people who bought cheap houses because they were poor years ago and are still living there are not likely to be bathing in champagne these days. And even if they are, so what?

Perversely, only the rich can afford to stay under these stupid policies. But it’s the vibe, right?

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13
davo101 5:16 pm
15 Jul 14
#

dungfungus said :

Remember that the flaw in this new revenue system is that UCV valuations can be challenged and if enough people are compelled to do just that then the law/regulation is wrong.
Also, what happens if property values crash in the ACT? The rates pitched against valuations will fall commensurately and leave the Barr-blitz in tatters. It won’t be such and “excellent policy” then.

I’m not sure you really understand how the rates system works. It doesn’t matter what the UCV’s are in absolute terms only how yours compares to everyone else’s. If the UCV’s all dropped to one tenth of what they are now the government would just increase the rating factors tenfold and the amount collected would be identical. They know what the UCV’s are and set the rating factors as required to collect the rates they want, it’s not as if they are taking a punt on which way they are going to go.

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14
justin heywood 6:05 pm
15 Jul 14
#

rosscoact said :

…They (the Libs) might of course say that to get elected, then do the opposite, but I guess that’s ok for the gullible half of the population.

OK, so everyone who didn’t vote Labor is considered the ‘gullible half’. Presumably then, the smart ones only vote for your team. Good to know you’re putting some rational thought into your views.

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15
HiddenDragon 6:12 pm
15 Jul 14
#

In all the threads which the RiotAct has had on this subject, one of the pithiest comments I have seen was along the lines of Labor/Green = double your rates plus stamp duty ; Liberal = double your rates plus stamp duty.

I think that sums it up very neatly – even the rusted-on, tribal Labor/Green polity of the ACT will not stand for the level of annual rates which would be sufficient to completely do away with stamp duty (particularly with income growth in the future likely to be somewhat lower than in recent years). Likewise, the expectations of Canberra Liberal supporters about the range and quality of government services and handouts means that it would not be politically viable for the ACT Liberals to promise to cut ACT government spending sufficiently to avoid significant rate rises (even with the retention of stamp duty).

Beyond that, I will just add that while the critics of this policy are typically arguing based on their own circumstances, so too are supporters – if and when the circumstances of the latter change, they may gain surprising new insights about what’s fair, equitable and efficient (which would be poetic).

Finally, anyone who thinks that this will do wonders for the ACT economy is kidding themselves – all it does is entrench Canberra as a high cost enclave for central government, a few tertiary institutions, and some niche/boutique knowledge economy businesses.

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